This working paper is part of a series of deliverables within the project entitled ‘GREY – Out of... more This working paper is part of a series of deliverables within the project entitled ‘GREY – Out of the shadows: developing capacities and capabilities for tackling undeclared work in Bulgaria, Croatia and FYR Macedonia’ (‘GREY’), funded by the European Commission’s Framework 7 Industry-Academia Partnerships Programme (IAPP). The objective of this project is to provide concrete policy recommendations about what policies may work better in tackling the undeclared economy in two new EU Member States (Bulgaria and Croatia) and a candidate country (FYR Macedonia).
The aim of this Working Paper No. 5 is to provide a preliminary assessment of the appropriateness of possible policy approaches for tackling undeclared work as well as their transferability to three target countries: Bulgaria (BG), Croatia (HR) and FYR Macedonia (FYROM).
Until now, the undeclared economy has been tackled in Balkan
countries by increasing the penaltie... more Until now, the undeclared economy has been tackled in Balkan countries by increasing the penalties and risk of detection so as to deter participation. Recently however, calls have been made for a new more indirect approach that improves tax morale in order to foster a culture of commitment to compliance. The aim of this paper is to evaluate these contrasting policy approaches. Reporting evidence from 1018 face-to-face interviews conducted in Bulgaria during 2013, logistic regression analysis reveals no association between participation in undeclared work and the perceived level of penalties and risk of detection, but a strong association between participation in undeclared work and the level of tax morale. The paper concludes by discussing the theoretical and policy implications of the findings.
This paper proposes a new way of explaining the informal economy
in post-socialist societies. Dra... more This paper proposes a new way of explaining the informal economy in post-socialist societies. Drawing upon evidence from 1,000 face-toface interviews conducted in Croatia during 2013, and using stepwise Tobit regression analysis, the finding is that after controlling for other explanatory variables, participation in the informal economy results from the asymmetry between the norms, values and beliefs of citizens (informal institutions) and the codified laws and regulations (formal institutions). Reducing such institutional asymmetry is thus required if the informal economy is to be tackled. How this can be achieved in post-socialist societies is then discussed.
This working paper is part of a series of deliverables within the project entitled ‘GREY – Out of... more This working paper is part of a series of deliverables within the project entitled ‘GREY – Out of the shadows: developing capacities and capabilities for tackling undeclared work in Bulgaria, Croatia and FYR Macedonia’ (‘GREY’), funded by the European Commission’s Framework 7 Industry-Academia Partnerships Programme (IAPP). The objective of this project is to provide concrete policy recommendations about what policies may work better in tackling the undeclared economy in two new EU Member States (Bulgaria and Croatia) and a candidate country (FYR Macedonia).
The aim of this Working Paper No. 5 is to provide a preliminary assessment of the appropriateness of possible policy approaches for tackling undeclared work as well as their transferability to three target countries: Bulgaria (BG), Croatia (HR) and FYR Macedonia (FYROM).
Until now, the undeclared economy has been tackled in Balkan
countries by increasing the penaltie... more Until now, the undeclared economy has been tackled in Balkan countries by increasing the penalties and risk of detection so as to deter participation. Recently however, calls have been made for a new more indirect approach that improves tax morale in order to foster a culture of commitment to compliance. The aim of this paper is to evaluate these contrasting policy approaches. Reporting evidence from 1018 face-to-face interviews conducted in Bulgaria during 2013, logistic regression analysis reveals no association between participation in undeclared work and the perceived level of penalties and risk of detection, but a strong association between participation in undeclared work and the level of tax morale. The paper concludes by discussing the theoretical and policy implications of the findings.
This paper proposes a new way of explaining the informal economy
in post-socialist societies. Dra... more This paper proposes a new way of explaining the informal economy in post-socialist societies. Drawing upon evidence from 1,000 face-toface interviews conducted in Croatia during 2013, and using stepwise Tobit regression analysis, the finding is that after controlling for other explanatory variables, participation in the informal economy results from the asymmetry between the norms, values and beliefs of citizens (informal institutions) and the codified laws and regulations (formal institutions). Reducing such institutional asymmetry is thus required if the informal economy is to be tackled. How this can be achieved in post-socialist societies is then discussed.
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The aim of this Working Paper No. 5 is to provide a preliminary assessment of the appropriateness of possible policy approaches for tackling undeclared work as well as their transferability to three target countries: Bulgaria (BG), Croatia (HR) and FYR Macedonia (FYROM).
countries by increasing the penalties and risk of detection so as to
deter participation. Recently however, calls have been made for a new
more indirect approach that improves tax morale in order to foster
a culture of commitment to compliance. The aim of this paper is to
evaluate these contrasting policy approaches. Reporting evidence
from 1018 face-to-face interviews conducted in Bulgaria during
2013, logistic regression analysis reveals no association between
participation in undeclared work and the perceived level of penalties
and risk of detection, but a strong association between participation
in undeclared work and the level of tax morale. The paper concludes
by discussing the theoretical and policy implications of the findings.
in post-socialist societies. Drawing upon evidence from 1,000 face-toface
interviews conducted in Croatia during 2013, and using stepwise
Tobit regression analysis, the finding is that after controlling for other
explanatory variables, participation in the informal economy results
from the asymmetry between the norms, values and beliefs of citizens
(informal institutions) and the codified laws and regulations (formal
institutions). Reducing such institutional asymmetry is thus required
if the informal economy is to be tackled. How this can be achieved in
post-socialist societies is then discussed.
The aim of this Working Paper No. 5 is to provide a preliminary assessment of the appropriateness of possible policy approaches for tackling undeclared work as well as their transferability to three target countries: Bulgaria (BG), Croatia (HR) and FYR Macedonia (FYROM).
countries by increasing the penalties and risk of detection so as to
deter participation. Recently however, calls have been made for a new
more indirect approach that improves tax morale in order to foster
a culture of commitment to compliance. The aim of this paper is to
evaluate these contrasting policy approaches. Reporting evidence
from 1018 face-to-face interviews conducted in Bulgaria during
2013, logistic regression analysis reveals no association between
participation in undeclared work and the perceived level of penalties
and risk of detection, but a strong association between participation
in undeclared work and the level of tax morale. The paper concludes
by discussing the theoretical and policy implications of the findings.
in post-socialist societies. Drawing upon evidence from 1,000 face-toface
interviews conducted in Croatia during 2013, and using stepwise
Tobit regression analysis, the finding is that after controlling for other
explanatory variables, participation in the informal economy results
from the asymmetry between the norms, values and beliefs of citizens
(informal institutions) and the codified laws and regulations (formal
institutions). Reducing such institutional asymmetry is thus required
if the informal economy is to be tackled. How this can be achieved in
post-socialist societies is then discussed.