Outsourcing refers to the subcontracting or transfer of activities (production processes or servi... more Outsourcing refers to the subcontracting or transfer of activities (production processes or services) previously performed within the unit under investigation to an external provider. In economic studies, the unit of analysis is normally a business, or sometimes a nation, so outsourcing refers to the subcontracting or transfer of activities previously performed within the business or nation to an external provider. In studies of consumption and consumer culture, in contrast, outsourcing is normally discussed in relation to the household as the unit of analysis, so outsourcing refers to the transfer of activities traditionally performed within the household on a self-servicing basis to external providers. Examples are domestic help, restaurant and take-out meals, daycare for children, and services in the realms of dog walking, personal shopping, lawn maintenance, tax preparation, and even changing the car oil.
In recent decades, there has emerged an assumption that in commercial consumer cultures, domestic... more In recent decades, there has emerged an assumption that in commercial consumer cultures, domestic services have become increasingly commodified. Domestic services refers to household work tasks that allow the social reproduction of members of the household. Routine domestic services range from everyday housework tasks (e.g., housecleaning, laundry, ironing, cooking, and washing up) through household administration and gardening to caring activities (e.g., child care, elder care, and pet care). Nonroutine domestic services, meanwhile, range from house-maintenance tasks (e.g., outdoor painting, plastering, decorating, and mending broken windows and appliances) to home improvement activities (e.g., installing double glazing, insulation, putting in a bathroom suite, building an extension or loft conversion, putting in central heating, and carpentry). Each and every one of these domestic services can be conducted using various sources of labor. For example, it cannot be asserted that cooking is always conducted as unpaid domestic work, and window cleaning by formal employees. Cooking, for instance, can be conducted as unpaid domestic work (e.g., where one cooks for oneself or one's family), unpaid community work (e.g., where one cooks for neighbors or friends on an unpaid basis), paid informal work (e.g., where one cooks in a restaurant on an off-the-books basis for “informal” payments that are not declared to the government for tax, benefit, or labor-law purposes), or formal employment (e.g., where one is a formally employed chef either registered self-employed or paid on a pay-as-you-earn basis). Different domestic services, therefore, do not belong to different types of work. Instead, all domestic services can be undertaken using each and every form of work. Four basic types of work, therefore, can be used to provide domestic services. They are • self-provisioning, which is unpaid work undertaken by household members for themselves and other members of their household; • unpaid community work, which is work provided on an unpaid basis by and for the extended family, social or neighborhood networks, and more formal voluntary and community groups, and ranges from kinship exchange through friendship/neighborly reciprocal exchanges to one-way volunteering for voluntary organizations; • paid informal work, where legal goods and services are exchanged for money, but these exchanges are unregistered by, or hidden from, the state for tax, social security, or labor-law purposes; and • paid formal employment, which is paid work that is declared to the state for tax, social security and labor law purposes.
The informal economy is defined as all work that is not “formal employment,” by which is meant pa... more The informal economy is defined as all work that is not “formal employment,” by which is meant paid work registered with the state for tax, social security, and labor law purposes. This defining of the informal economy in terms of what it is not accurately displays the centrality of formal employment in contemporary society. The consequence is that the informal economy is a residual catchall umbrella category into which all work that is not formal employment is cast. The result is that multifarious forms of work are brought together under this heading of the informal economy. To differentiate the heterogeneous types of work practice grouped together in this leftover, or residual, category, three broad types of informal work are commonly distinguished. First, there is self-provisioning, which is the unpaid household work undertaken by household members for themselves or for other members of their household. Second, there is unpaid community work, which is unpaid work conducted by household members by and for the extended family, social, or neighborhood networks and more formal voluntary and community groups. Third and finally, there is paid informal work, which is monetized exchange unregistered by or hidden from the state for tax, social security, and/or labor law purposes but which is legal in all other respects. The value of this concept to consumer culture and consumption is that it reveals that the production is not confined to the workplace and consumption to the home but is much more complex and nuanced in contemporary consumer culture.
Delocalization is the belief that there is an ongoing process whereby the process of making thing... more Delocalization is the belief that there is an ongoing process whereby the process of making things local is being reversed. For example, it is the view that the goods and services associated with consumption are becoming less local and are increasingly externally sourced. The delocalization process, however, can refer to economic, financial, cultural, or political matters. In recent decades, globalization as a term has perhaps begun to replace the concept of delocalization. However, the scaling up of economic, financial, cultural, or political processes from the local is not always to the global level. Delocalization, therefore, is a wider concept than globalization, and this captures how delocalization might also involve regionalization, at both the intranational and global regional levels. In recent decades, the thesis of delocalization has received widespread support. With the recent and rapid intensification of interregional and international trade and investment (economic delocalization) and the emergence of hypermobile and homeless capital (financial delocalization), a seamless and borderless world is asserted to be coming to fruition in which there is a diminution of the sovereignty of local, regional, and national states and their ability to regulate either national or international capital (political delocalization). The outcome is a loss of local cultures (cultural delocalization) due to the advent of a homogenous global culture founded on “Westernized” or “Americanized” cultural values. However, this rhetoric of economic, financial, political, and cultural delocalization has perhaps run ahead of the lived practice.
This Platform subgroup, held in Bratislava on 26 April 2023, brought together 50 participants fro... more This Platform subgroup, held in Bratislava on 26 April 2023, brought together 50 participants from 21 countries, representing labour, social security and tax authorities, various ministries, and European and national social partners. European Labour Authority (ELA) representatives were also present. The overarching aim has been to evaluate the use of social/labour ID cards as a tool for tackling undeclared work, including in subcontracting chains. The objectives have been to learn from the experiences of countries that have implemented social/labour ID cards about the challenges involved, what works and what does not, and to identify good practices regarding the use of social/labour ID cards for tackling undeclared work. This paper reports the outputs of the Platform subgroup. To do so, this report: Reviews the different characteristics of social/labour ID cards used in Platform members’ countries; Documents the experiences and challenges faced in developing, implementing, and monitoring social/labour ID cards as a tool for tackling undeclared work, identifying what works and what does not; Collects examples of good practice, considering their transferability; Provides suggestions on the possible next steps.
This report is an update of the 2017 European Platform tackling undeclared work report, An evalua... more This report is an update of the 2017 European Platform tackling undeclared work report, An evaluation of the scale of undeclared work in the European Union and its structural determinants: Estimates using the Labour Input Method (Williams et al., 2017), that provided estimates of undeclared work in the private sector for 2013. Employing the same methodology, this study provides estimates on the prevalence of undeclared work in the European Union (EU) in 2019.
The finding is that in 2019, 11.1 % of total labour input in the private sector in the EU is undeclared (11.6 % in 2013), and undeclared work accounts for 14.8 % of gross value added (GVA) in the private sector (16.4 % in 2013). However, these are unweighted averages, not considering the relative size of the labour force in each Member State. The weighted averages are that 9.7 % of total labour input in the private sector in the EU is undeclared (10.2 % in 2013), and undeclared work constitutes 14.6 % of GVA in the private sector (14.9 % in 2013). Therefore, between 2013 and 2019, there has been a decline in undeclared work at the EU level and a decline in 19 of the 26 Member States (estimates could not be produced for Malta in 2013), the exceptions being Bulgaria, France, Germany, Italy, Lithuania, the Netherlands and Romania. This displays the progress made in tackling undeclared work both in the EU as a whole and in most Member States.
This report estimates the prevalence and characteristics of dependent self-employment across EU M... more This report estimates the prevalence and characteristics of dependent self-employment across EU Member States and Norway. To do so, data from 2021 EU Labour Force Survey (EU-LFS), the largest European household sample survey of 2 580 815, of which 160 245 were self-employed, is used. The estimates of the extent of dependent self-employment need to be treated with caution and not as indisputable facts. Caution is required because currently, there is no consensus in theory or in national legislation on how the dependent self-employment, a ‘grey zone’ between genuine self-employment and waged employment, should be defined and measured. Despite the consensus that the dependent self-employed face two types of dependency, namely economic dependency and personal or organisational dependency, there is no universally accepted view on how each type of dependency should be measured, or whether both types of dependency should simultaneously be present to classify a worker as dependent self-employed. Therefore, estimates of the prevalence of dependent self-employment vary across different datasets and studies, depending on the indicators used to measure economic and organisational dependency, and whether both or just one form of dependency is assessed. In addition, legislative frameworks differ in terms of the criteria they use to decide whether a self-employed worker is genuine or dependent self-employed. This means that the estimates in this report do not align with the definitions in national legislation. For these reasons, the estimates provided should be read as the self-employed possessing characteristics of dependent self-employment and thus susceptible to, or at risk of, being dependent self-employed. There are also data limitations in this study. A limited number of questions are available to measure economic and organisational dependency in the EU-LFS. In addition, in some countries, a high number of self-employed refused to respond to these questions on their economic and organisational dependency, weakening the reliability of data and the robustness of cross-national comparisons.
The finding is that 1 in 31 (3.2 %) of all reporting themselves as self-employed without employees display the characteristics of being dependent self-employed. The estimates of the number of dependent self-employed without employees is numerically six times higher than the dependent self-employed with employees, revealing that the risk of dependency is much more prevalent amongst the self-employed without employees.
In the EU in 2020, a digital strategy was adopted and, in 2021, a ten-year 2030 Digital Compass r... more In the EU in 2020, a digital strategy was adopted and, in 2021, a ten-year 2030 Digital Compass roadmap to implement it. This calls for the development of accessible and human-centric digital public services and administration and by 2030, 100 % online provision of key public services for European citizens and businesses.
This report includes the assessment of progress carried out by the European Commission towards these 2030 Digital Compass goals, especially for services in two areas directly relevant for enforcement authorities and preventing undeclared work: 1) conducting regular business operations, and 2) starting a business. It then evaluates good practices in enforcement and other authorities on delivering these accessible and human-centric e-services, that make declared work easier, more beneficial, and acceptable, and therefore help transform undeclared work into declared work.
In many economies, there is a fragmented and uncoordinated approach across the multifarious gover... more In many economies, there is a fragmented and uncoordinated approach across the multifarious government bodies responsible for tackling undeclared work and a limited involvement of social partners, as well as an incomplete range of policy measures used. To resolve this, a holistic integrated strategic approach has been proposed. This is where governments: • Shift the objective from “reducing undeclared work” to “transforming undeclared work into declared work”; • Develop a whole government coordinated approach, and • Implement the full range of direct and indirect policy tools. The aim of this study is to provide a baseline assessment of the progress of enforcement authorities in the Western Balkans towards adopting a holistic approach. To assess this, a questionnaire survey was sent to the tax administrations and labour inspectorates in Albania [AL], Bosnia and Herzegovina [BA], Kosovo* [XK], Montenegro [ME], Republic of North Macedonia [MK] and Serbia [RS]. This report evaluates the self-reported progress made.
This diagnostic report evaluates the extent, nature and drivers of the informal economy in Azerba... more This diagnostic report evaluates the extent, nature and drivers of the informal economy in Azerbaijan followed by recommendations regarding how this sphere can be tackled.
Tackling undeclared work is often less effective because there is a fragmented and uncoordinated ... more Tackling undeclared work is often less effective because there is a fragmented and uncoordinated approach across the multifarious government bodies responsible for tackling undeclared work and a limited involvement of social partners, as well as an incomplete range of policy measures used. To resolve this, a holistic integrated strategic approach has been proposed. This is where governments: Shift the objective from “reducing undeclared work” to “transforming undeclared work into declared work”; Develop a whole government coordinated approach and fully involve social partners, and Implement the full range of direct and indirect policy tools. The aim of this study is to provide a baseline assessment of the progress of enforcement authorities in European countries towards adopting a holistic approach. To assess this, a questionnaire survey was sent to the 32 labour, tax and social security authorities participating in the European Platform tackling undeclared work (hereafter “the Platform”) in the 27 European Union member states plus Norway and Iceland (i.e., 28 labour authorities, 3 tax authorities and 1 social security authority). Responses were received from 23 labour authorities and 1 tax authority. This report evaluates the self-reported progress made.
In transition economies, a significant number of companies reduce their tax and social contributi... more In transition economies, a significant number of companies reduce their tax and social contributions by paying their staff an official salary, described in a registered formal employment agreement, and an extra, undeclared “envelope wage,” via a verbal unwritten agreement. The consequences include a loss of government income and a lack of fair play for lawful companies. For employees, accepting under-reported wages reduces their access to credit and their social protections. Addressing this issue will help increase the quality of working conditions, strengthen trade unions, and reduce unfair competition.
International Journal of Entrepreneurial Behavior & Research
The purpose of this paper is to evaluate which groups of the self-employed engage in the informa... more The purpose of this paper is to evaluate which groups of the self-employed engage in the informal economy. Until now, self-employed people participating in the informal economy have been predominantly viewed as marginalised populations such as those on a lower income and living in deprived regions (i.e. the “marginalisation thesis" ). However, an alternative emergent “reinforcement thesis” conversely views the marginalised self-employed as less likely to do so. Until now, no known studies have evaluated these competing perspectives.
Design/methodology/approach
To do this, the author report a 2013 survey conducted across 28 countries involving 1,969 face-to-face interviews with the self-employed about their participation in the informal economy.
Findings
Using multilevel mixed-effects logistic regression analysis, the finding is that the marginalisation thesis applies when examining characteristics such as the age, marital status, tax morality,occupation and household financial circumstances of the self-employed engaged in the informal economy. However, when gender and regional variations are analysed, the reinforcement thesis is valid.When characteristics such as the urban-rural divide and educational level are analysed, no evidence is found to support either the marginalisation or reinforcement thesis.
Research limitations/implications
The outcome is a call for a more nuanced understanding of the marginalisation thesis that the self-employed participating in the informal economy are largely marginalised populations.
Originality/value
This is the first extensive evaluation of which self-employed groups participate in the informal economy.
International Entrepreneurship and Management Journal
Conventionally, street entrepreneurs were either seen as a residue from a pre-modern era that ... more Conventionally, street entrepreneurs were either seen as a residue from a pre-modern era that is gradually disappearing (modernisation theory), or an endeavour into which marginalised populations are driven out of necessity in the absence of alternative ways of securing a livelihood (structuralist theory). In recent years, however, participa-tion in street entrepreneurship has been re-read either as a rational economic choice (neo-liberal theory) or as conducted for culturalr easons(post-modern theory).The aim of this paper is to evaluate critically these competing explanations for participation in street entrepreneurship. To do this, face-to-face interviews were conducted with 871 street entrepreneurs in the Indian city of Bangalore during 2010 concerning their reasons for participation in street entrepreneurship. The finding is that no one explanation suffices.Some 12 % explain their participation in street entrepreneurship as necessity-driven,15 % as traditional ancestral activity, 56 % as a rational economic choice and 17 % as pursued for social or lifestyle reasons.The outcome is a call to combine these previously rival explanations in order to develop a richer and more nuanced theorisation of the multifarious motives for street entrepreneurship in emerging market economies.
Recent research has revealed that a large proportion of entrepreneurs start-up their ventures ope... more Recent research has revealed that a large proportion of entrepreneurs start-up their ventures operating on a wholly or partially off-the-books basis. Until now, it has been commonly assumed that those who operate in the informal economy are exclusively commercial entrepreneurs. They are assumed to be rational economic actors who weigh up the benefits of operating off-the-books against the costs of being caught and decide to operate in this manner. The aim of this paper is to evaluate critically this a priori assumption. Reporting evidence from a 2005/6 survey involving face-to-face interviews with 102 informal entrepreneurs in Moscow in Russia, the finding is that such entrepreneurs are not purely commercially driven. Examining their rationales, informal entrepreneurs are found to range from purely rational economic actors pursuing for-profit logics through to purely social entrepreneurs pursuing purely social logics, with the majority somewhere in-between combining both for-profit and social rationales. Neither do their logics remain static over time. What begins as a commercial entrepreneurial venture may become more socially oriented over time or vice versa. So too do their logics vary socio-spatially. Those living in deprived populations are more socially-orientated, whilst those in relatively affluent populations are comparatively more profit-driven. The outcome is a call for a more nuanced explanation of the complex and heterogeneous logics of informal entrepreneurs.
To some people, the shadow economy is a great example of
free economic activity at work. It is en... more To some people, the shadow economy is a great example of free economic activity at work. It is entirely unregulated except by the participants themselves; no tax is paid on shadow economic activity; and it may be possible to pursue activities in the shadow economy which are prohibited by law unjustly. Indeed, the smugglers of Sussex are still commemorated by the uniforms worn by members of bonfire societies on Guy Fawkes Night and they were, indeed, known as ‘free traders’. At the very least, it is certainly true that, in a world in which developed country governments are spending and borrowing more and more, the possibilities for shadow economic activity place a restraint upon governments. One of the reasons for the ‘Laffer curve’ effect, whereby tax revenues can start to fall as tax rates are increased, is the movement of economic activity out of the taxed economy and into the shadow economy.
Outsourcing refers to the subcontracting or transfer of activities (production processes or servi... more Outsourcing refers to the subcontracting or transfer of activities (production processes or services) previously performed within the unit under investigation to an external provider. In economic studies, the unit of analysis is normally a business, or sometimes a nation, so outsourcing refers to the subcontracting or transfer of activities previously performed within the business or nation to an external provider. In studies of consumption and consumer culture, in contrast, outsourcing is normally discussed in relation to the household as the unit of analysis, so outsourcing refers to the transfer of activities traditionally performed within the household on a self-servicing basis to external providers. Examples are domestic help, restaurant and take-out meals, daycare for children, and services in the realms of dog walking, personal shopping, lawn maintenance, tax preparation, and even changing the car oil.
In recent decades, there has emerged an assumption that in commercial consumer cultures, domestic... more In recent decades, there has emerged an assumption that in commercial consumer cultures, domestic services have become increasingly commodified. Domestic services refers to household work tasks that allow the social reproduction of members of the household. Routine domestic services range from everyday housework tasks (e.g., housecleaning, laundry, ironing, cooking, and washing up) through household administration and gardening to caring activities (e.g., child care, elder care, and pet care). Nonroutine domestic services, meanwhile, range from house-maintenance tasks (e.g., outdoor painting, plastering, decorating, and mending broken windows and appliances) to home improvement activities (e.g., installing double glazing, insulation, putting in a bathroom suite, building an extension or loft conversion, putting in central heating, and carpentry). Each and every one of these domestic services can be conducted using various sources of labor. For example, it cannot be asserted that cooking is always conducted as unpaid domestic work, and window cleaning by formal employees. Cooking, for instance, can be conducted as unpaid domestic work (e.g., where one cooks for oneself or one's family), unpaid community work (e.g., where one cooks for neighbors or friends on an unpaid basis), paid informal work (e.g., where one cooks in a restaurant on an off-the-books basis for “informal” payments that are not declared to the government for tax, benefit, or labor-law purposes), or formal employment (e.g., where one is a formally employed chef either registered self-employed or paid on a pay-as-you-earn basis). Different domestic services, therefore, do not belong to different types of work. Instead, all domestic services can be undertaken using each and every form of work. Four basic types of work, therefore, can be used to provide domestic services. They are • self-provisioning, which is unpaid work undertaken by household members for themselves and other members of their household; • unpaid community work, which is work provided on an unpaid basis by and for the extended family, social or neighborhood networks, and more formal voluntary and community groups, and ranges from kinship exchange through friendship/neighborly reciprocal exchanges to one-way volunteering for voluntary organizations; • paid informal work, where legal goods and services are exchanged for money, but these exchanges are unregistered by, or hidden from, the state for tax, social security, or labor-law purposes; and • paid formal employment, which is paid work that is declared to the state for tax, social security and labor law purposes.
The informal economy is defined as all work that is not “formal employment,” by which is meant pa... more The informal economy is defined as all work that is not “formal employment,” by which is meant paid work registered with the state for tax, social security, and labor law purposes. This defining of the informal economy in terms of what it is not accurately displays the centrality of formal employment in contemporary society. The consequence is that the informal economy is a residual catchall umbrella category into which all work that is not formal employment is cast. The result is that multifarious forms of work are brought together under this heading of the informal economy. To differentiate the heterogeneous types of work practice grouped together in this leftover, or residual, category, three broad types of informal work are commonly distinguished. First, there is self-provisioning, which is the unpaid household work undertaken by household members for themselves or for other members of their household. Second, there is unpaid community work, which is unpaid work conducted by household members by and for the extended family, social, or neighborhood networks and more formal voluntary and community groups. Third and finally, there is paid informal work, which is monetized exchange unregistered by or hidden from the state for tax, social security, and/or labor law purposes but which is legal in all other respects. The value of this concept to consumer culture and consumption is that it reveals that the production is not confined to the workplace and consumption to the home but is much more complex and nuanced in contemporary consumer culture.
Delocalization is the belief that there is an ongoing process whereby the process of making thing... more Delocalization is the belief that there is an ongoing process whereby the process of making things local is being reversed. For example, it is the view that the goods and services associated with consumption are becoming less local and are increasingly externally sourced. The delocalization process, however, can refer to economic, financial, cultural, or political matters. In recent decades, globalization as a term has perhaps begun to replace the concept of delocalization. However, the scaling up of economic, financial, cultural, or political processes from the local is not always to the global level. Delocalization, therefore, is a wider concept than globalization, and this captures how delocalization might also involve regionalization, at both the intranational and global regional levels. In recent decades, the thesis of delocalization has received widespread support. With the recent and rapid intensification of interregional and international trade and investment (economic delocalization) and the emergence of hypermobile and homeless capital (financial delocalization), a seamless and borderless world is asserted to be coming to fruition in which there is a diminution of the sovereignty of local, regional, and national states and their ability to regulate either national or international capital (political delocalization). The outcome is a loss of local cultures (cultural delocalization) due to the advent of a homogenous global culture founded on “Westernized” or “Americanized” cultural values. However, this rhetoric of economic, financial, political, and cultural delocalization has perhaps run ahead of the lived practice.
