Corruption and the shadow economy

• 成果类型: Article
• 署名作者: Choi, JP; Thum, M
• 署名单位: Technische Universitat Dresden; Michigan State University
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/j.1468-2354.2005.00347.x
• 发表日期: 2005
• 页码: 817-836
• 关键词: Informal sector; unofficial activity; bribes

摘要

This article develops a simple framework for analyzing the links between corruption and the unofficial economy and their implications for the official economy. In a model of self-selection with heterogeneous entrepreneurs, we show that the entrepreneurs' option to flee to the underground economy constrains a corrupt official's ability to introduce distortions to the economy for private gains. The unofficial economy thus mitigates government-induced distortions and, as a result, leads to enhanced economic activities in the official sector. In this sense, the presence of the unofficial sector acts as a complement to the official economy instead of as a substitute.