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Beyond the veil of ignorance: The influence of direct democracy on the shadow economy
TLDR
In this article, the influence of direct democratic institutions on the size and development of the shadow economy was analyzed and a negative relationship between the degree of direct democracy and the size of shadow economies was developed.Abstract:
In this paper we analyze the influence of direct democratic institutions on the size and development of the shadow economies. The framework developed predicts a negative relationship between the degree of direct democracy and the size of the shadow economy. Countries where direct democratic institutions support democratic life are expected to be characterized by a lower informal sector, ceteris paribus. The empirical / econometric investigation of a sample of 56 democracies confirms our core hypothesis and demonstrates that the effect of direct democratic institutions on the shadow economy is negative and quantitatively important; the results are robust and also depend on the interaction of direct democracy with other political institutions, such as district magnitude.read more
Citations
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The Economic Effects of Constitutions
TL;DR: The Economic Effects of Constitutions: Torsten Persson and Guido Tabellini as mentioned in this paper presented the most ambitious study yet that attempts to identify and estimate the effects of constitutional design on economic outcomes.
Book
The shadow economy
TL;DR: The shadow economy constitutes approximately 10% of GDP in the UK; about 14% in Nordic countries and about 20 - 30% in many southern European countries as mentioned in this paper, and the main drivers of the shadow economy are (in order): tax and social security burdens, tax morale, the quality of state institutions and labour market regulation.
Local autonomy, tax morale, and the shadow economy
TL;DR: In this paper, the authors analyzed the relationship between local autonomy and tax morale and found that there is a positive (negative) relationship between autonomy and the size of the shadow economy.
Posted Content
Estimating the Size of the Shadow Economy: Methods, Problems and Open Questions
TL;DR: In this paper, various methods to estimate the size of the shadow economy, their strengths and weaknesses, and the definition and causal factors of shadow economy as well as a comparison of the size using different estimation methods are presented.
References
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Legal Determinants of External Finance
TL;DR: The authors showed that countries with poorer investor protections, measured by both the character of legal rules and the quality of law enforcement, have smaller and narrower capital markets than those with stronger investor protections.
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The Logic of Collective Action: Public Goods and the Theory of Groups.
Sidney C. Sufrin,Mancur Olson +1 more
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Why Do Some Countries Produce so Much More Output Per Worker than Others
TL;DR: This paper showed that differences in physical capital and educational attainment can only partially explain the variation in output per worker, and that a large amount of variation in the level of the Solow residual across countries is driven by differences in institutions and government policies.
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Why do Some Countries Produce So Much More Output Per Worker than Others
Robert E. Hall,Charles I. Jones +1 more
TL;DR: This article showed that the differences in capital accumulation, productivity, and therefore output per worker are driven by differences in institutions and government policies, which are referred to as social infrastructure and called social infrastructure as endogenous, determined historically by location and other factors captured by language.