This Platform subgroup, held in Bratislava on 26 April 2023, brought together 50 participants fro... more This Platform subgroup, held in Bratislava on 26 April 2023, brought together 50 participants from 21 countries, representing labour, social security and tax authorities, various ministries, and European and national social partners. European Labour Authority (ELA) representatives were also present. The overarching aim has been to evaluate the use of social/labour ID cards as a tool for tackling undeclared work, including in subcontracting chains. The objectives have been to learn from the experiences of countries that have implemented social/labour ID cards about the challenges involved, what works and what does not, and to identify good practices regarding the use of social/labour ID cards for tackling undeclared work. This paper reports the outputs of the Platform subgroup. To do so, this report: Reviews the different characteristics of social/labour ID cards used in Platform members’ countries; Documents the experiences and challenges faced in developing, implementing, and monitoring social/labour ID cards as a tool for tackling undeclared work, identifying what works and what does not; Collects examples of good practice, considering their transferability; Provides suggestions on the possible next steps.
This report is an update of the 2017 European Platform tackling undeclared work report, An evalua... more This report is an update of the 2017 European Platform tackling undeclared work report, An evaluation of the scale of undeclared work in the European Union and its structural determinants: Estimates using the Labour Input Method (Williams et al., 2017), that provided estimates of undeclared work in the private sector for 2013. Employing the same methodology, this study provides estimates on the prevalence of undeclared work in the European Union (EU) in 2019.
The finding is that in 2019, 11.1 % of total labour input in the private sector in the EU is undeclared (11.6 % in 2013), and undeclared work accounts for 14.8 % of gross value added (GVA) in the private sector (16.4 % in 2013). However, these are unweighted averages, not considering the relative size of the labour force in each Member State. The weighted averages are that 9.7 % of total labour input in the private sector in the EU is undeclared (10.2 % in 2013), and undeclared work constitutes 14.6 % of GVA in the private sector (14.9 % in 2013). Therefore, between 2013 and 2019, there has been a decline in undeclared work at the EU level and a decline in 19 of the 26 Member States (estimates could not be produced for Malta in 2013), the exceptions being Bulgaria, France, Germany, Italy, Lithuania, the Netherlands and Romania. This displays the progress made in tackling undeclared work both in the EU as a whole and in most Member States.
This report estimates the prevalence and characteristics of dependent self-employment across EU M... more This report estimates the prevalence and characteristics of dependent self-employment across EU Member States and Norway. To do so, data from 2021 EU Labour Force Survey (EU-LFS), the largest European household sample survey of 2 580 815, of which 160 245 were self-employed, is used. The estimates of the extent of dependent self-employment need to be treated with caution and not as indisputable facts. Caution is required because currently, there is no consensus in theory or in national legislation on how the dependent self-employment, a ‘grey zone’ between genuine self-employment and waged employment, should be defined and measured. Despite the consensus that the dependent self-employed face two types of dependency, namely economic dependency and personal or organisational dependency, there is no universally accepted view on how each type of dependency should be measured, or whether both types of dependency should simultaneously be present to classify a worker as dependent self-employed. Therefore, estimates of the prevalence of dependent self-employment vary across different datasets and studies, depending on the indicators used to measure economic and organisational dependency, and whether both or just one form of dependency is assessed. In addition, legislative frameworks differ in terms of the criteria they use to decide whether a self-employed worker is genuine or dependent self-employed. This means that the estimates in this report do not align with the definitions in national legislation. For these reasons, the estimates provided should be read as the self-employed possessing characteristics of dependent self-employment and thus susceptible to, or at risk of, being dependent self-employed. There are also data limitations in this study. A limited number of questions are available to measure economic and organisational dependency in the EU-LFS. In addition, in some countries, a high number of self-employed refused to respond to these questions on their economic and organisational dependency, weakening the reliability of data and the robustness of cross-national comparisons.
The finding is that 1 in 31 (3.2 %) of all reporting themselves as self-employed without employees display the characteristics of being dependent self-employed. The estimates of the number of dependent self-employed without employees is numerically six times higher than the dependent self-employed with employees, revealing that the risk of dependency is much more prevalent amongst the self-employed without employees.
In the EU in 2020, a digital strategy was adopted and, in 2021, a ten-year 2030 Digital Compass r... more In the EU in 2020, a digital strategy was adopted and, in 2021, a ten-year 2030 Digital Compass roadmap to implement it. This calls for the development of accessible and human-centric digital public services and administration and by 2030, 100 % online provision of key public services for European citizens and businesses.
This report includes the assessment of progress carried out by the European Commission towards these 2030 Digital Compass goals, especially for services in two areas directly relevant for enforcement authorities and preventing undeclared work: 1) conducting regular business operations, and 2) starting a business. It then evaluates good practices in enforcement and other authorities on delivering these accessible and human-centric e-services, that make declared work easier, more beneficial, and acceptable, and therefore help transform undeclared work into declared work.
In many economies, there is a fragmented and uncoordinated approach across the multifarious gover... more In many economies, there is a fragmented and uncoordinated approach across the multifarious government bodies responsible for tackling undeclared work and a limited involvement of social partners, as well as an incomplete range of policy measures used. To resolve this, a holistic integrated strategic approach has been proposed. This is where governments: • Shift the objective from “reducing undeclared work” to “transforming undeclared work into declared work”; • Develop a whole government coordinated approach, and • Implement the full range of direct and indirect policy tools. The aim of this study is to provide a baseline assessment of the progress of enforcement authorities in the Western Balkans towards adopting a holistic approach. To assess this, a questionnaire survey was sent to the tax administrations and labour inspectorates in Albania [AL], Bosnia and Herzegovina [BA], Kosovo* [XK], Montenegro [ME], Republic of North Macedonia [MK] and Serbia [RS]. This report evaluates the self-reported progress made.
This diagnostic report evaluates the extent, nature and drivers of the informal economy in Azerba... more This diagnostic report evaluates the extent, nature and drivers of the informal economy in Azerbaijan followed by recommendations regarding how this sphere can be tackled.
Tackling undeclared work is often less effective because there is a fragmented and uncoordinated ... more Tackling undeclared work is often less effective because there is a fragmented and uncoordinated approach across the multifarious government bodies responsible for tackling undeclared work and a limited involvement of social partners, as well as an incomplete range of policy measures used. To resolve this, a holistic integrated strategic approach has been proposed. This is where governments: Shift the objective from “reducing undeclared work” to “transforming undeclared work into declared work”; Develop a whole government coordinated approach and fully involve social partners, and Implement the full range of direct and indirect policy tools. The aim of this study is to provide a baseline assessment of the progress of enforcement authorities in European countries towards adopting a holistic approach. To assess this, a questionnaire survey was sent to the 32 labour, tax and social security authorities participating in the European Platform tackling undeclared work (hereafter “the Platform”) in the 27 European Union member states plus Norway and Iceland (i.e., 28 labour authorities, 3 tax authorities and 1 social security authority). Responses were received from 23 labour authorities and 1 tax authority. This report evaluates the self-reported progress made.
In transition economies, a significant number of companies reduce their tax and social contributi... more In transition economies, a significant number of companies reduce their tax and social contributions by paying their staff an official salary, described in a registered formal employment agreement, and an extra, undeclared “envelope wage,” via a verbal unwritten agreement. The consequences include a loss of government income and a lack of fair play for lawful companies. For employees, accepting under-reported wages reduces their access to credit and their social protections. Addressing this issue will help increase the quality of working conditions, strengthen trade unions, and reduce unfair competition.
International Journal of Entrepreneurial Behavior & Research
The purpose of this paper is to evaluate which groups of the self-employed engage in the informa... more The purpose of this paper is to evaluate which groups of the self-employed engage in the informal economy. Until now, self-employed people participating in the informal economy have been predominantly viewed as marginalised populations such as those on a lower income and living in deprived regions (i.e. the “marginalisation thesis" ). However, an alternative emergent “reinforcement thesis” conversely views the marginalised self-employed as less likely to do so. Until now, no known studies have evaluated these competing perspectives.
Design/methodology/approach
To do this, the author report a 2013 survey conducted across 28 countries involving 1,969 face-to-face interviews with the self-employed about their participation in the informal economy.
Findings
Using multilevel mixed-effects logistic regression analysis, the finding is that the marginalisation thesis applies when examining characteristics such as the age, marital status, tax morality,occupation and household financial circumstances of the self-employed engaged in the informal economy. However, when gender and regional variations are analysed, the reinforcement thesis is valid.When characteristics such as the urban-rural divide and educational level are analysed, no evidence is found to support either the marginalisation or reinforcement thesis.
Research limitations/implications
The outcome is a call for a more nuanced understanding of the marginalisation thesis that the self-employed participating in the informal economy are largely marginalised populations.
Originality/value
This is the first extensive evaluation of which self-employed groups participate in the informal economy.
International Entrepreneurship and Management Journal
Conventionally, street entrepreneurs were either seen as a residue from a pre-modern era that ... more Conventionally, street entrepreneurs were either seen as a residue from a pre-modern era that is gradually disappearing (modernisation theory), or an endeavour into which marginalised populations are driven out of necessity in the absence of alternative ways of securing a livelihood (structuralist theory). In recent years, however, participa-tion in street entrepreneurship has been re-read either as a rational economic choice (neo-liberal theory) or as conducted for culturalr easons(post-modern theory).The aim of this paper is to evaluate critically these competing explanations for participation in street entrepreneurship. To do this, face-to-face interviews were conducted with 871 street entrepreneurs in the Indian city of Bangalore during 2010 concerning their reasons for participation in street entrepreneurship. The finding is that no one explanation suffices.Some 12 % explain their participation in street entrepreneurship as necessity-driven,15 % as traditional ancestral activity, 56 % as a rational economic choice and 17 % as pursued for social or lifestyle reasons.The outcome is a call to combine these previously rival explanations in order to develop a richer and more nuanced theorisation of the multifarious motives for street entrepreneurship in emerging market economies.
Recent research has revealed that a large proportion of entrepreneurs start-up their ventures ope... more Recent research has revealed that a large proportion of entrepreneurs start-up their ventures operating on a wholly or partially off-the-books basis. Until now, it has been commonly assumed that those who operate in the informal economy are exclusively commercial entrepreneurs. They are assumed to be rational economic actors who weigh up the benefits of operating off-the-books against the costs of being caught and decide to operate in this manner. The aim of this paper is to evaluate critically this a priori assumption. Reporting evidence from a 2005/6 survey involving face-to-face interviews with 102 informal entrepreneurs in Moscow in Russia, the finding is that such entrepreneurs are not purely commercially driven. Examining their rationales, informal entrepreneurs are found to range from purely rational economic actors pursuing for-profit logics through to purely social entrepreneurs pursuing purely social logics, with the majority somewhere in-between combining both for-profit and social rationales. Neither do their logics remain static over time. What begins as a commercial entrepreneurial venture may become more socially oriented over time or vice versa. So too do their logics vary socio-spatially. Those living in deprived populations are more socially-orientated, whilst those in relatively affluent populations are comparatively more profit-driven. The outcome is a call for a more nuanced explanation of the complex and heterogeneous logics of informal entrepreneurs.
To some people, the shadow economy is a great example of
free economic activity at work. It is en... more To some people, the shadow economy is a great example of free economic activity at work. It is entirely unregulated except by the participants themselves; no tax is paid on shadow economic activity; and it may be possible to pursue activities in the shadow economy which are prohibited by law unjustly. Indeed, the smugglers of Sussex are still commemorated by the uniforms worn by members of bonfire societies on Guy Fawkes Night and they were, indeed, known as ‘free traders’. At the very least, it is certainly true that, in a world in which developed country governments are spending and borrowing more and more, the possibilities for shadow economic activity place a restraint upon governments. One of the reasons for the ‘Laffer curve’ effect, whereby tax revenues can start to fall as tax rates are increased, is the movement of economic activity out of the taxed economy and into the shadow economy.
This is a repository copy of Explaining and tackling envelope wages in the Baltic Sea region: An ... more This is a repository copy of Explaining and tackling envelope wages in the Baltic Sea region: An institutional perspective.
This article evaluates critically the meta-narrative that capitalism is becoming totalizing and h... more This article evaluates critically the meta-narrative that capitalism is becoming totalizing and hegemonic. Recently, an emerging corpus of postdevelopment thought has begun to deconstruct this discourse, but only in relation to Western economies and the majority (third) world. To further contribute to this emerging critique, the aim is to analyze the degree to which capitalist economic practices have permeated postsocialist societies through a case study of Moscow. Based on face-to-face interviews with 313 households during 2005/06 concerning their work practices, a relatively shallow penetration of capitalism in this city is identified, with only a minority of households relying on the capitalist economy in particular, and the formal economy more generally, to secure their livelihood. The vast majority of the population is found to depend heavily on an array of noncapitalist economic practices; and capitalist and noncapitalist practices are identified as operating in tandem with, rather than in opposition to, each other. The outcome is a call to refute the universality of capitalist hegemony and to rethink the nature of economic development from a perspective that recognizes the persistence of economic pluralism. I
The use of general descriptive names, registered names, trademarks, service marks, etc. in this p... more The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use.
Purpose– Grounded in an emergent recognition that those people in formal employment conduct the v... more Purpose– Grounded in an emergent recognition that those people in formal employment conduct the vast majority of work in the shadow economy, the purpose of this paper is to evaluate for the first time the degree to which shadow work is conducted by those in formal jobs and the characteristics of those in formal employment who participate in the shadow economy.Design/methodology/approach– To do this, the authors report a 2007 survey of participation in the shadow economy involving 26,659 face-to-face interviews conducted in 27 European Union (EU) member states.Findings– The finding is that in the EU, the formally employed undertake a disproportionate share of work in the shadow economy. Analysing the characteristics of the employed most likely to work in the shadow economy, however, it is those who benefit least from the formal economy, namely, younger unmarried men and on lower incomes living in rural areas, working in the construction sector and in small firms.Research limitations/implications– The outcome is a tentative call for recognition that although people in formal employment conduct the vast majority of work in the shadow economy, these are mostly particular vulnerable and weaker groups of the formally employed. Whether similar findings prevail at other spatial scales and in other global regions now needs investigating.Practical implications– This survey displays the need for policy not to target the unemployed but particular groups of the formally employed.Originality/value– The first extensive evaluation of the extent to which shadow work is conducted by those in formal jobs and the characteristics of those in formal employment who participate in the shadow economy.
International Journal of Entrepreneurial Behaviour & Research, Nov 27, 2019
Purpose-In recent years, there has been a concern that employers are falsely classifying employee... more Purpose-In recent years, there has been a concern that employers are falsely classifying employees as self-employed to evade collective agreements and labour laws (e.g., minimum wages, working time legislation, protection in case of redundancy), and the result is that these dependent self-employed suffer poorer working conditions. The aim of this paper is to provide an extensive evaluation of the working conditions of those in dependent self-employment compared with the genuine self-employed. Methodology-To do so, data is reported from a 2015 European Working Conditions Survey of 35,765 workers in 28 European Union member states. Findings-Of the 4.3 per cent of the working population found to be in dependent selfemployment, the finding is that they have similar working conditions to the genuine selfemployed in terms of their physical and social environment and intensity of work. However, they have poorer job prospects and less ability to use their skills and discretion than the genuine self-employed. In terms of the working time quality, meanwhile, the finding is that they have better conditions than the genuine self-employed. Therefore, this analysis uncovers the need for a more nuanced understanding of the relative working conditions of the dependent selfemployed. Research implications/limitations-If the working conditions of the dependent self-employed are to be tackled, evaluation is now required of whether the current policy approaches, such as developing a hybrid category of employment with legal rights attached, address the specific working conditions that are worse for the dependent self-employed. Originality/value-This is one of the few papers which provides an extensive evaluation of the working conditions of those in dependent self-employment in the EU28.
Whilst entrepreneurship has traditionally been seen as solely an economic pursuit, increasingly a... more Whilst entrepreneurship has traditionally been seen as solely an economic pursuit, increasingly a complementary view has emerged, viewing entrepreneurship as a contextualised ‘social practice’—recognising how forms of entrepreneurship, taking place in everyday life, are situated in specific social contexts in which entrepreneurs are embedded. This paper contributes to on-going debates in the sub-fields of informal and ethnic entrepreneurship by outlining the heterogeneous nature of entrepreneurial practices amongst Ukrainian immigrants in the UK. The chapter highlights how individuals mobilise different forms of capital in developing their informal entrepreneurial practices, often utilising capital acquired in Ukraine to facilitate entrepreneurial practices in the UK and vice-versa using capital acquired in the UK to assist business ventures in Ukraine. The paper’s findings contribute to on-going debates by highlighting that the motivations of such entrepreneurs are driven out of opportunity as much as necessity. The chapter concludes by reflecting on the ramifications for policy and directions for further research.
The American Journal of Economics and Sociology, Apr 1, 2008
This article evaluates critically the meta-narrative that capitalism is becoming totalizing and h... more This article evaluates critically the meta-narrative that capitalism is becoming totalizing and hegemonic. Recently, an emerging corpus of postdevelopment thought has begun to deconstruct this discourse, but only in relation to Western economies and the majority (third) world. To further contribute to this emerging critique, the aim is to analyze the degree to which capitalist economic practices have permeated postsocialist societies through a case study of Moscow. Based on face-to-face interviews with 313 households during 2005/06 concerning their work practices, a relatively shallow penetration of capitalism in this city is identified, with only a minority of households relying on the capitalist economy in particular, and the formal economy more generally, to secure their livelihood. The vast majority of the population is found to depend heavily on an array of noncapitalist economic practices; and capitalist and noncapitalist practices are identified as operating in tandem with, rather than in opposition to, each other. The outcome is a call to refute the universality of capitalist hegemony and to rethink the nature of economic development from a perspective that recognizes the persistence of economic pluralism. I
International Journal of Social Economics, May 31, 2021
To transcend the view of employment as either purely formal or purely informal, this paper evalua... more To transcend the view of employment as either purely formal or purely informal, this paper evaluates the prevalence of quasi-formal employment where formal employers pay formal employees an unreported ("envelope") wage in addition to their formal reported salary. To explain the individual-level variations in quasi-formal employment, the "marginalisation" thesis is evaluated that this practice is more prevalent among vulnerable groups and to explain the countrylevel variations, a neo-institutionalist theory is evaluated that it is more prevalent where formal institutional failures lead to an asymmetry between the formal laws and regulations and the unwritten socially shared rules of informal institutions. Methodology To evaluate the individual-and country-level variations in the prevalence of quasi-formal employment, a multi-level logistic regression is provided of data from special 2019 Eurobarometer survey 92.1 involving 11,793 interviews with employees across 28 European countries (the 27 member states of the European Union and the United Kingdom). Findings Of the 3.5% of employees (1 in 28) who receive under-reported salaries, the marginalisation thesis is supported that it is largely vulnerable population groups. So too is the neo-institutionalist explanation that quasi-formal employment is more common in countries where the non-alignment of formal and informal institutions is greater, with the formal institutional failings producing this identified as lower levels of economic development, less modernised state bureaucracies, and lower levels of taxation and social protection. Practical Implications The policy implication is that tackling quasi-formal employment requires not only enforcement authorities to improve the risk of detection of this illegal wage practice but also governments to change wider macro-level structural conditions. These are outlined. Originality/value Contemporary new evidence is provided of the prevalence of quasi-formal employment along with how this illegal wage practice can be explained and tackled.
ABSTRACT This paper evaluates critically the conventional hierarchical representation of the form... more ABSTRACT This paper evaluates critically the conventional hierarchical representation of the formal/informal employment dualism, which depicts formal employment as extensive and positively contributing to economic development and social cohesion, and the separate realm of informal employment as weaker, inhabiting the margins and impairing progress and development. Although the discourses of informal employment as weak, marginal and separate from formal employment have been previously put under the spotlight, there has ...
Recently, there has been growing recognition that some formal employees receive from their formal... more Recently, there has been growing recognition that some formal employees receive from their formal employers two wages, namely an official declared wage plus an additional undeclared (envelope) wage, which reduces the tax and social contributions paid to the authorities. The aim of this paper is to evaluate two competing approaches for tackling this illegal practice, namely a conventional rational economic actor deterrence approach which increases the penalties and risks of detection, and an emergent social actor approach that seeks to improve tax morale. To do this, a 2015 nationally representative survey comprising 2,014 face-to-face interviews conducted in FYR of Macedonia is reported. The finding is that 13 per cent of employees surveyed received under-reported wages by an amount that averaged 39 per cent of their net salary, and that in just under half (46 per cent) of reported cases, employees are active instigators of such a wage arrangement. Logit regression analysis reveals no association between employees receiving under-reported wages and the perceived level of penalties and risk of detection, but a strong association with the level of tax morale. The theoretical and policy implications are then discussed.
This paper evaluates two contrasting policy approaches for tackling those working on an own-accou... more This paper evaluates two contrasting policy approaches for tackling those working on an own-account basis who do not declare all their paid activities to the authorities for tax, social security and/or labour law purposes. The conventional deterrence approach, based on a rational economic actor view, has sought to raise the costs of engaging in undeclared work by increasing the expected sanctions and risk of detection. Recently, an alternative preventative approach has emerged viewing participants more as social actors operating in the undeclared economy when there is a lack of vertical trust (in government) and horizontal trust (in others to operate legitimately). Consequently, this seeks to improve vertical and horizontal trust in order to elicit voluntary compliance. To evaluate the effectiveness of these contrasting policy approaches in tackling undeclared self-employment, evidence is reported from a 2019 Eurobarometer survey in seven SouthEast European countries (Bulgaria, Croatia, Cyprus, Greece, Hungary, Romania and Slovenia). This reveals that the likelihood of participation in undeclared selfemployment is not significantly associated with the deterrent measures of increasing the perceived sanctions and risk of detection but is significantly associated with the preventative measures of improving vertical and horizontal trust. The implications for theorising and tackling undeclared self-employment are discussed.
This paper evaluates the effect of unregistered and informal sector business ventures on the grow... more This paper evaluates the effect of unregistered and informal sector business ventures on the growth of formal sector enterprises. The hypotheses tested is that formal sector enterprises that have to compete against unregistered or informal sector business ventures suffer from lower levels of performance, measured by annual sales growth, annual employment growth and annual productivity growth. To evaluate this thesis, data is reported from a World Bank Enterprise Survey (WBES) of 760 enterprises in Italy collected in 2019. The finding is that formal sector enterprises that report competing against unregistered or informal sector business ventures have significantly lower annual sales growth and annual productivity growth than enterprises that do not. The paper concludes by discussing the theoretical and policy implications, along with the limitations of the study and future research required.
The aim of this paper is to contribute to an understanding of the entrepreneurship process in Afr... more The aim of this paper is to contribute to an understanding of the entrepreneurship process in Africa by evaluating the link between starting up unregistered and future firm performance. The widespread assumption has been that firms starting up unregistered in the informal economy suffer from poor performance compared to those starting up registered and in the formal economy. To test this poorer performance thesis, World Bank Enterprise Survey (WBES) data is evaluated from across 41 African countries covering the period from 2006 to 2013. Controlling for a comprehensive set of other determinants of firm performance, the finding is that formal enterprises with five or more employees that started up unregistered have significantly higher annual sales, employment and productivity growth rates compared with those firms that registered their operations at startup. The paper concludes by discussing the theoretical and policy implications of this finding.
Recent years have seen a questioning of the negative representation of informal sector entreprene... more Recent years have seen a questioning of the negative representation of informal sector entrepreneurship and an emergent view that it may offer significant benefits. This paper advances this rethinking by evaluating the relationship between business registration and future firm performance. Until now, the assumption has been that starting-up unregistered is linked to weaker firm performance. Using World Bank Enterprise Survey data on 2494 formal enterprises in Turkey, and controlling for other determinants of firm performance as well as the endogeneity of the registration decision, the finding is that formal enterprises that started-up unregistered and spent longer unregistered have significantly higher subsequent annual sales and productivity growth rates compared with those registered from the outset. This is argued to be because in such weak institutional environments, the advantages of registering from the outset are outweighed by the benefits of deferring business registration and the low risks of detection and punishment. The resultant implication is that there is a need to shift away from the conventional eradication approach based on the negative depiction of informal entrepreneurship as poorly performing, and towards a more facilitating approach that improves the benefits of business registration and tackles the systemic formal institutional deficiencies that lead entrepreneurs to decide to delay the registration of their ventures.
To advance understanding of informal sector entrepreneurship, the aim of this paper is to evaluat... more To advance understanding of informal sector entrepreneurship, the aim of this paper is to evaluate and explain the cross-country variations in the prevalence of informal sector competitors. To do so, World Bank Enterprise Survey (WBES) data is reported from 142 countries. This reveals that 27% of formal enterprises view competition from the informal sector as a major constraint on their operations, although this varies from 72% of formal enterprises in Chad to no formal enterprises in El Salvador. To explain these crosscountry variations, four competing theories are evaluated which variously view informal sector entrepreneurship and enterprise to be more prevalent when there is either: economic under-development (modernisation theory); high taxes and state over-interference (neoliberal theory); too little state intervention (political economy theory), or an asymmetry between the laws and regulations of formal institutions and the unwritten socially shared rules of informal institutions (institutional theory). A multilevel probit regression analysis confirms the modernisation and institutional theories, but not the neo-liberal and political theories. Beyond economic under-development, therefore, it is not too much or too little state intervention that is associated with the prevalence of informal sector competition but rather, whether the laws and regulations developed by governments are in symmetry with the norms, values and beliefs of entrepreneurs. The paper concludes by discussing the theoretical and policy implications of these findings.
To advance understanding of the reasons for informal sector entrepreneurship, this article evalua... more To advance understanding of the reasons for informal sector entrepreneurship, this article evaluates the determinants of crosscountry variations in the extent to which enterprises are unregistered when they start operating. Reporting the World Bank Enterprise Survey data on 67,515 enterprises across 142 countries, the finding is that one in five (19.9%) of the formal enterprises surveyed started-up unregistered, although this varies from all enterprises surveyed in some countries (e.g. Pakistan) to 1% of surveyed enterprises in Slovakia. To explain these crosscountry variations, four competing theories are evaluated which variously assert that nonregistration is determined by either: economic under-development and poorer quality governance (modernization theory); too much state interference (neoliberal theory); too little state intervention (political economy theory); or an incongruence between the laws and rules of formal institutions and the beliefs, values, and norms of informal institutions (institutional theory). A multilevel probit regression analysis confirms the modernization, political economy, and institutional theories but not neoliberal theory. Beyond economic under-development, therefore, nonregistration is associated with too little state intervention and the rules of formal institutions being incongruent with the socially shared beliefs of entrepreneurs. The article concludes by discussing the theoretical and policy implications of these findings.
Institutional theory has been widely used to explain entrepreneurship in the informal economy. A ... more Institutional theory has been widely used to explain entrepreneurship in the informal economy. A first wave of institutionalist theory argued that informal entrepreneurship resulted from formal institutional failures and a second wave that such entrepreneurship results from an asymmetry between the laws and regulations of formal institutions and the unwritten socially shared rules of informal institutions. This paper evaluates the validity of these two waves of institutionalist explanation and a new third wave of institutional theory explaining informal entrepreneurship in terms of a lack of both vertical and horizontal trust. Reporting data from a 2013 survey in Kosovo involving 500 face-to-face interviews with owners of small and medium-sized enterprises, 35.7 percent of sales are estimated to be unreported and a regression analyses reveals this is significantly higher among smaller and older firms, and firms owned by men. No significant association is found between formal institutional failings and the under-reporting of sales, but there is a statistically significant correlation between sales under-reporting and the level of vertical and horizontal trust. Taking account of the limitations of this single country study, the implications for theory and policy are then discussed.
The aim of this paper is to evaluate four competing theoretical perspectives that explain cross-n... more The aim of this paper is to evaluate four competing theoretical perspectives that explain cross-national variations in the level of informal sector entrepreneurship. Scholarship has until now argued that informal entrepreneurship is a result of either: economic under-development and a lack of modernization of governance (modernization theory); high taxes and state over-interference (neo-liberal theory); inadequate state intervention to protect workers from poverty (political economy theory) or the asymmetry between the laws and regulations of formal institutions and the unwritten socially shared rules of informal institutions (institutional theory). Reporting the World Bank Enterprise Survey (WBES) on the varying prevalence of informal entrepreneurship across 142 countries, the finding is that neo-liberal theory is refuted but the tenets of the modernization, political economy and institutional theories are confirmed. Informal entrepreneurship is found to be significantly higher when there is economic under-development, a lack of modernization of governance, inadequate state intervention to protect workers from poverty and greater asymmetry between the formal and informal institutions. The paper concludes by discussing the theoretical and policy implications of these findings.
To advance understanding of the entrepreneurship process in developing economies, this article ev... more To advance understanding of the entrepreneurship process in developing economies, this article evaluates whether registered enterprises that initially avoid the cost of registration, and focus their resources on overcoming other liabilities of newness, lay a stronger foundation for subsequent growth. Analyzing World Bank Enterprise Survey data across 127 countries, and controlling for other firm performance determinants, registered enterprises that started up unregistered and spent longer operating unregistered are revealed to have significantly higher subsequent annual sales, employment, and productivity growth rates compared with those that registered from the outset. The theoretical and policy implications are then discussed.
This paper introduces this special issue by providing an overview of the various policy options a... more This paper introduces this special issue by providing an overview of the various policy options and approaches available for tackling enterprise in the informal economy. It firstly reviews four possible hypothetical policy options, namely doing nothing, eradicating informal sector enterprise, moving formal enterprises into the informal economy, or formalising enterprise in the informal economy. Displaying that formalising informal sector enterprise is the most viable and most commonly adopted approach, it then reviews the two approaches of using either direct controls, which increase the costs of operating informally and/or the benefits of operating formally, or indirect controls that seek greater self-regulation. Following this, the ways in which these approaches can be combined is then reviewed. The outcome is a comprehensive introductory overview and conceptual framework for contextualising the arguments of the papers in this special issue.
In recent years, it has been argued that citizens view tax evasion and the informal economy as so... more In recent years, it has been argued that citizens view tax evasion and the informal economy as socially acceptable when the codified laws and regulations (formal institutions) of a country are not aligned with the norms, values and beliefs of the population (informal institutions). Reporting a 2013 survey of 238 entrepreneurs' views on the acceptability of tax evasion and the informal economy in Slovakia and Ukraine, this paper confirms for the first time this institutional asymmetry thesis with regard to entrepreneurs, revealing that the gap between state morality and entrepreneurial morality has an impact on the acceptability of illegal behaviour. The paper concludes by discussing the theoretical and policy implications.
This paper evaluates which entrepreneurs participate in the informal sector. Until now, the domin... more This paper evaluates which entrepreneurs participate in the informal sector. Until now, the dominant view has been that entrepreneurs from marginalised groups benefiting least from the formal sector are more likely to do so. To evaluate this marginalisation thesis, we report a 2013 survey of 11 central and east European countries involving 707 face-to-face interviews with entrepreneurs about their participation in the informal sector. Using logistic regression analysis, the finding is that the marginalisation thesis applies when examining characteristics such as the household financial circumstances and age of entrepreneurs engaged in the informal sector. However, when gender variations are analysed, the thesis is negatively confirmed. Meanwhile, no association is found when analysing characteristics such as the educational level, social class and area inhabited. The outcome is a call to move beyond the marginalisation thesis and towards a more nuanced understanding of which entrepreneurs participate in the informal sector.
Purpose – The purpose of this paper is to advance a new explanation for cross-country variations ... more Purpose – The purpose of this paper is to advance a new explanation for cross-country variations in the participation of small businesses in the informal economy. Drawing upon institutional theory, it proposes that the greater the asymmetry between the codified laws and regulations of formal institutions (state morality) and the unwritten socially shared rules of informal institutions (civic morality), the greater is the propensity of small businesses to participate in the informal economy. To analyse this, the extent to which small businesses evade payroll taxes by paying employees an undeclared (envelope) wage in addition to their official declared salary is analysed.
Design/methodology/approach – To evaluate this, data are reported from a 2013 Eurobarometer survey involving 5,174 face-to-face interviews with employees in small businesses across the 28 member states of the European Union (EU-28).
Findings – The finding is that small businesses display a greater propensity to engage in this informal wage practice in countries where there is a higher degree of asymmetry between the codified laws and regulations of formal institutions (state morality) and the unwritten socially shared rules of informal institutions (civic morality). A multi-level logistic regression analysis reveals these to be countries which have lower qualities of governance, lower levels of taxation and intervention in the labour market and less effective social transfer systems.
Research limitations/implications – The major limitation of this study is that it has only examined whether employees in small businesses receive informal wages. Future cross-country surveys should analyse a wider range of ways in which small businesses participate in the informal economy such as under-reporting turnover.
Originality/value – This is the first known analysis of cross-country variations in the participation of small businesses in the informal economy.
In recent years, scholars adopting institutional theory have explained the
tendency of entreprene... more In recent years, scholars adopting institutional theory have explained the tendency of entrepreneurs to operate in the informal sector to be a result of the asymmetry between formal institutions (the codified laws and regulations) and informal institutions (norms, values and codes of conduct). The aim of this article is to further advance this institutional approach by evaluating the varying degrees of informalization of entrepreneurs and then analysing whether lower levels of formalization are associated with higher levels of institutional asymmetry. To do this, a 2012 survey of the varying degrees of informalization of 300 entrepreneurs in Pakistan is reported. The finding is that 62% of entrepreneurs operate wholly informal enterprises, 31% largely informal and 7% largely formal enterprises. None operate wholly formal enterprises. Those displaying lower levels of formalization are shown to be significantly more likely to display higher levels of institutional asymmetry, exhibiting greater concerns about public sector corruption, possessing lower tax morality and being more concerned about high tax rates and the procedural and distributive injustice and unfairness of the authorities. These entrepreneurs tend to be lower-income, younger and less-educated entrepreneurs. The article concludes by discussing the theoretical and policy implications of these findings.
— Recognizing that enterprises operate at varying levels of informality, this paper evaluates the... more — Recognizing that enterprises operate at varying levels of informality, this paper evaluates the determinants of their degree of informality. Reporting a 2012 survey of 300 informal microenterprises in the city of Lahore in Pakistan, the finding is that the key predictors of their level of informality are the characteristics of the entrepreneur and enterprise, rather than their motives or the wider formal and informal institutional compliance environment. Lower degrees of informality are associated with women, older, educated, and higher income entrepreneurs and older enterprises with employees in the manufacturing sector. The paper concludes by discussing the theoretical and policy implications.
— Recognizing that enterprises operate at varying levels of informality, this paper evaluates the... more — Recognizing that enterprises operate at varying levels of informality, this paper evaluates the determinants of their degree of informality. Reporting a 2012 survey of 300 informal microenterprises in the city of Lahore in Pakistan, the finding is that the key predictors of their level of informality are the characteristics of the entrepreneur and enterprise, rather than their motives or the wider formal and informal institutional compliance environment. Lower degrees of informality are associated with women, older, educated, and higher income entrepreneurs and older enterprises with employees in the manufacturing sector. The paper concludes by discussing the theoretical and policy implications.
Although a small literature has recently emerged that highlights the existence
of social entrepr... more Although a small literature has recently emerged that highlights the existence
of social entrepreneurship, the idea that entrepreneurship and enterprise culture
might be other than profit-driven capitalist endeavour is seldom entertained.
Instead, enterprise culture is widely viewed as a by-word for contemporary
capitalist culture. The aim of this article is to evaluate critically this dominant
narrative. To do this, GEM’s UK Social Entrepreneurship Monitor is used to
compare the levels and ratios of commercial-to-social entrepreneurship across
various population groups and areas in the UK. The finding is that one-third of
all entrepreneurs are driven primarily by social goals rather than profit, and that
cultures of entrepreneurship markedly vary across population groups and areas,
with rural and marginalized populations displaying a greater propensity to
engage in social rather than profit-driven entrepreneurship. The article
concludes by discussing the public policy implications of this finding that
enterprise cultures are not everywhere and always profit-driven, raising
questions not only about whether the promotion of profit-driven
entrepreneurship in marginalized populations is akin to parachuting in an alien
enterprise culture but also whether a focus upon social entrepreneurship might
promote greater inclusiveness in the enterprise culture agenda than is currently
the case.
Although a small literature has recently emerged that highlights the existence of social entrepre... more Although a small literature has recently emerged that highlights the existence of social entrepreneurship, the idea that entrepreneurship and enterprise culture might be other than profit-driven capitalist endeavour is seldom entertained. Instead, enterprise culture is widely viewed as a by-word for contemporary capitalist culture. The aim of this article is to evaluate critically this dominant narrative. To do this, GEM's UK Social Entrepreneurship Monitor is used to compare the levels and ratios of commercial-to-social entrepreneurship across various population groups and areas in the UK. The finding is that one-third of all entrepreneurs are driven primarily by social goals rather than profit, and that cultures of entrepreneurship markedly vary across population groups and areas, with rural and marginalized populations displaying a greater propensity to engage in social rather than profit-driven entrepreneurship. The article concludes by discussing the public policy implications of this finding that enterprise cultures are not everywhere and always profit-driven, raising questions not only about whether the promotion of profit-driven entrepreneurship in marginalized populations is akin to parachuting in an alien enterprise culture but also whether a focus upon social entrepreneurship might promote greater inclusiveness in the enterprise culture agenda than is currently the case.
The aim of this paper is to evaluate critically the public policy approach that seeks to tackle t... more The aim of this paper is to evaluate critically the public policy approach that seeks to tackle the underground economy in deprived populations by deterring people from engaging in such work by ensuring that the expected cost of being caught and punished is greater than the economic benefit of participating. Reporting evidence from an extensive study of underground work in 861 households in contemporary England, this paper uncovers that although some underground work in such populations is conducted for purely money-making purposes, the majority is carried out for friends, neighbors and kin for rationales associated with redistribution and building social capital rather than purely to make or save money. As such, the argument here is that unless governments seek to develop substitute mechanisms to enable engagement in such paid favors but on a legitimate basis alongside deterrence measures, then attempts to tackle the underground economy in deprived populations will end up destroying the social support networks that other realms of public policy are presently so actively seeking to develop. The paper concludes by providing an outline of the public policy changes required.
The overarching aim was to evaluate safe reporting and complaint mechanisms for workers to denoun... more The overarching aim was to evaluate safe reporting and complaint mechanisms for workers to denounce abuse and seek support. The objectives were to learn from the experiences of countries that have implemented such mechanisms about the challenges involved, what works and what does not, and to identify good practices regarding their use for tackling undeclared work. This paper reports the outputs of the Platform subgroup. To do so, this report: Reviews the different characteristics of safe reporting and complaint reporting tools in Platform members’ countries. Documents experiences and challenges faced in developing, implementing, and monitoring safe reporting and complaint reporting tools to tackle undeclared work, identifying what works and what does not. Collects examples of good practice, considering their transferability. Provides suggestions on the possible next steps.
One of the Sustainable Development Goals of the United Nations’ 2030 Agenda for Sustainable Devel... more One of the Sustainable Development Goals of the United Nations’ 2030 Agenda for Sustainable Development is Decent Work and Economic Growth (SDG 8). While the actions suggested to reach this goal target numerous actors in the labor market, such as entrepreneurs running small and medium-sized enterprises, unemployed people, students and young people, persons with disabilities, children and adults forced to work, and migrant workers, these are not the only important groups to focus on. This paper discusses a group receiving less attention: self-employed workers. Through a review of literature and the legislative framework on the social benefits of self-employment across 31 European countries, challenges to the self-employed achieving decent work are identified. The most prominent challenges are that, in many countries, these workers lack social protection against unemployment or accidents at work and that the conditions for their entitlement to social benefits are more demanding than for employees. These constitute impediments to achieving SDG 8‘s goal of “decent work for all”, and SDG 10′s aim to “reduce inequalities”.
Measuring participation in undeclared work using surveys has been criticized for under-estimating... more Measuring participation in undeclared work using surveys has been criticized for under-estimating the level of engagement due to social desirability bias that leads to an under-reporting of “bad” behavior. Until now, few studies have sought to quantify the amplitude of this bias in surveys of undeclared work. The aim of this paper is to fill this gap by using the most appropriate methodologies for estimating the probability of misleading responses in such surveys. Reporting data from special Eurobarometer survey no. 498 conducted in 2019 and involving 27,565 respondents in EU-27 countries and the UK, only 3.5% openly admitted to participating in undeclared work. The results of a Probit model with correction for misclassified cases (i.e., those undertaking undeclared work but declaring that they do not) reveals that nearly a quarter (23.3%) of the respondents undertaking undeclared work refused to openly admit this during the survey, due to the social desirability bias. The estimated overall proportion of undeclared workers is 17.3%. We obtained this value by correcting for both misclassification and the additional source of negative bias due to the large imbalance in the data (i.e., observations in one class are much lower than the other). The outcome of this new advanced approach in analysing undeclared work is that survey estimates can now report its size and determinants in a more accurate manner than has been previously the case.
The aim of this study has been to provide learning on how KPIs can be developed measuring the eff... more The aim of this study has been to provide learning on how KPIs can be developed measuring the effectiveness of labour inspectorates in transforming undeclared work into declared work. To do so, this study has: 1. Outlined a common assessment framework based on a holistic approach for developing labour inspectorates’ strategic goals, objectives and KPIs. 2. Developed a method that labour inspectorates can employ to develop their strategic objectives and performance indicators, tailored to their context, measuring their effectiveness on each component of the holistic approach. 3. Co-produced with two labour inspectorates a set of strategic objectives and KPIs tailored to their context assessing their effectiveness on each component of the holistic approach.
This report is an update of the 2017 European Platform tackling undeclared work report that provi... more This report is an update of the 2017 European Platform tackling undeclared work report that provided estimates of undeclared work in the private sector for 2013. Employing the same methodology, this study provides estimates on the prevalence of undeclared work in the European Union (EU) in 2019.The finding is that in 2019, 11.1 % of total labour input in the private sector in the EU is undeclared (11.6 % in 2013), and undeclared work accounts for 14.8 % of gross value added (GVA) in the private sector (16.4 % in 2013). However, these are unweighted averages, not considering the relative size of the labour force in each Member State. The weighted averages are that 9.7 % of total labour input in the private sector in the EU is undeclared (10.2 % in 2013), and undeclared work constitutes 14.6 % of GVA in the private sector (14.9 % in 2013).
Purpose-The aim of this paper is to evaluate whether the acceptability of different types of busi... more Purpose-The aim of this paper is to evaluate whether the acceptability of different types of business-and individual-level non-compliance has different impacts on the likelihood of participation in undeclared work. Design/methodology/approach-To evaluate this, data is reported on the EU27 and the UK from the special Eurobarometer survey no. 498, using a novel statistical methodology that deals with two potential sources of bias: sample selection error (avoidance to answer to the question about participation to undeclared work) and misclassification in the response variable (false statements about engagement in undeclared work). Findings-This reveals the association between tax morale and participation in undeclared work. It shows that citizens find far more unacceptable undeclared work conducted by firms than individuals, but both are significantly associated with participation in undeclared work although the greatest effect is clearly exerted by individual-level tax morale. Originality/value-This paper uses a methodology which accounts for the potential bias related to sample selection error and misclassification in the response variable of participation in undeclared work and sheds light on different components of tax morale.
The aim of this paper is to deepen understanding of the relationship between sustainable developm... more The aim of this paper is to deepen understanding of the relationship between sustainable development, localisation and the purchase of goods and services from the informal economy. This has not before been investigated. To do so, it reports a survey of 1,209 respondents conducted during October-December 2021 in Romania, a country with one of the largest informal economies in the European Union. The findings reveal a link between consumers' motives to purchase informal goods and services and the pursuit of sustainable development through localisation. The analysis shows that there is no purely sustainability-driven consumer in the informal economy, but this rationale is prevalent as one of several motives for a large proportion of consumers purchasing goods and services from the informal economy, who do so explicitly for the purposes of environmental protection and localisation. The implications for theorising and tackling the informal economy are then discussed.
The twelfth meeting in plenary of the European Platform tackling undeclared work (henceforth “the... more The twelfth meeting in plenary of the European Platform tackling undeclared work (henceforth “the Platform”) was held in Bratislava on 23-24 March 2022 as a hybrid meeting both onsite as well as online. The first day of this meeting was a thematic day dedicated to the topic of operationalising holistic approaches to tackling undeclared work. The Platform tackling defines the holistic approach as: “Where national governments use a whole government approach to tackle undeclared work, by joining-up on the policy and enforcement level of both strategy and operations the fields of labour, tax and social security law, and involve and cooperate with social partners and other stakeholders. This approach involves using the full range of direct and indirect policy measures available to enhance the power of, and trust in, authorities respectively. The objective is to transform undeclared work into declared work in an effective manner.” To discuss the operationalisation of this holistic approach, each component was addressed in different sessions. Firstly, the session in plenary addressed the development of cross-government joined-up strategy to achieve the strategic objective of transforming undeclared work into declared work. To cover the remaining components, two parallel workshops were then held on joining-up national and cross-border operations (Workshop 1) and developing cross-government cooperation on data collection, sharing and analysis (Workshop 2), followed by two further parallel workshops on improving social partner involvement (Workshop 3) and beyond deterrence: adopting the full range of preventative measures (Workshop 4). This report summaries the presentations, discussion, and key outcomes.
The twelfth meeting in plenary of the European Platform tackling undeclared work (henceforth “the... more The twelfth meeting in plenary of the European Platform tackling undeclared work (henceforth “the Platform”) was held in Bratislava on 23-24 March 2022 as a hybrid meeting both onsite as well as online. The first day of this meeting was a thematic day dedicated to the topic of operationalising holistic approaches to tackling undeclared work. This thematic day took forward previous discussions and activity on this issue. The holistic approach was the topic of the Platform’s inaugural seminar held on 2 December 2016. Since then, the Platform’s understanding of the holistic approach has become ever more refined and nuanced as it has been applied to tackling undeclared work in specific sectors (e.g., construction , agriculture , road transport , tourism , HORECA ) and different types of undeclared work (e.g., envelope wages , bogus self-employment , collaborative platforms , letterbox companies ). To further operationalise this holistic approach, in 2020, a subgroup of the Platform was established with the resultant report containing a self-assessment questionnaire to assess progress towards a holistic approach. In January 2022, this self-assessment questionnaire was used to conduct a survey evaluating the degree to which a holistic approach towards undeclared work is being adopted by national authorities. The outcome was a study mapping the progress of national authorities towards a holistic approach using this common assessment framework. A draft of the study provided the background information for the thematic discussion day reported here. This output paper summarises the presentations and discussions at the thematic day.
Purpose-The aim of this paper is to evaluate contrasting ways of tackling self-employment in the ... more Purpose-The aim of this paper is to evaluate contrasting ways of tackling self-employment in the informal sector. Conventionally, the participation of the self-employed in the informal sector has been viewed as a rational economic decision taken when the expected benefits outweigh the costs, and thus enforcement authorities have sought to change the benefit-to-cost ratio by increasing the punishments and chances of being caught. Recently, however, neo-institutional theory has viewed such endeavor as a product of a lack of vertical trust (in government) and horizontal trust (in others) and pursued trust-building strategies to nurture voluntary compliance. Design/methodology/approach-To evaluate these contrasting policy approaches, data are reported from special Eurobarometer survey 92.1 conducted in 2019 across 28 European countries (the 27 member states of the European Union and the United Kingdom) involving over 27,565 interviews. Findings-Using probit regression analysis, the finding is that the likelihood of participation in informal selfemployment is not associated with the level of expected punishments and chances of being caught, but is significantly associated with the level of vertical and horizontal trust, with a greater likelihood of participation in informal self-employment when there is lower vertical and horizontal trust. Practical implications-The outcome is a call for state authorities to shift away from the use of repressive policy measures that increase the penalties and chances of being caught and toward trust-building strategies to nurture voluntary compliance. How this can be achieved is explored. Originality/value-Evidence is provided to justify a shift toward seeking trust-building strategies by state authorities to engender voluntary compliance among the self-employed operating in the informal sector in Europe.
The aim of this paper is to evaluate the practice of under-reporting wages (and its multifarious ... more The aim of this paper is to evaluate the practice of under-reporting wages (and its multifarious forms) in the construction industry, which is a dominant type of undeclared work found in the industry, and how it can be explained and tackled. To do so, a mixed-methods approach is used, including in-depth interviews, focus groups and a representative national survey comprising 1,212 respondents collected during April–May 2021 in Romania, a country with one of the highest shares of undeclared work in the European Union. A logistic regression analysis shows that this practice is not confined to vulnerable groups but is rather an extensive phenomenon. Evaluating how wage under-reporting could be tackled, the finding is that there is no significant relationship between how employees perceive the level of sanction and the risk of detection and their likelihood of participating in wage under-reporting. However, the results reveal the significance of social norms; those who have acquaintances who receive under-reported wages are more likely to engage themselves in this wage arrangement. The implications for theory and practice are then considered.
In recent decades scholars have acknowledged that transactions in the informal economy have not v... more In recent decades scholars have acknowledged that transactions in the informal economy have not vanished with modernization and industrialization as expected but rather remain an important contemporary aspect of overall production and consumption across the world, in both developing and developed countries. Yet little is known about the profile of the consumers in this realm or what drives them to purchase from the informal economy. A systematic review of the literature investigating consumption in the informal economy reveals a severely underdeveloped area of consumer studies with significant gaps in terms of its theoretical approaches, methods and regional coverage. The findings of the existing literature is that multiple motives are used by consumers for justifying their purchases in the informal economy beyond the dominant simplistic view that they do simply for financial gain or for a lower price (namely, it identifies social ends and failures in formal market provision in terms of availability, speed of provision and quality). The outcome is a recognition that responsibility to reducing this phenomenon with negative effects on governments, businesses, workers and consumers lies not just with public authorities but also practitioners who need to correct the failures in formal market provision. The significant gaps identified in the literature are then used to highlight a comprehensive future research agenda, which includes the need for the development of an institutionalist theoretical perspective when explaining consumers‘ participation in the informal economy and social marketing interventions.
The aim of this report is to compare social identity (ID) card schemes in the construction sector... more The aim of this report is to compare social identity (ID) card schemes in the construction sector in different European countries to make recommendations for the design of a social ID card scheme in the construction sector in Romania. Social ID cards provide information on the employer and employee to confirm if workers on a construction site should be on the site or not as well as other information about the worker (e.g., health and safety certificates, training successfully undertaken, driver licences). To understand social ID cards, it is useful to view them as a certification tool for a worker containing visible and secure electronic information. They are an example of the use of information and communication technologies (ICTs). This report evaluates in detail the social ID card schemes in 11 European countries, namely: Belgium, Finland, France, Iceland, Italy, Lithuania, Luxembourg, the Netherlands, Norway, Spain, and Sweden.
On 16 September 2021, the European Platform tackling undeclared work organised an online seminar ... more On 16 September 2021, the European Platform tackling undeclared work organised an online seminar on Tackling undeclared work in the HORECA sector. The seminar brought together 43 participants from 20 countries, representing labour inspectorates and other enforcement authorities, European and national level social partners in the HORECA sector, as well as representatives from the European Agency for Occupational Safety and Health (EU OSHA), the European Commission and the European Labour Authority (ELA). The intention of the seminar was to stimulate the thoughts of participants on potential policy tools which could be adopted to transform undeclared work into declared work in the HORECA sector and to share learning on policy initiatives that could be more widely adopted. This learning resource extends an earlier Platform study published in 2020 on tackling undeclared work in the wider tourism sector.1 This paper describes the outcomes of the seminar. Its focus upon undeclared work in the HORECA sector complements previous sector-based Platform learning resources produced on tackling undeclared work in the agricultural, construction, road transport and air transport sectors
To tackle participation in unregistered employment, the conventional policy approach has been to ... more To tackle participation in unregistered employment, the conventional policy approach has been to deter such work by increasing the penalties and risk of detection. Recently, an alternative preventative approach has emerged that tackles participation in unregistered employment by improving citizens vertical trust (in the state) and horizontal trust (in each other). To evaluate these competing policy approaches across different European regions, Eurobarometer survey data collected in 2019 is analysed. The finding is that in the EU as a whole, the likelihood of participating in unregistered employment is not significantly associated with the perceived penalties and likelihood of being caught, but there is a strong significant association between the likelihood of participating in unregistered employment and the level of vertical and horizontal trust, suggesting the need to moved beyond a deterrence approach. However, one approach does not fit all European regions. A variegated approach is required. In SouthEast Europe, East-Central Europe and the Nordic nations, it is only horizontal trust that is significantly associated the likelihood of engaging in unregistered employment, whilst in Southern Europe it is vertical trust and the risk of detection. The implications for theory and policy are discussed.
The eleventh meeting in plenary of the European Platform tackling undeclared work (the Platform) ... more The eleventh meeting in plenary of the European Platform tackling undeclared work (the Platform) was held in Bratislava on 21-22 October 2021 as a hybrid meeting both onsite as well as online. The first day of this meeting was a thematic day dedicated to examining COVID-19’s impact on enforcement authorities’ work and priorities. This thematic day took forward previous discussions on this issue. In 2020, at the start of the COVID-19 pandemic, the Platform held two webinars on the impacts of COVID-19. In early 2021, there was also a webinar on combating fraud in the short-term financial support schemes and from June to September 2021, a pilot Peer Learning Dialogue (hereafter PLD) was held on the lessons learned from the COVID-19 pandemic for the organisation of inspections and inspectorates, with seven countries represented (Greece, Ireland, Latvia, Norway, Portugal, Spain and Sweden). This report summarises the presentations and discussions at the thematic day. The next section reports the presentations in the opening session setting the scene and addressing the changes in the labour market and the operations of enforcement authorities. This is then followed in the third and fourth sections by a report of the presentations (detailing the outcomes of the PLD) and the discussions that took place in four workshops, as follows: The third section reports discussion of the lessons learned from the COVID-19 pandemic for the organisation of inspections, including a workshop on the use of alternative types of inspection to the physical inspection to detect and prevent undeclared work as well as a parallel workshop on changes in the planning and conduct of physical workplace inspections to detect and prevent undeclared work. The fourth section then reports discussion of the lessons learned from the COVID-19 pandemic for the organisation of inspectorates, covering both a workshop on changes in ways inspectorates operate when tackling undeclared work and the new skills and competencies required by inspectorates, as well as a parallel workshop on teleworking and other changes in the world of work and their implications for inspectorates. The fifth and final section summarises the key learning outcomes in terms of the practical recommendations on the way forward.
This report documents the outcomes of the first Peer Learning Dialogue (PLD) on the lessons learn... more This report documents the outcomes of the first Peer Learning Dialogue (PLD) on the lessons learned from the COVID-19 pandemic for the organisation of inspections and inspectorates. The aim of this Peer Learning Dialogue has been to produce recommendations and suggested actions (1) which European Platform Tackling Undeclared Work members can implement in their national practices and (2) where mutual learning at Platform and European Labour Authority level could occur to prevent all authorities having to “reinvent the wheel”.
The aim of this report is to evaluate “e-formalization” in European countries. To tackle informal... more The aim of this report is to evaluate “e-formalization” in European countries. To tackle informality, the lockdown and physical distancing measures resulting from the COVID-19 pandemic has resulted in a decrease in onsite workplace inspections in Europe and the greater use of e-initiatives as a complement to the traditional onsite workplace inspection. Therefore, the COVID-19 pandemic has made e-formalization more relevant and pertinent, accelerating the trend towards the use of innovative, information-intensive and connectivity based e-initiatives for tackling the informal economy.
Usually, studies on the informal economy focus mainly upon those working in the informal economy ... more Usually, studies on the informal economy focus mainly upon those working in the informal economy (supply side). However, many exchanges in the informal economy are initiated by purchasers asking how much a good or service costs if paid cash in hand. Therefore, the aim of this paper is to advance understanding of who make purchases in the informal economy and the reasons of the consumers making these purchases (demand side). Two potential explanations are evaluated. Firstly, consumers are explained as rational economic actors seeking a more convenient deal or profit maximisation (i.e., lower price or better value for money), making purchases from the informal economy due to the lack of availability of the product or service they need on the formal market, or they make such purchases involuntarily, due to the lack of perfect information necessary to make a fully rational economic decision when purchasing. Secondly, the consumers are portrayed as social actors pursuing community help. Using a multilevel mixed-effects logistic regression analysis on a 2019 Eurobarometer interviews in 27 EU member states and the UK reveal how the prevalence of these motives significantly varies across populations and regions. The theoretical and policy implications of the findings are discussed in the concluding section.
The aim of this paper is to evaluate the impact on service sector
businesses of competitors’ unde... more The aim of this paper is to evaluate the impact on service sector businesses of competitors’ undeclared work practices and the policy measures service enterprises perceive as most effective in tackling such noncompliant behaviour. The results of a survey with 1,130 service sector businesses reveals that illegal competition is the most common major obstacle for their activity and more than a half are severely affected by competitors undertaking undeclared work. However, the proportion of businesses perceiving competitors undertaking undeclared work as a major obstacle varies across different service industries, as do the policy measures that businesses view as required to tackle undeclared work. The paper concludes by discussing the policy implications and calling for a shift from the dominant deterrence approach aimed at eradicating undeclared work to measures aimed at supporting the transition to declared work.
Launched in 2010, Connect brings together 40 data sets, 22 billion lines of data and 600 million ... more Launched in 2010, Connect brings together 40 data sets, 22 billion lines of data and 600 million documents. Her Majesty's Revenue and Customs (HMRC) have spent £90 million on developing this system, but it has helped secure an additional £3 billion in tax revenues. More than 7 out of 10 enquiry case selections are generated by Connect.
Everything that standard management and business textbooks talk about – production, buying, selli... more Everything that standard management and business textbooks talk about – production, buying, selling, workplace, motivation, structuring your business – takes place strictly in the context of the market. Businesses are established, people are hired, services and goods are sold and then the money is counted. This is a very simplified sequence of activities, but that is largely what would be covered in most management courses. However, even in the most money-driven settings, there are many activities that take place and are not reducible to money. Think of when people work overtime just because of a sense of duty or care, give advice without asking anything in return or break the rules in order to help a customer. What is common to all these examples is that they might generate value, but they are not motivated by the generation of value (see Chapter 10). In fact, caring for others, voluntary work and gift giving happen all around us and are at the centre of everyday life. It should not surprise us then that they happen in for-profit organizations too, as ordinary people ignore money and act, either individually or in groups, in ways that support each other. In this chapter, we will discuss how a lot of everyday economic life is practically anarchist, or rather, that we very often live like anarchists, even if we are encouraged not to.
The chapter reveals how it is entirely mistaken to view formal paid labour as dominant and always... more The chapter reveals how it is entirely mistaken to view formal paid labour as dominant and always the preferred option of citizens. The implications of this analysis point to the potential feasibility of alternative futures for work beyond market-oriented paid formal labour, or what is associated with ‘capitalist’ work.
This paper critically evaluates competing explanations for the participation of ethnic minority g... more This paper critically evaluates competing explanations for the participation of ethnic minority groups in informal employment. These interpret their participation either through a structuralist lens arising out of ‘exclusion’ from formal employment or through a neo-liberal and/or post-structuralist lens driven by voluntary ‘exit’ from formal institutions. To evaluate critically these competing explanations, this paper reports a survey of the experiences of Pakistani immigrants in informal employment in Sheffield, including fifty face-to-face interviews and two focus groups. The findings highlight informal employment amongst this Pakistani ethnic minority group is neither universally driven by exclusion nor exit. Instead, some participate mostly due to exclusion, others mostly for exit rationales and some for a combination of the two, with different mixtures across different groups and types of informal employment. The outcome is a call for greater appreciation of the multifarious character of undeclared work and a move beyond simplistic explanations and policy responses.
In this article, we contribute to debates on how social networks sustain migrants' entrepreneuria... more In this article, we contribute to debates on how social networks sustain migrants' entrepreneurial activities. By reporting on 31 interviews with Eastern Euro-pean migrants in the UK, we provide a critical lens on the tendency to assume that migrants have ready-made social networks in the host country embedded in co-ethnic communities. We extend this limited perspective by demonstrating how Eastern European migrants working in the UK transform blat social networks, formulated in the cultural and political contours of Soviet society, in their everyday lived experiences. Our findings highlight not only the monetarization of such networks but also the continuing embedded nature of trust existing within these networks, which cut across transnational spaces. We show how forms of social capital based on Russian language use and legacies of a shared Soviet past, are just as important as the role of 'co-ethnics' and 'co-migrants' in facilitating business development. In doing so, we present a more nuanced understanding of the role that symbolic capital plays in migrant entrepre-neurial journeys and its multifaceted nature.
This paper critically evaluates competing explanations for the participation of ethnic minority g... more This paper critically evaluates competing explanations for the participation of ethnic minority groups in informal employment. These interpret their participation either through a structuralist lens arising out of ‘exclusion’ from formal employment or through a neo-liberal and/or post-structuralist lens driven by voluntary ‘exit’ from formal institutions. To evaluate critically these competing explanations, this paper reports a survey of the experiences of Pakistani immigrants in informal employment in Sheffield, including fifty face-to-face interviews and two focus groups. The findings highlight informal employment amongst this Pakistani ethnic minority group is neither universally driven by exclusion nor exit. Instead, some participate mostly due to exclusion, others mostly for exit rationales and some for a combination of the two, with different mixtures across different groups and types of informal employment. The outcome is a call for greater appreciation of the multifarious character of undeclared work and a move beyond simplistic explanations and policy responses.
It is widely believed that there is no alternative to capitalism. Over the last two decades howev... more It is widely believed that there is no alternative to capitalism. Over the last two decades however, the critical geography literature on diverse economies has demonstrated the existence of alternatives to capitalism by revealing the persistence of non-capitalist forms of work and organisation. The aim in this paper is to question the validity and usefulness of continuing to frame these non-capitalist practices as 'alternatives'. Positioning non-capitalist economic practices as 'alternatives' fails to capture not only the ubiquity of such practices in everyday life, but also how those engaging in them do not see them as 'alternatives' in the sense of a second choice, or less desirable option, to capitalist practices. The intention in doing so is to reveal that it is not non-capitalist practices that are 'alternative' but rather, capitalist practices themselves, thus opening up the future to the possibility of a non-capitalist world more fully than has so far been the case.
Purpose – The purpose of this paper is to propose a new way of explaining participation in the in... more Purpose – The purpose of this paper is to propose a new way of explaining participation in the informal economy as resulting from the asymmetry between the codified laws and regulations of a society's formal institutions (government morality) and the norms, values and beliefs of the population that constitute its informal institutions (societal morality). The proposition is that the greater the asymmetry between government morality and societal morality, the greater is the propensity to participate in the informal economy.
Design/methodology/approach – To evaluate this institutional asymmetry theory, the results are reported of 1,306 face-to-face interviews conducted during 2013 in the UK.
Findings – The finding is a strong correlation between the degree of institutional asymmetry (measured by tax morale) and participation in the informal economy. The lower the tax morale, the greater is the propensity to participate in the informal economy. Using ordered logistic regression analysis, tax morale is not found to significantly vary by, for example, social class, employment status or wealth, but there are significant gender, age and spatial variations with men, younger age groups, rural areas and Scotland displaying significantly lower tax morale than women, older people, urban areas and London.
Practical implications – Rather than continue with the current disincentives policy approach, a new policy approach that reduces the asymmetry between government morality and societal morality is advocated. This requires not only changes in societal morality regarding the acceptability of participating in the informal economy but also changes in how formal institutions operate in order for this to be achieved.
Originality/value – This paper provides a new way of explaining participation in the informal economy and reviews its consequences for understanding and tackling the informal economy in the UK.
Purpose – Conventionally, participation in the informal economy has been explained by viewing cit... more Purpose – Conventionally, participation in the informal economy has been explained by viewing citizens as rational economic actors participating when the pay-off is greater than the expected cost of being caught and punished, and thus tackled by raising the sanctions and risks of detection. Given that many citizens do not engage even when the benefits outweigh the costs, a new social actor approach has begun to emerge which explains the informal economy as arising when tax morality is low and seeks to foster commitment to compliance. The purpose of this paper is to provide an evidence-based evaluation of these competing policy approaches.
Design/methodology/approach – To do so, the results are reported of 1,306 face-to-face interviews undertaken during 2013 in the UK.
Findings – The finding is that raising the sanctions and risks of detection has no significant impact on the likelihood of participation in the informal sector. However, participation in the informal economy is significantly associated with tax morality. Indeed, the only time that increasing the sanctions and risks of detection reduces the level of participation in the informal economy is amongst citizens with very low tax morality.
Practical implications – Rather than continue with the current rational economic actor approach of increasing the penalties and risks of detection, this case study of the UK reveals that a new policy approach is required that seeks to improve tax morality by introducing measures to reduce the acceptability of participating in the informal economy.Whether this is more widely applicable now needs to be tested, given the dominance throughout the world of this punitive rational economic actor approach.
Originality/value – This paper provides evidence supporting a new social actor approach towards explaining and tackling participation in the informal economy.
With the cultural turn/s in urban studies, participation in alternative retail channels (i.e. inf... more With the cultural turn/s in urban studies, participation in alternative retail channels (i.e. informal and/or secondhand modes of goods acquisition) has been reconceptualised as motivated more by the search for fun, sociality, distinction, discernment, the spectacular and so forth rather than by economic necessity. The aim of this paper is to evaluate critically this view. Drawing upon 511 interviews conducted in af uent and deprived neighbourhoods of two English cities, this is found to re ect accurately the meanings that relatively af uent populations attach to their usage of alternative retail channels. However, economic necessity remains the principal reason amongst lower-income urban populations who view their reliance on such channels when the majority does not as a sign of their exclusion from mainstream consumption practices. The paper thus concludes by calling for greater sensitivity to economic processes and recognition of the socio-spatial variations in the meanings of such channels.
Downloaded from politique de suppression de ce type d'emploi réduit plutôt que n'améliore l'inclu... more Downloaded from politique de suppression de ce type d'emploi réduit plutôt que n'améliore l'inclusion sociale dans le sens où celui-ci permet aux citoyens de s'aider mutuellement. En guise de conclusion, les conséquences politiques des résultats des auteurs sont analysées. ❖❖❖ D Zusammenfassung Üblicherweise wird bezahlte informelle Arbeit als Hindernis bei der sozialen Eingliederung gesehen. Begriffen als ausbeuterische, schlecht bezahlte Arbeit, die von marginalisierten Gruppen der Bevölkerung und für skrupellose Arbeitgeber verrichtet wird, behindere solche Arbeit die soziale Eingliederung, weil sie Arbeitnehmern den Zugang zu den normalen sozialen Rechten, die formelle Beschäftigung mit sich bringt, verwehre, und weil sie Arbeitsplätze im formellen Sektor gefährde. Sie müsse daher bekämpft werden, damit 'soziale Eingliederung' (d.h. Eingliederung in formelle Beschäftigung) gelingen könne. In diesem Artikel wird dieser Begriff von bezahlter informeller Arbeit und sozialer Eingliederung kritisch evaluiert. Ausgehend von den Ergebnissen von Fallstudien in benachteiligten Vierteln britischer Städte wird zunächst gezeigt, dass bezahlte informelle Arbeit überwiegend von und für Nachbarn 'Freunde und Verwandte verrichtet wird, zum Zweck entweder der Umverteilung oder des, community building' (Netzwerke aufbauen). Vor diesem Hintergrund wird argumentiert, dass eine Politik der Bekämpfung solcher Arbeit die soziale Eingliederung − in einem weiteren Sinne verstanden, bei dem die gegenseitige Hilfe unter Bürgern ermöglicht wird − nicht erhöht sondern reduziert. Abschliessend werden Folgerungen für die Politik in diesem Bereich gezogen. ❖❖❖
Fostering community engagement and tackling undeclared work: the case for an evidence-based ‘join... more Fostering community engagement and tackling undeclared work: the case for an evidence-based ‘joined-up’ public policy approach, Regional Studies 39, 1145–1155. Examining two realms of public policy treated as unrelated by academics and policy-makers, namely fostering community engagement (and social capital) and tackling undeclared work, it is here shown that in the UK, these spheres are only unconnected when considering the lives of populations in affluent areas. In deprived areas, where most community engagement occurs on a one-to-one basis and usually involves the exchange of cash for favours, undeclared work and community engagement are conjoined. To conclude, therefore, the paper explores how a ‘joined-up’ public policy approach could be achieved.
English Grounded in the view that undeclared work is conducted under work relations akin to emplo... more English Grounded in the view that undeclared work is conducted under work relations akin to employment and motivated primarily by monetary gain, the thrust of public policy has been to deter this work by seeking to ensure that the expected cost of being caught and punished is greater than the potential economic benefits. This article reviews recent research that reveals that, although some undeclared work is market-like and conducted for monetary gain, a large proportion is carried out under relations more akin to unpaid mutual aid. It then critically evaluates the implications of pursuing deterrence as well as other approaches. The result is a proposal for a new policy approach that recognises the heterogeneous nature of undeclared work and actively seeks to facilitate its legitimisation. Français Se fondant sur l'opinion que le travail non déclaré s'effectue dans le cadre de relations de travail qui ressemblent à l'emploi et dont le motif principal est le gain financier, la politique générale s'est surtout efforcée de décourager ce travail en s'assurant que la sanction qu'encourrait une personne qui se ferait prendre soit supérieure aux bénéfices financiers potentiels. Une révision de recherches récentes révèle que, bien que parfois le travail non déclaré s'effectue selon les règles du marché et dans le but d'obtenir un gain financier, il s'effectue pour une large part dans le cadre de relations qui ressemblent davantage à une aide mutuelle non payée. Les implications qu'entrainent la poursuite de la dissuasion ainsi que d'autres approches sont évaluées de façon critique. Il en résulte une proposition pour une nouvelle approche politique qui reconnaît la nature hétérogène du travail non déclaré et cherche activement à faciliter sa légitimisation. Español Con fundamento en la opinión de que el trabajo no declarado está dirigido bajo las relaciones de trabajo semejantes a las de empleo y motivado sobre todo por la ganancia monetaria, la introducción de la política pública ha sido para impedir este trabajo buscando el asegurarse de que el coste esperado al ser cogido y castigado sea mayor que los potenciales beneficios económicos. Evaluando la investigación reciente que revela que aunque algún trabajo no declarado es tipo de mercado y está dirigido por ganancias monetarias, se lleva a cabo una gran proporción bajo relaciones más semejantes a la de la ayuda mutua no pagada, las implicaciones de seguir se disuaden así como se evalúan críticamente otros acercamientos. El resultado es una propuesta para un nuevo acercamiento político que reconozca la naturaleza heterogénea del trabajo no declarado y busque el facilitar activamente su legitimidad.
The aim of this article is to evaluate critically the UK public policy approach towards undeclare... more The aim of this article is to evaluate critically the UK public policy approach towards undeclared work that targets deprived populations and seeks to deter people from engaging in such work by ensuring that the expected cost of being caught and punished is greater than the economic benefit of participating. Reporting evidence from an extensive study of undeclared work in 861 households in contemporary England, this article reveals not only that such work is concentrated in relatively affluent populations rather than in deprived areas, but also that the vast majority of such work in deprived populations is conducted for friends, neighbours and kin for rationales associated with redistribution and building social capital rather than making or saving money. Given this recognition that undeclared work in deprived populations is in major part a product of a culture ofpaying for favours and a form of mutual aid, the argument of this article is that the current deterrence approach needs to be replaced by an approach that seeks to provide substitute mechanisms to enable such populations to continue to engage in such paid favours but in a more legitimate manner than is currently the case.
This paper evaluates critically the current UK policy approach that seeks to cultivate voluntary ... more This paper evaluates critically the current UK policy approach that seeks to cultivate voluntary work through the 'third sector' route of developing voluntary groups. To do this, rst, the results of recent nationwide surveys of volunteering are analysed. Revealing how informal volunteering (helping people on an individual basis) is not only of the same order of magnitude as formal volunteering (helping people via groups) but is also the predominant form of voluntary activity amongst deprived populations, this paper argues that the current third sector approach needs to be complemented by a 'fourth sector' approach that cultivates one-to-one aid. To reinforce this nding and to investigate how this can be achieved, case study evidence of the nature of volunteering amongst af uent and deprived populations in rural England is then reported. This reveals that while participation in voluntary groups in rural areas is heavily skewed towards the relatively af uent who use them as sociability vehicles, one-to-one aid is the principal type of voluntary work used by lower income populations to improve their material circumstances. The paper concludes by outlining possible policy initiatives that could be used to implement this fourth sector approach.
South East European Journal of Economics and Business, 2022
Institutional theory has explained informal employment to result from formal institutional failin... more Institutional theory has explained informal employment to result from formal institutional failings. The aim of this paper is to identify the formal institutional failings associated with informal employment so that action can be taken by governments. Using the Tobit model for econometric analysis and reporting conditional and unconditional marginal effects of the 2021 Balkans Business Barometer survey conducted in six Western Balkan economies
International Journal of Environmental Research and Public Health, 2021
Although major advances have been made in relation to explaining the supply side of the informal ... more Although major advances have been made in relation to explaining the supply side of the informal economy, this is not the case for the demand-side of the informal economy. This study analyses for the first time the purchasers of undeclared goods and services in the healthcare sector. To evaluate the purchase of undeclared healthcare goods and services, logistic regression analysis and robustness tests are used on 3048 interviews in Cyprus, Greece, Italy and Malta. The finding is that an important share of the purchasers make this type of purchase unknowingly. However, no difference in terms of socio-economics characteristics of those who knowingly and those who unknowingly made purchases of undeclared healthcare goods and services was identified. Meanwhile a significant influence of trust (in government and in other citizens) has been identified in relation to those who made these purchases knowingly. As such, policy measures aimed at decreasing unknowing purchases and at nurturing trust are discussed in the concluding section.
The objectives of this report are:
to review the elements of an effective education and awarene... more The objectives of this report are: to review the elements of an effective education and awareness raising campaign on undeclared work. to set out a proposal for an education and awareness raising campaign on undeclared work in the Western Balkans, and to provide good practice examples of specific education and awareness raising activities that are transferable to Western Balkan economies. The outcome is to set out what is required for an effective education and awareness raising campaign on the benefits of declared work in Western Balkan economies
In many economies, there is a fragmented and uncoordinated approach across the multifarious gover... more In many economies, there is a fragmented and uncoordinated approach across the multifarious government bodies responsible for tackling undeclared work and a limited involvement of social partners, as well as an incomplete range of policy measures used. To resolve this, a holistic integrated strategic approach has been proposed. This is where governments: • Shift the objective from “reducing undeclared work” to “transforming undeclared work into declared work”; • Develop a whole government coordinated approach, and • Implement the full range of direct and indirect policy tools. The aim of this study is to provide a baseline assessment of the progress of enforcement authorities in the Western Balkans towards adopting a holistic approach. To assess this, a questionnaire survey was sent to the tax administrations and labour inspectorates in Albania [AL], Bosnia and Herzegovina [BA], Kosovo* [XK], Montenegro [ME], Republic of North Macedonia [MK] and Serbia [RS]. This report evaluates the self-reported progress made.
On 11th June 2021, the Western Balkan Network Tackling undeclared work held a workshop for enforc... more On 11th June 2021, the Western Balkan Network Tackling undeclared work held a workshop for enforcement authorities in the Western Balkans on data collection, sharing and analysis to tackle undeclared work. This learning resource reports the outcomes of the workshop. This workshop was organised to provide an opportunity for enforcement authorities in the Western Balkans to engage in mutual learning with each other to improve their knowledge and awareness of building efficient data mining systems to detect, prevent and predict undeclared work. The intention was to enable enforcement authorities in the Western Balkans to hear about the experiences of other enforcement authorities regarding the challenges they have faced in relation to data collection, sharing and analysis and to learn how they have sought to overcome them. Section 2 briefly introduces the challenges for enforcement authorities surrounding data collection to ensure that they have access to data that can enable undeclared work to be identified. Section 3 then introduces the challenges of data sharing across government departments to enable individual enforcement authorities to improve the data at their disposal and section 4 introduces the challenges that need to be overcome to conduct effective data analysis. Section 5 then reports good practice examples on data collection, sharing and analysis in Western Balkan economies.
In the Labour Inspectorate in Serbia, the strategic objective of transforming undeclared work int... more In the Labour Inspectorate in Serbia, the strategic objective of transforming undeclared work into declared work has been fully adopted and operationalized in the measurement of the performance of the inspectorate. The outcome is that in 2020, of the total of 5,951 persons found working undeclared during inspections, 4,072 (68%) were subequently employed on declared contracts.
A ChatBot application Inspector Virtual Assistant has been introduced to provide support for citi... more A ChatBot application Inspector Virtual Assistant has been introduced to provide support for citizens and entrepreneurs completing the online complaint reporting form on the web portal of the Coordination Commission for Inspection Oversight (inspektor.gov.rs). In the first year, 16,884 complaints have been reported by citizens and businesses, of which 1,134 were sent to the Labour Inspectorate (involving unregistered employment), 1,061 to the Market Inspectorate (including undeclared selfemployment), and 1,036 to the Tax Inspectorate. Name(s) of authorities/bodies/ organisations involved State Inspection Contact Centre Sectors All Target groups Workers and businesses
On 13th May 2020, as part of the “Relaunch” decree in Italy, it was agreed that from 1 June to 15... more On 13th May 2020, as part of the “Relaunch” decree in Italy, it was agreed that from 1 June to 15 July 2020, requests for regularisation may be submitted for undocumented migrant agricultural workers, and domestic workers and carers. The aim was to regularize undocumented migrant workers enabling them to move into the declared economy As of April 15 2021, of the 220,000 people nationwide who had applied to the interior ministry for a permit, just 11,000, or 5%, had received one.
In 2009, the Republika Srpska Labour Inspectorate established a call centre established to receiv... more In 2009, the Republika Srpska Labour Inspectorate established a call centre established to receive complaints on some labour law irregularities on businesses practices, including undeclared work. These complaints can be reported either by telephone or electronically by email or online. In the first quarter of 2021, 77 complaints were reported related to undeclared employment and 58 related to undeclared self-employment, of which 60% have been subsequently found to be valid. On average, the period it takes to respond to a complaint is 7-10 days.
In Albania, the State Labour and Social Services Inspectorate has introduced an online inspection... more In Albania, the State Labour and Social Services Inspectorate has introduced an online inspection platform to prevent abusive behaviour by labour inspectors and improve the efficiency and effectiveness of the planning and conduct of inspections. It now includes data from 34,500 inspections. The outcomes have been that: 45% more undeclared work has been transformed into declared work within the inspection process (without punitive measures); 14% more complaints have been addressed for resolution (increased trust in the institution); 86% more immediate interventions have occurred (with concrete measures taken by businesses after inspection) and flagrant violations of legal provisions corrected; 21% less sanctions have occurred for the violation of legal provisions, and 0.6% fewer cases of major accidents at work.
Collecting, sharing and analysing data can improve enforcement authority performance not only in ... more Collecting, sharing and analysing data can improve enforcement authority performance not only in detecting undeclared work but also preventing non-compliance. The aim of this toolkit is to support enforcement authorities in the Western Balkans to improve their knowledge and awareness of how to develop efficient databases to detect, prevent and predict undeclared work. The objectives of this toolkit are (i) to discuss the challenges faced around data collection, sharing and analysis and (ii) to offer tips on how data collection, sharing and analysis could be improved, not least by reporting good practices.
The Hellenic Labour Inspectorate identified that some employers were abuses the COVID-19 short-te... more The Hellenic Labour Inspectorate identified that some employers were abuses the COVID-19 short-term job retention scheme by engaging in the bogus declaration of suspension of employees’ employment contracts. The outcome was that they were claiming for government support for the suspension of these employees’ contracts, but the employees were continuing to work. To solve this, they changed the legislation via Ministerial Decision No. 9500/322 in March 2021 so that employers had to register the suspension of contracts prior to the actual suspension, and penalties were introduced for those failing to do so. The outcome was a reduction in the bogus declaration of the suspension of employees’ employment contracts
Many economies tackle undeclared work by increasing the real or expected costs of participation i... more Many economies tackle undeclared work by increasing the real or expected costs of participation in undeclared work. This can be achieved by increasing the perceived and/or actual sanctions imposed on those caught or by increasing the real and/or expected risk of detection. This report focuses upon the range and effectiveness of the available sanction tools to facilitate learning among enforcement authorities. The objectives of this report are to share and deepen understanding of: the effectiveness of using sanctions to tackle undeclared work, and the range of sanction tools available.
On 19th April 2021, the Western Balkan Network Tackling Undeclared Work held an online seminar th... more On 19th April 2021, the Western Balkan Network Tackling Undeclared Work held an online seminar that brought together representatives from enforcement authorities and social partners. The intention was to discuss and share understanding of the major challenges they face in pursuing greater cooperation and provide tips for other Western Balkan economies on how these challenges might be addressed. It was also an opportunity to explore the scope for greater cooperation and to share learning on the type of initiatives that social partners can pursue to protect legitimate businesses and workers by transforming undeclared work into declared work. Around 40 participants from the Ministries of Labour, Labour Inspectorates, Tax Authorities and social partners (representatives of trade unions and employers’ associations) across the Western Balkans exchanged views and contributed to peer learning by answering the key discussion topics: identifying major challenges in developing greater cooperation; ways to improve the cooperation between social partners and authorities; and naming practical steps that could be undertaken to improve cooperation. The aim of this learning resource is to summarise the discussion at the seminar. To do so, section 2 reports the discussion on the scope for greater cooperation between enforcement authorities and social partners, section 3 reports the discussion on the types of initiatives in which social partners could become more involved and section 4 the next steps that can be taken.
This toolkit firstly evaluates the current involvement of Western Balkan social partners in tackl... more This toolkit firstly evaluates the current involvement of Western Balkan social partners in tackling undeclared work and secondly, provides inspiration for social partners by reporting numerous policy initiatives being used by social partners to tackle undeclared work across the Western Balkans, European Union and beyond.
Although enforcement authorities play a key role in tackling undeclared work, social partners als... more Although enforcement authorities play a key role in tackling undeclared work, social partners also have an interest in preventing undeclared work. Employer federations wish to tackle the unfair competition that results from other businesses operating in the undeclared economy and trade unions wish to protect declared workers and tackle unscrupulous employers who use undeclared employment.
The aim of this study is to evaluate the current involvement of social partners in tackling undeclared work in the Western Balkans. To achieve this, a survey was undertaken of social partners in the six Western Balkan economies to evaluate: (i) their objectives in relation to tackling undeclared work; (ii) the current level of social partner cooperation with government authorities and (iii) the current range of initiatives pursued by social partners to tackle the undeclared economy.
To incentivize employers to regularize their unregistered workers, employers were offered short-t... more To incentivize employers to regularize their unregistered workers, employers were offered short-term financial assistance of 130 EUR per month per employee for two consecutive months during the COVID19 public health emergency, conditional upon the employer putting the worker on a declared contract for at least one year. Funding of 6 million EUR was allocated to this regularization scheme.
Certified cash registers, which send transactions automatically to the tax administration, are in... more Certified cash registers, which send transactions automatically to the tax administration, are in use in many economies. What is innovative in Slovenia is that the purchasers can electronically check whether the receipt has been verified by scanning the code on the invoice in the 'Check the receipt' app. To incentivise purchasers to do so, purchasers become eligible for a prize fund which pays up to EUR 25 000 using a random lottery draw.
To overcome an uncoordinated and fragmented approach where the various organisations involved in ... more To overcome an uncoordinated and fragmented approach where the various organisations involved in tackling undeclared work operate in "silos" with separate strategies and targets, Serbia has coordinated strategy towards undeclared work through a single body.
A Commission for the Suppression of the Grey Economy has been established to develop and implemen... more A Commission for the Suppression of the Grey Economy has been established to develop and implement an action plan to move beyond a fragmented approach where the organisations involved in tackling undeclared work operate in “silos” with separate strategies and targets.
The report compiles existing policy tools and and good practices adopted by Governments in Asia a... more The report compiles existing policy tools and and good practices adopted by Governments in Asia and the Pacific and Latin America and the Caribbean on formalizing informal employment in the formal sector. To provide a framework for understanding the full range of good practices on formalizing the employment of informal workers in the formal sector, the report sets out the integrated strategic policy approach outlined by ILO Recommendation No. 204 on facilitating the transition to formality. The report was prepared in the context of the project, Policymaking for More Inclusive and Sustainable Economies in Asia and the Pacific and in Latin America, implemented by ESCAP, in partnership with the Government of Colombia through the Agencia Presidencial de Cooperación Internacional de Colombia (APC Colombia)
Given the prevalence of informality, this article proposes a typology for classifying countries b... more Given the prevalence of informality, this article proposes a typology for classifying countries by the extent and nature of employment in the informal economy, rather than by the composition of their formal economies. The author analyses ILO data on employment in the informal economy in 36 developing countries, and shows that there is a significant correlation between cross-national variations in the degree and intensity of informalization and cross-national variations in social and economic indicators such as levels of GNP per capita, corruption, poverty, taxation and social contributions. The article concludes by discussing implications for theory and policy.
Iberoamerican Journal of Entrepreneurship and Small Business, 2020
Objective: The objective of this paper is to evaluate the different explanations provided by comp... more Objective: The objective of this paper is to evaluate the different explanations provided by competing theories for informal sector competitors being viewed as hindering formal entrepreneurs more in some countries than others. Theoretical background: These theories variously explain such crosscountry variations as determined by: economic under-development (modernization theory); government over-interference and high taxes (neo-liberal theory); too little government intervention (political economy theory), or the asymmetry between the laws and regulations of formal institutions and entrepreneurs' views on the acceptability of participating in the informal economy (institutional theory). Methods: To evaluate these theories, the chosen method focus on World Bank Enterprise Survey data on 31 Latin American and Caribbean countries using binary probit regression analysis. Main results: The findings show significant crosscountry differences, ranging from 58.1 per cent of entrepreneurs viewing informal sector competition as a major constraint in Bolivia to 11.1 percent in Dominica. The binary probit regression analysis confirms the modernization and institutional theories, only partially confirms political economy theory, but refutes neo-liberal theory. Theoretical contribution: The paper concludes by discussing the implications for theory and the policy initiatives required to reduce informal sector competition.
Since the turn of the millennium, there has been widespread recognition that a sizeable and growi... more Since the turn of the millennium, there has been widespread recognition that a sizeable and growing share of the global workforce is in the informal sector. To explain this, neo-liberals contend that enterprises operate in the informal sector due to high taxes, public sector corruption and too much state interference in the free market and that the consequent remedy is to reduce taxes, public sector corruption and the regulatory burden via minimal state intervention. This paper evaluates critically this neo-liberal policy approach. To do this, International Labor Organization data from 16 Latin American countries on the share of the workforce in informal sector enterprises is compared with cross-national variations in tax rates, corruption and levels of state interference using World Bank development indicators. Revealing that one in three non-agricultural workers in Latin America are employed in informal sector enterprises and analyzing the economic and social conditions in different countries, no support is found for the neo-liberal tenets that higher tax rates, greater levels of corruption and state interference are correlated with larger informal sectors. Instead, higher levels of regulation and state intervention are associated with smaller (not larger) informal economies resulting in a tentative call for more, rather than less, regulation of the economy and state intervention to protect workers.
Given the commonality of employment in the informal economy, this paper moves beyond classifying ... more Given the commonality of employment in the informal economy, this paper moves beyond classifying economies by the composition of their formal economies and instead classifies economies by their degree of informalisation. Analysing International Labour Organisation data on the varying level of employment in the informal economy across 16 Latin American economies, the outcome is to reveal a significant correlation between cross-national variations in the degree of informalisation and cross-national variations in GNP per capita, poverty and social contribution levels. The paper concludes by discussing the implications for theory and policy.
To evaluate whether entrepreneurs participate in the informal economy due to either their involun... more To evaluate whether entrepreneurs participate in the informal economy due to either their involuntary 'exclusion' from, or voluntary 'exit' from, the formal economy, a 2003 survey of the reasons for engaging in informal sector entrepreneurship in urban Brazil. The finding is that although similar proportions participate in informal sector entrepreneurship for exclusion as exit rationales, women do so more commonly due to their involuntary 'exclusion' from the formal economy and men more due to their decision to voluntary 'exit' the formal economy. The outcome is a call to shift from an either/or to a both/and approach when explaining informal sector entrepreneurship and for wider research on the weightings attached to exit and exclusion in different spatial contexts so as to develop a spatially contingent explanation of how men's and women's reasons for participating in informal sector entrepreneurship differ across the globe.
To evaluate whether entrepreneurs participate in the informal economy due to either their involun... more To evaluate whether entrepreneurs participate in the informal economy due to either their involuntary'exclusion'from, or voluntary'exit'from, the formal economy, a 2003 survey of the reasons for engaging in informal sector entrepreneurship in urban Brazil.
International Journal of Entrepreneurship and Small Business, 2020
The aim of this paper is to investigate whether the future firm performance of formal enterprises... more The aim of this paper is to investigate whether the future firm performance of formal enterprises that started-up unregistered and spent longer unregistered are significantly different to those that registered at the outset. Reporting World Bank Enterprise Survey data on 3,420 formal enterprises from eleven countries in the Middle East and North Africa (MENA) region, and controlling for other determinants of firm performance as well as the endogeneity of the registration decision using the Heckman selection model, the finding is that unregistered firms at start-up witness lower sales and productivity growth but higher employment growth rates. The effect of the registration decision on future performance thus depends on the performance indicator analysed. The theoretical implications are then discussed along with the limitations and future research required.
Transition to Formality and Structural Transformation Challenges and Policy options Edited by Iyanatul Islam & Frédéric Lapeyre, 2020
Integrated strategies are important because the transition to formality requires inclusive struct... more Integrated strategies are important because the transition to formality requires inclusive structural transformation. This is beyond the competence of individual enforcement authorities. A whole government approach is instead needed that would firstly, address the structural economic and social determinants of informality, secondly, join-up strategy and operations across labour, tax and social security laws and fully involve social partners, and thirdly, utilise the full range of available policy measures. In many countries, there is a fragmented and uncoordinated approach across the multifarious government bodies responsible for the transition to formality, limited integration of social partners, and an incomplete range of implemented policy measures. The result is lack of a joined-up, whole government approach. This chapter addresses these challenges and investigates the policy issues related to coordination and institution building required to develop an integrated strategy and promote structural transformation towards a transition to formality.
This paper provides one of the first known evaluations of whether enterprises in which women are ... more This paper provides one of the first known evaluations of whether enterprises in which women are owners underperform male-owned enterprises in the developing world. Until now, the widespread assumption, mostly from developed world studies, has been that enterprises in which women are owners underperform male-owned enterprises. To evaluate this in developing countries where there is a dearth of studies, cross-sectional data are reported from a 2007 World Bank enterprise survey of 937 South African enterprises. The finding is that enterprises that are women-owned or jointly owned by men and women perform better than those owned solely by men, after controlling for other determinants of firm performance as well as potential sample selection bias. The outcome is a call to transcend the underperformance thesis regarding women entrepreneurs and for greater resources to be devoted to the promotion of women's entrepreneurship and women's involvement in firm ownership.
This paper provides one of the first known evaluations of whether enterprises in which women are ... more This paper provides one of the first known evaluations of whether enterprises in which women are owners underperform male-owned enterprises in the developing world. Until now, the widespread assumption, mostly from developed world studies, has been that enterprises in which women are owners underperform male-owned enterprises. To evaluate this in developing countries where there is a dearth of studies, cross-sectional data is reported from a 2007 World Bank Enterprise Survey (WBES) of 937 South African enterprises. The finding is that enterprises that are women-owned or jointly owned by men and women perform better than those owned solely by men, after controlling for other determinants of firm performance as well as potential sample selection bias. The outcome is a call to transcend the underperformance thesis regarding women entrepreneurs and for greater resources to be devoted to the promotion of women's entrepreneurship and women's involvement in firm ownership.
The aim of this paper is to contribute to an understanding of the entrepreneurship process in Afr... more The aim of this paper is to contribute to an understanding of the entrepreneurship process in Africa by evaluating the link between starting up unregistered and future firm performance. The widespread assumption has been that firms starting up unregistered in the informal economy suffer from poor performance compared to those starting up registered and in the formal economy. To test this poorer performance thesis, World Bank Enterprise Survey (WBES) data is evaluated from across 41 African countries covering the period from 2006 to 2013. Controlling for a comprehensive set of other determinants of firm performance, the finding is that formal enterprises with five or more employees that started up unregistered have significantly higher annual sales, employment and productivity growth rates compared with those firms that registered their operations at startup. The paper concludes by discussing the theoretical and policy implications of this finding.
This paper aims to evaluate critically the rival representations of the role of the informal econ... more This paper aims to evaluate critically the rival representations of the role of the informal economy which is variously portrayed as a leftover from an earlier mode of production, a direct by-product of late capitalism, an alternative to the formal economy or a complement to formal work. Reporting evidence from a survey of 500 participants in Gambia, the finding is that although each and every representation of its role is valid in relation to particular populations and/or specific types of informal work, no one representation fully captures the diverse and multiple roles played by the informal economy in contemporary Sub-Saharan Africa. The consequent argument is that only by using all of them can a finer-grained and more comprehensive understanding of the multifarious roles of the informal economy be achieved. The outcome is a more multilayered and nuanced understanding of the role played by the informal economy in contemporary Sub-Saharan Africa.
Over the past decade or so, there has been widespread recognition that a large and growing propor... more Over the past decade or so, there has been widespread recognition that a large and growing proportion of the global workforce is employed in informal sector enterprises. To explain this, neo-liberals contend that enterprises operate in the informal sector due to high taxes, public sector corruption and too much state interference in the free market and that the remedy is therefore to reduce taxes, public sector corruption and the regulatory burden via minimal state intervention. To evaluate critically this neo-liberal policy approach, this paper explores whether cross-national variations in the share of the workforce in informal sector enterprises are associated with cross-national variations in the level of tax rates, corruption and state interference. To do this, International Labour Organisation data on the share of the workforce in informal sector enterprises in 43 developing and transition economies is compared with cross-national variations in tax rates, corruption and levels of state intervention using World Bank development indicators. The finding is that there is little or no evidence to support the neo-liberal policy approach that decreasing tax rates, public sector corruption and the regulatory burden via minimal state intervention, reduces the share of the workforce in informal sector enterprises. Instead, higher tax rates and levels of regulation and state intervention are found to be associated with lower (not higher) levels of employment in informal sector enterprise. The paper concludes by discussing the theoretical and policy implications.
The varieties of capitalism and employment relations literature have largely focused on formally ... more The varieties of capitalism and employment relations literature have largely focused on formally regulated market economies, with a general neglect of the informal economy and of emerging markets where this work arrangement is dominant. In this article, however, the intention is to propose the Informally Dominated Market Economy as a form of capitalism that could be usefully incorporated into the industrial relations literature. To start to unpack this variety of capitalism, this article explores institutions and employment relations practices in the African economy of Mozambique. The outcome is a conceptual framework that includes both formal and informal institutions and considers the implications for work and employment relations.
This paper aims to evaluate critically the rival representations of the role of the informal econ... more This paper aims to evaluate critically the rival representations of the role of the informal economy which is variously portrayed as a leftover from an earlier mode of production, a direct by-product of late capitalism, an alternative to the formal economy or a complement to formal work. Reporting evidence from a survey of 500 participants in Gambia, the finding is that although each and every representation of its role is valid in relation to particular populations and/or specific types of informal work, no one representation fully captures the diverse and multiple roles played by the informal economy in contemporary Sub-Saharan Africa. The consequent argument is that only by using all of them can a finer-grained and more comprehensive understanding of the multifarious roles of the informal economy be achieved. The outcome is a more multilayered and nuanced understanding of the role played by the informal economy in contemporary Sub-Saharan Africa.
This paper aims to evaluate critically the rival representations of the role of the informal econ... more This paper aims to evaluate critically the rival representations of the role of the informal economy which is variously portrayed as a leftover from an earlier mode of production, a direct by-product of late capitalism, an alternative to the formal economy or a complement to formal work. Reporting evidence from a survey of 500 participants in the Gambia, the finding is that although each and every representation of its role is valid in relation to particular populations and/or specific types of informal work, no one representation fully captures the diverse and multiple roles played by the informal economy in contemporary Sub-Saharan Africa. The consequent argument is that only by using all of them can a finer-grained and more comprehensive understanding of the multifarious roles of the informal economy be achieved. The outcome is a more multilayered and nuanced understanding of the role played by the informal economy in contemporary Sub-Saharan Africa.
This paper re-evaluates the explanations for informal work in third world cities. Until now, info... more This paper re-evaluates the explanations for informal work in third world cities. Until now, informal work has been theorized either as a residue (modernisation), by-product of contemporary capitalism conducted out of economic necessity (structuralism) or an alternative to formal work chosen due to either an over-burdensome state (neo-liberalism) or for social, redistributive, resistance or identity reasons (post-structuralism). Reporting a study of 80 households in Koforidua in Ghana, this paper finds that although its depiction as a residue is not valid, the other representations of the informal economy are each valid in relation to different types of informal work and varying populations in this third world city, and that only by combining them will a finer-grained and more comprehensive understanding of the diverse nature of the informal economy be achieved. The outcome is a call for more nuanced explanations of the informal economy in other contexts.
Purpose – This paper aims to evaluate critically the meta-narrative that there is no alternative ... more Purpose – This paper aims to evaluate critically the meta-narrative that there is no alternative to capitalism. Building upon an emerging body of post-structuralist thought that has begun deconstructing this discourse in relation to western economies and post-Soviet societies, this paper further extends this critique to Sub-Saharan Africa by investigating the degree to which people in the Gambia rely on the capitalist market economy for their livelihood. Reporting the results of 80 household face-to-face interviews (involving over 500 people), the finding is that only a small minority of households in contemporary Gambian society rely on the formal market economy alone to secure their livelihood and that the vast majority depend on a plurality of market and non-market economic practices. The outcome is a call to rethink the lived practices of economic transition in Sub-Saharan Africa in general and the Gambia in particular, so as to open up the feasibility of, and possibilities for, alternative economic futures beyond capitalist hegemony.
Is the informal economy a help or a hindrance to expanding the opportunities of the poor? Convent... more Is the informal economy a help or a hindrance to expanding the opportunities of the poor? Conventionally, it has been deemed a hindrance; an unproductive sphere that is deleterious to wider economic development and growth. Recently, however, a more positive depiction has emerged viewing it as a useful means of expanding the opportunities of the poor. This report reviews the arguments and evidence for viewing it more positively and how it might be harnessed in order to help expand the opportunities of the poor.
Purpose -This paper aims to evaluate critically the meta-narrative that there is no alternative t... more Purpose -This paper aims to evaluate critically the meta-narrative that there is no alternative to capitalism. Building upon an emerging body of post-structuralist thought that has begun deconstructing this discourse in relation to western economies and post-Soviet societies, this paper further extends this critique to Sub-Saharan Africa by investigating the degree to which people in the Gambia rely on the capitalist market economy for their livelihood. Reporting the results of 80 household face-to-face interviews (involving over 500 people), the finding is that only a small minority of households in contemporary Gambian society rely on the formal market economy alone to secure their livelihood and that the vast majority depend on a plurality of market and non-market economic practices. The outcome is a call to re-think the lived practices of economic transition in Sub-Saharan Africa in general and the Gambia in particular, so as to open up the feasibility of, and possibilities for, alternative economic futures beyond capitalist hegemony.
In recent years, there has been growing recognition in the entrepreneurship literature that many ... more In recent years, there has been growing recognition in the entrepreneurship literature that many entrepreneurs operate in the informal economy and that not all these informal entrepreneurs are doing so out of economic necessity and because of a lack of choice. Instead, it has been asserted that some of these informal entrepreneurs choose to exit the formal economy and trade on an off-the-books basis more as a matter of choice.
Abstract This paper re-evaluates the explanations for informal work in third world cities. Until ... more Abstract This paper re-evaluates the explanations for informal work in third world cities. Until now, informal work has been theorized either as a residue (modernisation), by-product of contemporary capitalism conducted out of economic necessity (structuralism) or an alternative to formal work chosen due to either an over-burdensome state (neo-liberalism) or for social, redistributive, resistance or identity reasons (post-structuralism).
The varieties of capitalism and employment relations literature have largely focused on formally ... more The varieties of capitalism and employment relations literature have largely focused on formally regulated market economies, with a general neglect of the informal economy and of emerging markets where this work arrangement is dominant. In this article, however, the intention is to propose the Informally Dominated Market Economy as a form of capitalism that could be usefully incorporated into the industrial relations literature.
This paper aims to evaluate critically the rival representations of the role of the informal econ... more This paper aims to evaluate critically the rival representations of the role of the informal economy which is variously portrayed as a leftover from an earlier mode of production, a direct by-product of late capitalism, an alternative to the formal economy or a complement to formal work. Reporting evidence from a survey of 500 participants in Gambia, the finding is that although each and every representation of its role is valid in relation to particular populations and/or specific types of informal work, no one representation fully captures the diverse and multiple roles played by the informal economy in contemporary Sub-Saharan Africa. The consequent argument is that only by using all of them can a finer-grained and more comprehensive understanding of the multifarious roles of the informal economy be achieved. The outcome is a more multilayered and nuanced understanding of the role played by the informal economy in contemporary Sub-Saharan Africa.
As a result of the ILO South-South and Triangular Cooperation knowledge-sharing project on an Int... more As a result of the ILO South-South and Triangular Cooperation knowledge-sharing project on an Integrated Approach Towards Formalization in Tajikistan, Kyrgyzstan, Azerbaijan and Uzbekistan, the report sets out road maps for the four countries to make progress towards an integrated strategic approach to facilitate the transition to formality. The study includes an assessment of the informal economy in each country and proposes a whole government coordinated approach to formalize the informal economy, highlighting South-South and Triangular Cooperation as an instrumental tool to accomplish this objective.
The aim of this paper is to evaluate the impacts on future firm performance of a firm deciding to... more The aim of this paper is to evaluate the impacts on future firm performance of a firm deciding to register from the outset of its operations. Until now, the assumption has been that starting up registered is linked to higher future firm performance. Reporting World Bank Enterprise Survey (WBES) data collected in 2014 on 9,281 formal enterprises in India, and controlling for other determinants of firm performance as well as the endogeneity of the registration decision, the finding is that formal enterprises that start up unregistered and spend longer unregistered have significantly higher subsequent annual sales and employment growth rates compared with those registered from the outset. When the number of years spent unregistered is included, there are also productivity gains from delaying registration. The tentative explanation is that in this weak institutional environment, the advantages of registering from the outset are outweighed by the benefits of deferring registration. Evaluating the policy implications, the argument is that there is a need to shift away from the conventional eradication approach toward unregistered startups based on the assumption they are unproductive, and toward a more facilitating approach that improves the benefits of being registered and tackles the systemic formal institutional deficiencies that lead entrepreneurs to delay their decision to register.
Until now, studies of the Do-It-Yourself (DIY) market have been confined to advanced market econo... more Until now, studies of the Do-It-Yourself (DIY) market have been confined to advanced market economies, with developing countries ignored. This article begins to bridge this gap. Analysing a survey of 500 households in India, a developing country characterized by cheap and surplus labour, and a different cultural milieu, this article investigates whether it is possible to distinguish DIY consumers in the same manner as in Western nations as 'reluctant' or 'willing' DIYers. The analysis finds that in India, DIY consumers can be concurrently both willing DIYers doing so for pleasure (the choice model) or seeking selfidentity from the end-product (post-modern theory) and at the same time reluctant DIYers doing so out of economic necessity reasons (economic determinism model) or due to the lack of appropriately skilled labour (a market failure model). Results also reflected cultural connotations to the respondent perceptions. The multiplicity of reasons, in consequence, shows that no one theorisation of DIY consumers' motives is universally relevant but all theories are sometimes valid. As such, a new typology of DIY consumers' motives has been inductively generated which is theoretically integrative. The results conclude on the need to move beyond using one theory and treating the others as rival competing theories, for a comprehensive explanation of DIY.
International Journal of Entrepreneurship and Small Business, 2013
The starting point of this paper is the recognition that the entrepreneurship literature is domin... more The starting point of this paper is the recognition that the entrepreneurship literature is dominated by a normative ideologically-driven depiction of the entrepreneur as a heroic icon and symbolic figurehead of capitalist culture. The aim of this paper is to directly and intentionally challenge this dominant depiction by reporting the findings of a 2010 survey of 871 street entrepreneurs in the Indian city of Bangalore to reveal not only how street hawkers are as much engaged in entrepreneurial endeavour as the revered heroic figures normally associated with entrepreneurship, but also how this is not a weak, necessity-driven, transient and disappearing form of entrepreneurship, but resilient, opportunity-driven and persistent. The outcome is a call to transcend the ideal-type depiction of entrepreneurs as heroic iconic figures and for a more lived practice approach that recognises and values the prevalence of other (and 'othered') forms of entrepreneurship across the globe.
International Journal of Gender and Entrepreneurship, 2011
Purpose
– Studies on women entrepreneurs either view women through a structuralist lens, asmarg... more Purpose
– Studies on women entrepreneurs either view women through a structuralist lens, asmarginalised populations engaged in low-quality work, or through a neo-liberal lens, as engaged inrelatively higher quality endeavour more as a rational choice. The aim of this paper is to evaluatecritically these explanations in relation to women entrepreneurs in the informal sector in India.
Design/methodology/approach
– To evaluate the contrasting explanations of structuralist andnew liberal approaches, questionnaire surveys were conducted in two phases, namely 2007 and 2010,over a period of several months. The sample design was stratified random and the sample was takenfrom a range of cities in different parts of India.
Findings
– The survey of 457 women entrepreneurs of the informal sector shows that although thestructuralist representation islargely appropriate for women working aswaged informal employees, itis not as valid for women informal entrepreneurs working on a self-employed basis. The resultschallenge the traditional understanding of the informal sector, and self-employed women in particular,and are discussed in the light of the institutional rational choice framework.
Research limitations/implications
– The analysis highlights how the decision of entrepreneurship does not stand in isolation from other decisions and choices, is in line withnormative considerations, and is a collective rational choice for women entrepreneurs in the informalsector. This analysis is a first of its kind and calls for additional surveys to be undertaken of female(and male) informal entrepreneurs in other countries to establish this concept.
Originality/value
– The analysis critically evaluates established explanations in relation to womenentrepreneurs in the informal sector through an empirical survey and establishes new explanations onwomen entrepreneurship
Purpose – Studies on women entrepreneurs either view women through a structuralist lens, as margi... more Purpose – Studies on women entrepreneurs either view women through a structuralist lens, as marginalised populations engaged in low-quality work, or through a neo-liberal lens, as engaged in relatively higher quality endeavour more as a rational choice. The aim of this paper is to evaluate
critically these explanations in relation to women entrepreneurs in the informal sector in India.
Design/methodology/approach – To evaluate the contrasting explanations of structuralist and new liberal approaches, questionnaire surveys were conducted in two phases, namely 2007 and 2010,over a period of several months. The sample design was stratified random and the sample was taken
from a range of cities in different parts of India.
Findings – The survey of 457 women entrepreneurs of the informal sector shows that although the structuralist representation is largely appropriate for women working as waged informal employees, it is not as valid for women informal entrepreneurs working on a self-employed basis. The results challenge the traditional understanding of the informal sector, and self-employed women in particular, and are discussed in the light of the institutional rational choice framework.
Research limitations/implications – The analysis highlights how the decision of entrepreneurship does not stand in isolation from other decisions and choices, is in line with
normative considerations, and is a collective rational choice for women entrepreneurs in the informal sector. This analysis is a first of its kind and calls for additional surveys to be undertaken of female (and male) informal entrepreneurs in other countries to establish this concept.
Originality/value – The analysis critically evaluates established explanations in relation to women
entrepreneurs in the inform
This paper critically evaluates the popular structuralist representation of informal workers as m... more This paper critically evaluates the popular structuralist representation of informal workers as marginalized populations who work as dependent employees out of economic necessity and as a last resort. Reporting on an empirical survey of 1,518 informal workers in India, itreveals not only that a large proportion work on their own account as informal entrepreneurs, but also that not all do such work purely out of economic necessity and in the absence of alternative means of livelihood. The paper concludes by calling for a wider recognition of the opportunity-driven entrepreneurial endeavour of many working in the informal sector.
Studies on women entrepreneurs in the informal economy no longer view them merely as a residue fr... more Studies on women entrepreneurs in the informal economy no longer view them merely as a residue from some pre-modern mode of production that is disappearing. Instead, they are either read through a structuralist lens as marginalized populations engaged in low quality work conducted under poor conditions for low pay out of necessity in the absence of alternative means of livelihood, or through a neo-liberal lens as engaged in relatively higher quality endeavours more as a rational choice. The aim
of this paper is to evaluAte critically these contrasting Explanations. To do this, the results of face-toface interviews with 323 women entrepreneurs operating in the Indian informal economy are analyzed. The finding is that although the structuralist representation is largely appropriate for women engaged in informal waged work, it is not as valid for women informal entrepreneurs working on a selfemployed basis where incomes are higher, they receive more credit from informal institutions, union membership is higher, and such work is more likely to be a rational choice. The outcome is a call to
recognize the diversity of women’s experiences in the informal sector and that not all informal entrepreneurship by women in developing nations is a low-paid, necessity-oriented endeavour carried out as a last resort.
Abstract-Studies on women entrepreneurs in the informal economy no longer view them as a residue ... more Abstract-Studies on women entrepreneurs in the informal economy no longer view them as a residue of a pre-modern regime that is disappearing. Instead, they are either read through a structuralist lens as marginalised populations engaged in low quality work or through a neo-liberal lens as engaged in relatively higher quality endeavour more as a rational choice. The aim of this paper is to evaluate critically these contrasting explanations. To do this, the results of face-to-face interviews with 323 women entrepreneurs operating in the
Abstract Participation in street entrepreneurship has been variously explained as either a residu... more Abstract Participation in street entrepreneurship has been variously explained as either a residue from a pre-modern era (modernisation theory), a necessity-driven endeavour and last resort (structuralist theory), a rational economic choice (neo-liberal theory) or conducted for social or lifestyle reasons (post-modern theory). To evaluate critically these competing explanations, face-to-face interviews are reported with women street entrepreneurs in India during 2006 and 2007.
Abstract Conventionally, street entrepreneurs were either seen as a residue from a pre-modern era... more Abstract Conventionally, street entrepreneurs were either seen as a residue from a pre-modern era that is gradually disappearing (modernisation theory), or an endeavour into which marginalised populations are driven out of necessity in the absence of alternative ways of securing a livelihood (structuralist theory). In recent years, however, participation in street entrepreneurship has been re-read either as a rational economic choice (neo-liberal theory) or as conducted for cultural reasons (post-modern theory).
Until now, studies of the Do-It-Yourself (DIY) market have been confined to advanced market econo... more Until now, studies of the Do-It-Yourself (DIY) market have been confined to advanced market economies, with developing countries ignored. This article begins to bridge this gap. Analysing a survey of 500 households in India, a developing country characterized by cheap and surplus labour, and a different cultural milieu, this article investigates whether it is possible to distinguish DIY consumers in the same manner as in Western nations as 'reluctant'or 'willing'DIYers.
The aim of this introductory article is to provide a critical overview of how informality has bee... more The aim of this introductory article is to provide a critical overview of how informality has been defined and measured, together with selected findings on its extent and character, and a summary of competing views regarding its role in contemporary economies and how it can be tackled. The outcome is a set of
conceptual frameworks for understanding both the burgeoning literature on infor-
mal employment and how each of the perspectives presented in this Special Issue contributes to the advancement of knowledge on this subject so as to set the scene for the articles that follow
The aim of this paper is to deepen understanding of the relationship between sustainable developm... more The aim of this paper is to deepen understanding of the relationship between sustainable development, localisation and the purchase of goods and services from the informal economy. This has not before been investigated. To do so, it reports a survey of 1,209 respondents conducted during October-December 2021 in Romania, a country with one of the largest informal economies in the European Union. The findings reveal a link between consumers' motives to purchase informal goods and services and the pursuit of sustainable development through localisation. The analysis shows that there is no purely sustainability-driven consumer in the informal economy, but this rationale is prevalent as one of several motives for a large proportion of consumers purchasing goods and services from the informal economy, who do so explicitly for the purposes of environmental protection and localisation. The implications for theorising and tackling the informal economy are then discussed.
Little attention has been paid to why consumers choose to purchase goods and services from the in... more Little attention has been paid to why consumers choose to purchase goods and services from the informal economy. Similarly, few studies have been conducted on consumer behaviour in relation to informal markets during the COVID-19 pandemic. The aim of the article is to evaluate, for the first time, whether the COVID-19 pandemic influenced consumer behaviour in relation to the informal economy. Qualitative evidence collected in Iași, Romania, is reported. The finding is that the most important motives for purchasing goods and services from the informal economy are related to social ends, such as supporting local businesses, maintaining relationships with others, and enhancing sustainable development. The novel finding of this research is that community exchange in the form of mutual aid and reciprocity is not activated only for friends, neighbours, kin or work colleagues but also for local businesses facing financial difficulties. The customers are displaying solidarity and empathy for their situation. As such, this article adds to previous findings indicating that the motivation of lower cost is not the universal rationale for purchasing from the informal economy as many consumers choose to make purchases from informal market driven by social rationales. The paper ends by discussing the policy implications of the findings.
Little attention has been paid to why consumers choose to purchase goods and services from the in... more Little attention has been paid to why consumers choose to purchase goods and services from the informal economy. Similarly, few studies have been conducted on consumer behaviour in relation to informal markets during the COVID-19 pandemic. The aim of the article is to evaluate, for the first time, whether the COVID-19 pandemic influenced consumer behaviour in relation to the informal economy. Qualitative evidence collected in Iași, Romania, is reported. The finding is that the most important motives for purchasing goods and services from the informal economy are related to social ends, such as supporting local businesses, maintaining relationships with others, and enhancing sustainable development. The novel finding of this research is that community exchange in the form of mutual aid and reciprocity is not activated only for friends, neighbours, kin or work colleagues but also for local businesses facing financial difficulties. The customers are displaying solidarity and empathy for their situation. As such, this article adds to previous findings indicating that the motivation of lower cost is not the universal rationale for purchasing from the informal economy as many consumers choose to make purchases from informal market driven by social rationales. The paper ends by discussing the policy implications of the findings.
Сравнительный обзор страновых обследований по вопросу комплексного подхода к формализации неформа... more Сравнительный обзор страновых обследований по вопросу комплексного подхода к формализации неформальной экономики в Центральной Азии As a result of the ILO South-South and Triangular Cooperation knowledge-sharing project on an Integrated Approach Towards Formalization in Tajikistan, Kyrgyzstan, Azerbaijan and Uzbekistan, the report sets out road maps for the four countries to make progress towards an integrated strategic approach to facilitate the transition to formality. The study includes an assessment of the informal economy in each country and proposes a whole government coordinated approach to formalize the informal economy, highlighting South-South and Triangular Cooperation as an instrumental tool to accomplish this objective.
International Journal of Environmental Research and Public Health, 2021
Confronted with a global pandemic, public healthcare systems are under pressure, making access to... more Confronted with a global pandemic, public healthcare systems are under pressure, making access to healthcare services difficult for patients. This provides fertile ground for using illegal practices such as informal payments to gain access. This paper aims to evaluate the use of informal payments by patients during the COVID-19 pandemic and the institutions that affect the prevalence of this practice. Various measurements of formal and informal institutions are here investigated, namely the acceptability of corruption, the level of trust, transparency, and performance of the healthcare system. To do so, a logistic regression of 10,859 interviews with patients conducted across 11 Central and Eastern Europe countries in October–December 2020 is employed. The finding is that there are large disparities between countries in the prevalence of informal payments, and that the practice is more likely to occur where there are poorer formal and informal institutions, namely higher acceptability of corruption, lower trust in authorities, lower perceived transparency in handling the COVID-19 pandemic, difficult access to, and poor quality of, healthcare services, and higher mortality rates due to the COVID-19 pandemic. These findings suggest that policy measures for tackling informal payments need to address the current state of the institutional environment.
Wage under-reporting (or under-declared employment) occurs when a formal employer pays a formal e... more Wage under-reporting (or under-declared employment) occurs when a formal employer pays a formal employee an official declared wage but also an additional undeclared (“envelope”) wage. Given that employers often give this undeclared part of the wage to the employee as cash in an envelope, the study of wage under-reporting is commonly referred to as the study of “envelope wage” practices. To tackle wage under-reporting, two contrasting policy approaches are available to governments and social partners. A “direct” controls approach ensures that the costs of engaging in wage under-reporting outweigh the benefits, either by increasing the penalties and risks of detection, or by improving the ease and benefits of full declaration. An “indirect” controls approach, meanwhile, asserts that wage under-reporting occurs when the norms, values and beliefs of employees and employers are not in symmetry with the laws and regulations. Here, therefore, policy measures seek to align the norms, values and beliefs of employees and employers with the laws and regulations. This is done either by changing norms, values and beliefs using education and awareness raising campaigns or by modernising formal institutions to improve trust in government. Here, the policy initiatives are identified for tackling each determinant of wage under-reporting by: (i) explaining why it is important to focus on the determinant and its potential impact on preventing envelope wages; (ii) reporting “best practices” in fighting this determinant of envelope wages in other countries and (iii) making preliminary suggestions what can be done in Latvia to address this issue in addition to initiatives already initiated.
To reduce undeclared earnings in the tourist accommodation sector, public sector workers are prov... more To reduce undeclared earnings in the tourist accommodation sector, public sector workers are provided with holiday vouchers which can only be spent in registered tourist accommodation.
The aim of this paper is to evaluate the effectiveness of two contrasting policy approaches in ta... more The aim of this paper is to evaluate the effectiveness of two contrasting policy approaches in tackling informal sector entrepreneurship. The dominant deterrence approach theorizes entrepreneurs as rational economic actors who operate in the informal sector when the benefits of doing so outweigh the costs. The resultant policy focus is upon deterring participation by increasing the costs of operating in the informal sector through increased penalties and probability of being caught. Recently, a more preventative approach has emerged theorizing entrepreneurs as social actors operating in the informal sector when there is a lack of vertical trust (in government) and horizontal trust (in others). The consequent policy focus is upon improving entrepreneurs' vertical trust (in the state) and horizontal trust (in each other). To evaluate these approaches, evidence is reported from a 2019 Eurobarometer survey in six East-Central European countries (Czechia, Estonia, Latvia, Lithuania, Poland and Slovakia). The finding is that participation in informal entrepreneurship is not significantly associated with the deterrent measures of raising the penalties and probability of being caught but is significantly associated with the preventative measures of improving vertical and horizontal trust. The implications for theory and policy are discussed.
The aim of this paper is to analyse financial gains as a motive for engaging in under-declared em... more The aim of this paper is to analyse financial gains as a motive for engaging in under-declared employment (choosing envelope wages) amongst youth population. A youth profile of those more likely to choose envelope wages for financial gains is proposed, based on socio-demographic characteristics. Reporting on a survey amongst 1,059 students and employing logistic regression analysis, the finding is that unmarried undergraduate students with a difficult financial situation are more likely to choose envelope wages for a higher cash-in-hand income. Various theoretical explanations and motivations for engaging in such noncompliant behaviour are then explored to test their validity for the youth population. Previous personal behaviour, tax morality, peers' behaviour (social norm) as well as trust in public authorities enforcing compliance with labour law are found to be associated with the propensity to choose envelope wages for financial gains. The implications of these findings are discussed in the concluding section.
Around the globe, and especially in transition economies, a non-negligible number of companies re... more Around the globe, and especially in transition economies, a non-negligible number of companies reduce their tax and social contribution payments by using so-called “envelope wage” arrangements. However, tackling this particular form of undeclared work is highly challenging considering that both the employer and the employee are officially registered (even if only for a part of the real transactions) and apparently compliant, posing difficulties for the enforcement bodies to detect the under-reported part of the wages. The aim of this policy brief is to investigate the factors influencing participation in envelope wage arrangements and to explore the policy measures more prone to producing effective results in tackling this form of undeclared work.
In recent years, recognition that bogus self-employment is rapidly growing, not least because of ... more In recent years, recognition that bogus self-employment is rapidly growing, not least because of the advent of what has been called the 'gig,' 'sharing' or 'collaborative' economy, has led governments to search for ways to tackle this form of dependent self-employment that is widely viewed as diminishing the quality of working conditions. Until now, however, there have been few ex-post evaluations of policy initiatives that seek to tackle this phenomenon. Therefore, the aim of this paper is to provide one of the first ex-post evaluations by examining the outcomes of a 2016 legislative initiative in Romania to tackle bogus self-employment. Reporting both descriptive statistics and OLS regression analysis on monthly official data from August 2014 to August 2016, the finding is that while other business types and waged employment rates followed a similar trend to the years before the introduction of the new legislation, the number of self-employed started a negative trend after the new legislation was announced. After controlling for other indicators related to the economy (i.e. GDP) and labor market (i.e. employees, other companies, vacancy rates), the impact of the new legislation on the self-employed remains negative, offering reasonable grounds for assuming bogus self-employed was lowered by the new legislation. The paper concludes by discussing the wider implications of these findings.
Purpose – Recently, a small but burgeoning literature has argued that tax non-compliance cannot b... more Purpose – Recently, a small but burgeoning literature has argued that tax non-compliance cannot be fully explained using the conventional rational economic actor approach which views non-compliance as occurring when the pay-off is greater than the expected cost of being caught and punished. Instead, a social actor approach has emerged which views tax non-compliance as higher when “tax morale”, defined as the intrinsic motivation to pay taxes, is low. To advance this social actor model, the purpose of this paper is to evaluate the individual and national heterogeneity in tax morale, which is crucial if tax compliance is to be improved.
Design/methodology/approach – To do this, the authors report data from the 2010 Life in Transition Survey on tax morale in 35 Eurasian countries.
Findings – Logit econometric analysis reveals, on the one hand, that there is higher tax morale among middle-aged, married, homeowners with children, with a university degree and employed, and on the other hand, that there is higher tax morale in more developed countries with stronger legal systems and less corruption, and higher levels of state intervention in the form of both taxation and expenditure.
Research limitations/implications – Rather than continue with the rational actor approach, this paper reveals that how an emergent social actor approach can help to more fully explain tax non-compliance and results in a different policy approach focused upon changing country-level economic and social conditions associated with low tax morale and thus non-compliance.
Practical implications – These results display the specific populations with low tax morale which need targeting when seeking to tackle tax non-compliance.
Originality/value – This paper provides a new way of explaining and tackling tax non-compliance in Eurasian countries.
To explain participation in the undeclared economy, the conventional
supply-side approach evaluat... more To explain participation in the undeclared economy, the conventional supply-side approach evaluates the reasons people work in this sphere. This article, for the first time in Central and Eastern Europe, explains the undeclared economy using a demand-side approach which evaluates citizens’ motives for purchasing undeclared goods and services. Here, three potential explanations for purchasing undeclared goods and services, grounded in rational economic actor, social actor and institutional imperfections theoretical perspectives, are evaluated. Reporting data from 11,131 face-to-face interviews conducted in 11 Central and Eastern European countries in 2013, the main finding is that all three explanations are used by consumers, demonstrating the need for a synthesis of these approaches. A multinomial regression analysis identifies the specific groups variously using the undeclared economy to obtain a lower price, for social or redistributive rationales, or due to formal institutional imperfections. The implications for theorising and tackling the undeclared economy are then explored.
The aim of this paper is to evaluate the individual- and country-level variations in unregistered... more The aim of this paper is to evaluate the individual- and country-level variations in unregistered employment. To analyse whether it is marginalised groups who are more likely to engage in unregistered employment and explain the country-level variations, a 2010 Life in Transition Survey (LiTS) involving 38,864 interviews in 35 Eurasian countries is reported. Multilevel logistic regression analysis reveals that younger age groups, the divorced, and those with fewer years in education, are more likely to be unregistered employed. On a country- level, meanwhile, the prevalence of unregistered employment is strongly associated with tax morale; the greater the asymmetry between informal and formal institutions, the greater is the prevalence of unregistered employment. It is also higher when GDP per capita as well as social distribution and state intervention (subsidies and transfers, social contribution expenditure, health expenditure) are lower. The paper concludes by discussing the theoretical and policy implications.
To tackle participation in the informal sector, an emergent literature has called for the dominan... more To tackle participation in the informal sector, an emergent literature has called for the dominant deterrence approach, which increases the penalties and risks of detection, to be replaced and/or complemented by a tax morale approach that fosters citizens' commitment to compliance. Applying logistic regression analysis to the results of a Eurobarometer survey of 11 East-Central European countries reveals that, although both approaches reduce the likelihood of participation in the informal sector, deterrence measures reduce participation only when tax morale is low and have little impact when tax morale is high. The paper then discusses the policy implications of these findings.
The aim of this paper is to evaluate which consumers in Central and
Eastern Europe are more likel... more The aim of this paper is to evaluate which consumers in Central and Eastern Europe are more likely to acquire goods and services from the informal economy and to unravel their multifarious motives for doing so. Analysing 11,131 face-to-face structured interviews conducted in 11 Central and Eastern European (CEE) countries in 2013, a logit regression analysis reveals that some groups purchase from the informal economy to obtain a lower price, others for social or redistributive rationales, and yet others due to the failures of the formal economy in terms of the availability, speed and quality of provision. The implications for theorizing and tackling the informal economy are then explored.
This article evaluates critically the neoliberal perspective that employment in the informal econ... more This article evaluates critically the neoliberal perspective that employment in the informal economy is a product of high taxes, public sector corruption and state interference in the free market and that reducing taxes, corruption and the regulatory burden via minimal state intervention is the remedy. Analysing the varying size of the informal economy across 36 developing and transition countries, little or no association is found with higher tax rates, greater levels of corruption and state interference. Instead, employment in the informal economy appears to reduce with higher levels of regulation and state intervention. The theoretical and policy implications are discussed.
To tackle participation in the informal sector, an emergent literature has called for the dominan... more To tackle participation in the informal sector, an emergent literature has called for the dominant deterrence approach, which increases the penalties and risks of detection, to be replaced and/or complemented by a tax morale approach that fosters citizens' commitment to compliance. Applying logistic regression analysis to the results of a Eurobarometer survey of 11 East-Central European countries reveals that, although both approaches reduce the likelihood of participation in the informal sector, deterrence measures reduce participation only when tax morale is low and have little impact when tax morale is high. The paper then discusses the policy implications of these findings.
Recently, there has been growing
interest in the illegal wage practice
where formal employers pay... more Recently, there has been growing interest in the illegal wage practice where formal employers pay their formal employees two wages, namely an official declared wage plus an additional undeclared (envelope) wage, which reduces the tax and social contributions that are paid to the authorities. The aim of this paper is to evaluate the prevalence and nature of this illegal practice in Bulgaria and the effectiveness of different policy approaches for tackling this practice. Until now, two competing policy approaches have been advocated, namely a conventional rationaleconomic actor approach which seeks to increase the perceived or actual penalties and probability of being caught, and an emergent social actor approach that seeks to improve tax morale. Reporting a 2015 nationally representative survey comprising 2,004 face-to-face interviews conducted in Bulgaria, the finding is that just under 1 in 7 formal employees (14.4 per cent) reported receiving an additional undeclared (envelope) wage from their formal employer, with the mean amount of their net income unreported amounting to 29.8 per cent. Contrary to the widely-held assumption that this illegal wage practice is always purely the decision of employers, a key finding is that this is the case in less than two-thirds (65.3 per cent) of reported cases. Employees in some one-third of cases asserted that it was either a joint idea or that they had suggested this illegal arrangement. Adopting an evidence-based approach to evaluating how this should be tackled, a logit marginal effects regression analysis reveals little support for the rational economic actor approach that seeks to reduce falselydeclared salaries by increasing the penalties and probability of being caught, but strong support for the social actor approach that decreases instances of falsely-declared salaries by improving tax morale. The paper concludes by discussing implications for theory and policy.
To explain participation in the undeclared economy, the conventional
supply-side approach evaluat... more To explain participation in the undeclared economy, the conventional supply-side approach evaluates the reasons people work in this sphere. This article, for the first time in Central and Eastern Europe, explains the undeclared economy using a demand-side approach which evaluates citizens’ motives for purchasing undeclared goods and services. Here, three potential explanations for purchasing undeclared goods and services, grounded in rational economic actor, social actor and institutional imperfections theoretical perspectives, are evaluated. Reporting data from 11,131 face-to-face interviews conducted in 11 Central and Eastern European countries in 2013, the main finding is that all three explanations are used by consumers, demonstrating the need for a synthesis of these approaches. A multinomial regression analysis identifies the specific groups variously using the undeclared economy to obtain a lower price, for social or redistributive rationales, or due to formal institutional imperfections. The implications for theorising and tackling the undeclared economy are then explored.
Purpose – The purpose of this paper is to evaluate critically the meta-narrative that capitalism ... more Purpose – The purpose of this paper is to evaluate critically the meta-narrative that capitalism is becoming totalising and hegemonic. Grounded in an emerging corpus of post-development thought that has deconstructed this discourse in relation to western economies and the majority (third) world, the purpose of this paper is to further contribute to this burgeoning critique by analysing the degree to which capitalism has penetrated a post-socialist society, namely Ukraine. Design/methodology/approach – To analyse the penetration of capitalism, a survey is reported of the work practices of 600 households in a array of localities in Ukraine, conducted during 2005/2006 using face-to-face interviews. Findings – Analysing the practices used by households to secure their livelihoods, the finding is that capitalism is far from hegemonic. Even when the formal economy is relied on either as their most important or second most important source of livelihood, it is nearly always combined with some other economic activity. A diverse portfolio of work practices is thus the norm rather than the exception with over 90 per cent of households relying on sources other than the formal market sphere as either their most important or second most important source of livelihood. Practical implications – Displaying the shallow penetration of capitalism in this array of localities in Ukraine, this paper reveals the need for a re-representation of the realities of work in such post-socialist societies so as to open up the feasibility of, and possibilities for, alternative futures for work. Originality/value – This paper reports the first evaluation of the extent to which capitalism has penetrated work practices in post-socialist Ukraine.
Purpose – The purpose of this paper is to evaluate critically the meta-narrative that capitalism ... more Purpose – The purpose of this paper is to evaluate critically the meta-narrative that capitalism is becoming totalising and hegemonic. Grounded in an emerging corpus of post-development thought that has deconstructed this discourse in relation to western economies and the majority (third) world, the purpose of this paper is to further contribute to this burgeoning critique by analysing the degree to which capitalism has penetrated a post-socialist society, namely Ukraine. Design/methodology/approach – To analyse the penetration of capitalism, a survey is reported of the work practices of 600 households in a array of localities in Ukraine, conducted during 2005/2006 using face-to-face interviews. Findings – Analysing the practices used by households to secure their livelihoods, the finding is that capitalism is far from hegemonic. Even when the formal economy is relied on either as their most important or second most important source of livelihood, it is nearly always combined with some other economic activity. A diverse portfolio of work practices is thus the norm rather than the exception with over 90 per cent of households relying on sources other than the formal market sphere as either their most important or second most important source of livelihood. Practical implications – Displaying the shallow penetration of capitalism in this array of localities in Ukraine, this paper reveals the need for a re-representation of the realities of work in such post-socialist societies so as to open up the feasibility of, and possibilities for, alternative futures for work. Originality/value – This paper reports the first evaluation of the extent to which capitalism has penetrated work practices in post-socialist Ukraine.
What are the livelihood strategies pursued by people in the post-socialist societies of East-Cent... more What are the livelihood strategies pursued by people in the post-socialist societies of East-Central Europe? This paper critically evaluates the view that most of the population secures its livelihood through the formal economy and that only marginalized populations now have to rely on the informal economy (i.e. work beyond employment) for their livelihoods. Drawing upon extensive survey data from Ukraine, this paper reveals that only a small minority of households in this postsocialist society rely on the formal economy alone and that the vast majority depend on a plurality of both formal and informal economic practices to secure their livelihoods. The outcome is a call for a greater appreciation and recognition to be given to the role of the informal sector in post-socialist societies.
This article provides a critical evaluation of the competing discourses that variously represent ... more This article provides a critical evaluation of the competing discourses that variously represent the informal economy as a residue or leftover of some pre-capitalist era, a by-product of a new type of emergent formal economy, an alternative mode of work organization or a complement to the formal economy. Drawing upon evidence from a study of 600 households in Ukraine that unravels the heterogeneous forms of work in the informal economy, the finding is that although each and every representation is wholly valid in relation to specific types of informal work, no one articulation fully captures the diverse nature and multiple meanings of the informal economy. Here, in consequence, it is contended that only by using all of them will a finer-grained and more comprehensive understanding of the complex and multifarious character of the informal economy be achieved. To display how this can be achieved, a conceptual framework is then presented that couples together these contrasting representations in order to provide a more multi-layered and nuanced depiction of the informal economy, followed by a discussion of the implications for urban and regional development and policy of recognizing the multiple and diverse types of informal work.
Purpose – This paper aims to evaluate the use of personal connections to circumvent formal proced... more Purpose – This paper aims to evaluate the use of personal connections to circumvent formal procedures, known as blat in the Soviet era, in post-Soviet societies by studying its role in graduate employment recruitment. Design/methodology/approach – To do this, the extent to which and how blat is used by graduates to find a job in the city of Mykolayiv in Ukraine is analysed through 85 face-to-face structured interviews with those who in the past seven years have sought employment after graduating from university. Findings – The finding is that blat is widely used by graduates to find a job. However, contrary to the existing literature which suggests that blat has become commodified in post-Soviet market societies with monetary payment being requested by and given to personal connections " pulling strings " , no evidence is found that this is the case. Instead, this remains a non-monetised form of friendly help by and for close social relations, akin to the Soviet era, and is viewed in a positive or neutral manner by participants even though its consequences can be to circumvent meritocratic formal recruitment procedures and foster nepotism and cronyism. Research limitations/implications – This study of blat is limited to analysing graduate recruitment in one city in Ukraine. Broader empirical research on the contemporary role of blat in this and other spheres in post-Soviet societies and beyond is now required so as to develop a more nuanced context-bound understanding of both the positive and negative facets of this social practice in contemporary societies. Originality/value – This study reveals that blat is commonly used to find graduate jobs and is widely viewed as a socially acceptable practice, despite hindering meritocratic recruitment procedures.
This article reports a 2005–6 survey that displays the variety of
undeclared work in Ukraine, inv... more This article reports a 2005–6 survey that displays the variety of undeclared work in Ukraine, involving not only an array of ‘off-the-books’ employees but also various types of informal self-employment as well as forms of undeclared work more akin to mutual aid. Governments pursuing a conventional deterrent approach towards undeclared work may thus eradicate precisely the entrepreneurship and active citizenship that they otherwise seek to nurture. A more nuanced approach to tackling this sphere is proposed
To evaluate whether the illicit practice of using personal connections to
acquire goods and servi... more To evaluate whether the illicit practice of using personal connections to acquire goods and services, or to circumvent formal procedures, known as blat in the Soviet era, persists in the post-Soviet world, 200 face-to-face interviews conducted in the city of Mykolayiv in Ukraine are reported. The finding is that personal networks are still commonly and widely used. However, unlike Soviet era blat which was non-monetized friendly help, control over access to assets and possessing personal connections to those controlling access to assets, has become a commodity bought and sold for illicit monetary payments. The paper concludes by discussing how this corrupt practice might be tackled.
This article evaluates critically the meta-narrative that there is no alternative
to capitalism. ... more This article evaluates critically the meta-narrative that there is no alternative to capitalism. Building upon an emerging corpus of post-structuralist thought that has begun deconstructing this discourse in relation to western economies and the majority (third) world, this paper further extends this critique to Central and Eastern Europe by investigating the degree to which people in post-Soviet Ukraine rely on the capitalist market economy for their livelihood. Reporting the results of 600 face-to-face interviews, the finding is that only a small minority of households in this post-socialist society relies on the formal market economy alone to secure their livelihood and that the vast majority depend on a plurality of market and non-market economic practices. The outcome is a call to re-think the lived practice of economic transition in post-Soviet societies more widely in order to open up the feasibility of, and possibilities for, alternative economic futures beyond capitalist hegemony.
Purpose -The purpose of this paper is to evaluate critically the meta-narrative that capitalism i... more Purpose -The purpose of this paper is to evaluate critically the meta-narrative that capitalism is becoming totalising and hegemonic. Grounded in an emerging corpus of post-development thought that has deconstructed this discourse in relation to western economies and the majority (third) world, the purpose of this paper is to further contribute to this burgeoning critique by analysing the degree to which capitalism has penetrated a post-socialist society, namely Ukraine. Design/methodology/approach -To analyse the penetration of capitalism, a survey is reported of the work practices of 600 households in a array of localities in Ukraine, conducted during 2005/2006 using face-to-face interviews. Findings -Analysing the practices used by households to secure their livelihoods, the finding is that capitalism is far from hegemonic. Even when the formal economy is relied on either as their most important or second most important source of livelihood, it is nearly always combined with some other economic activity. A diverse portfolio of work practices is thus the norm rather than the exception with over 90 per cent of households relying on sources other than the formal market sphere as either their most important or second most important source of livelihood. Practical implications -Displaying the shallow penetration of capitalism in this array of localities in Ukraine, this paper reveals the need for a re-representation of the realities of work in such post-socialist societies so as to open up the feasibility of, and possibilities for, alternative futures for work. Originality/value -This paper reports the first evaluation of the extent to which capitalism has penetrated work practices in post-socialist Ukraine.
ABSTRACT Purpose ‐ This paper aims to evaluate the use of personal connections to circumvent form... more ABSTRACT Purpose ‐ This paper aims to evaluate the use of personal connections to circumvent formal procedures, known as blat in the Soviet era, in post-Soviet societies by studying its role in graduate employment recruitment. Design/methodology/approach ‐ To do this, the extent to which and how blat is used by graduates to find a job in the city of Mykolayiv in Ukraine is analysed through 85 face-to-face structured interviews with those who in the past seven years have sought employment after graduating from university. Findings ‐ The finding is that blat is widely used by graduates to find a job. However, contrary to the existing literature which suggests that blat has become commodified in post-Soviet market societies with monetary payment being requested by and given to personal connections "pulling strings", no evidence is found that this is the case. Instead, this remains a non-monetised form of friendly help by and for close social relations, akin to the Soviet era, and is viewed in a positive or neutral manner by participants even though its consequences can be to circumvent meritocratic formal recruitment procedures and foster nepotism and cronyism. Research limitations/implications ‐ This study of blat is limited to analysing graduate recruitment in one city in Ukraine. Broader empirical research on the contemporary role of blat in this and other spheres in post-Soviet societies and beyond is now required so as to develop a more nuanced context-bound understanding of both the positive and negative facets of this social practice in contemporary societies. Originality/value ‐ This study reveals that blat is commonly used to find graduate jobs and is widely viewed as a socially acceptable practice, despite hindering meritocratic recruitment procedures.
This paper contributes to a small but growing body of thought that has questioned the hegemony of... more This paper contributes to a small but growing body of thought that has questioned the hegemony of capitalism by revealing the persistence of multifarious economic practices in everyday community economies. To further advance this school of thought, first, a conceptual framework is developed to map the diverse economic practices used by communities and second, this is applied through a survey of 600 households in Ukraine. The outcome is to reveal that just as multifarious economic practices prevailed under state socialism, the same applies in societies in transition to capitalism, suggesting that there are alternative futures for community economies beyond market hegemony.
In recent years, there has been a growing realisation that beyond the realm of legitimate entrepr... more In recent years, there has been a growing realisation that beyond the realm of legitimate entrepreneurship is a large hidden enterprise culture composed of entrepreneurs conducting some or all of their trade off-the-books. Until now, however, few have evaluated how many entrepreneurs start-up their ventures trading off-the-books and why they do so. Reporting face-to-face interviews conducted in Ukraine during 2005-06 with 331 entrepreneurs, the finding is not only that the vast majority (90%) operate partially or wholly off-the-books but also that they are not all driven by necessity and as a last resort and survival strategy into entrepreneurship. Revealing how many are willing rather than reluctant entrepreneurs and that even those who initially are reluctant entrepreneurs and doing so out of necessity became more willing entrepreneurs over time as their business became established, the paper concludes by discussing the implications of these findings for both further research and public policy.
The Soviet Union’s collapse brought economic uncertainty to many Ukrainians. Approximately 20 per... more The Soviet Union’s collapse brought economic uncertainty to many Ukrainians. Approximately 20 percent of the population, 10 million people, currently survive on incomes below the state-set subsistence minimum figure. Given the unrealistic nature of this state-produced definition, “poverty” levels are in reality much higher. A distinctive feature of this marginalization is its longevity, as seventeen years since the dismantling of the command economy relatively few feel the benefits of marketization. As Burawoy (2001) noted, the very fact that few people have starved to death during this period indicates that other economic practices must be in operation to ensure households survive. Therefore, there is a need to explore how people (re)structure their everyday lives in response to economic marginalization. Revealing such practices demonstrates the multiplicity of forms that economic marginalization can take, the relationships between formal and informal economies, the exploitation of marginalized groups, new spaces of resistance, and the potential impact of state reforms.
Although there is an emerging literature qualitatively exploring the coping tactics developed as in response
to economic marginalization, there has been little qualitative examination of the role that domestically produced
food plays within this broad spectrum of practices. This article begins to fill this lacuna by exploring
the various roles that the dacha, a plot of rural land given to households during the Soviet period, plays in
everyday life. Key Words: coping tactics, domestic food production, economic marginalization, informal economies,
Ukraine.
"This paper contributes to a small but growing body of thought that has questioned the hegemony o... more "This paper contributes to a small but growing body of thought that has questioned the hegemony of capitalism by revealing the persistence of multifarious economic practices in everyday community economies. To further advance this school of thought, first, a conceptual framework is developed to map the diverse economic practices used by communities and second, this is applied through a survey of 600 households in Ukraine. The outcome is to reveal that just as multifarious economic practices prevailed under state
socialism, the same applies in societies in transition to capitalism, suggesting that there are alternative futures for community economies beyond market hegemony."
Drawing inspiration from a burgeoning corpus of scholars who have begun to question the narrative... more Drawing inspiration from a burgeoning corpus of scholars who have begun to question the narrative of impending market hegemony, this paper seeks to further advance this
emergent ‘diverse economies’ literature by constructing a conceptual framework for representing the multiple labour practices in economies. Transcending the simplistic
market/non-market dichotomy, this conceptualises multiple kinds of labour existing along a spectrum from market-oriented to non-market oriented practices, which is cross-cut by
another spectrum ranging from wholly monetised to wholly non-monetised practices. The resultant portrayal of a plurality of labour practices that seamlessly merge into each other
is then applied to understanding the types of labour used in Ukraine. Analysing the results of 600 interviews conducted across various populations reveals not only the shallow
permeation of the formal market economy in this society that has been supposedly undergoing a ‘transition’ to the market but also the existence of diverse work cultures across different populations along with marked socio-spatial variations in the nature of individual labour practices. The outcome is a call for a re-reading of the organisation of labour in Ukraine and the wider application of this conceptual lens that captures the proliferative nature of labour practices in economies.
International Journal of Urban and Regional Research, 2007
This article provides a critical evaluation of the competing discourses that variously
represent... more This article provides a critical evaluation of the competing discourses that variously
represent the informal economy as a residue or leftover of some pre-capitalist era, a
by-product of a new type of emergent formal economy, an alternative mode of work
organization or a complement to the formal economy. Drawing upon evidence from a
study of 600 households in Ukraine that unravels the heterogeneous forms of work in
the informal economy, the finding is that although each and every representation is
wholly valid in relation to specific types of informal work, no one articulation fully
captures the diverse nature and multiple meanings of the informal economy. Here, in
consequence, it is contended that only by using all of them will a finer-grained and more
comprehensive understanding of the complex and multifarious character of the informal
economy be achieved. To display how this can be achieved, a conceptual framework is
then presented that couples together these contrasting representations in order to
provide a more multi-layered and nuanced depiction of the informal economy, followed
by a discussion of the implications for urban and regional development and policy of
recognizing the multiple and diverse types of informal work
Int. J. Entrepreneurship and Small Business,, 2010
In recent years, there has been a growing realisation that beyond the realm of legitimate entrepr... more In recent years, there has been a growing realisation that beyond the realm of legitimate entrepreneurship is a large, hidden enterprise culture composed of entrepreneurs conducting some or all of their trade off-the-books. Until now, however, few have evaluated how many entrepreneurs start-up their ventures trading off-the-books and why they do so. Reporting face-to-face interviews conducted in Ukraine during 2005–2006 with 331 entrepreneurs, the finding is not only that the vast majority (90%) operate partially or wholly off-the-books, but also that they are not all driven by necessity, as a last resort and as a survival strategy into entrepreneurship. Revealing how many are willing rather than reluctant entrepreneurs; and that even those who were initially reluctant and ventured into it out of necessity, became more willing entrepreneurs over time as their business became established – the paper concludes by discussing the implications of these findings for both further research and public policy.
To evaluate the ‘marginalization thesis’ which asserts that marginalized
populations are more lik... more To evaluate the ‘marginalization thesis’ which asserts that marginalized populations are more likely to participate in undeclared work, we analyse a 2013 Eurobarometer survey of eight Baltic Sea countries, namely four Western countries (Denmark, Finland, Germany and Sweden) and four post-Soviet countries (Estonia, Latvia, Lithuania and Poland). Finding that across both the Western and post-Soviet Baltic Sea countries, some marginalized populations (e.g. those having difficulties paying household bills, younger people) are significantly more likely to participate in undeclared work, and others are not (e.g. women, those with a high level of tax morality), a more nuanced and variegated understanding of the marginalization thesis is developed that is valid across both Western and post-Soviet Baltic Sea countries. The paper concludes by discussing the theoretical and policy implications.
To evaluate the ‘marginalization thesis’ which asserts that marginalized
populations are more lik... more To evaluate the ‘marginalization thesis’ which asserts that marginalized populations are more likely to participate in undeclared work, we analyse a 2013 Eurobarometer survey of eight Baltic Sea countries, namely four Western countries (Denmark, Finland, Germany and Sweden) and four post-Soviet countries (Estonia, Latvia, Lithuania and Poland). Finding that across both the Western and post-Soviet Baltic Sea countries, some marginalized populations (e.g. those having difficulties paying household bills, younger people) are significantly more likely to participate in undeclared work, and others are not (e.g. women, those with a high level of tax morality), a more nuanced and variegated understanding of the marginalization thesis is developed that is valid across both Western and post-Soviet Baltic Sea countries. The paper concludes by discussing the theoretical and policy implications.
To explain the shadow economy in the Baltic states of Estonia, Lithuania and Latvia, this paper e... more To explain the shadow economy in the Baltic states of Estonia, Lithuania and Latvia, this paper evaluates the relationship between the shadow economy and tax morale. Viewing tax morale as a measure of the symmetry between the codified laws and regulations of formal institutions (state morality) and the unwritten socially shared rules of informal institutions (civic morality), the proposition is that the lower the tax morale (i.e., the greater the asymmetry between state morality and civic morality), the greater is the propensity to participate in the shadow economy. To evaluate this, a 2013 survey is reported involving 3,036 face-to-face interviews in these three Baltic nations. Using ordered logistic regression analysis, the finding is that the lower is the tax morale of individuals, population groups and countries, the greater is the propensity to participate in the shadow economy. The paper then explores the implications for theorising and tackling the shadow economy.
To explain the shadow economy in the Baltic states of Estonia, Lithuania and Latvia, this paper e... more To explain the shadow economy in the Baltic states of Estonia, Lithuania and Latvia, this paper evaluates the relationship between the shadow economy and tax morale. Viewing tax morale as a measure of the symmetry between the codified laws and regulations of formal institutions (state morality) and the unwritten socially shared rules of informal institutions (civic morality), the proposition is that the lower the tax morale (i.e., the greater the asymmetry between state morality and civic morality), the greater is the propensity to participate in the shadow economy. To evaluate this, a 2013 survey is reported involving 3,036 face-to-face interviews in these three Baltic nations. Using ordered logistic regression analysis, the finding is that the lower is the tax morale of individuals, population groups and countries, the greater is the propensity to participate in the shadow economy. The paper then explores the implications for theorising and tackling the shadow economy.
Purpose–The purpose of this paper is to evaluate in the Baltic Sea region the prevalence of an il... more Purpose–The purpose of this paper is to evaluate in the Baltic Sea region the prevalence of an illegitimate wage arrangement whereby formal employers pay their formal employees both an official declared wage as well as a supplementary undeclared (envelope) wage. Design/methodology/approach–A 2007 Eurobarometer survey is reported that evaluates envelope wage practices in 27 European Union (EU) member states.
Until now, participation in undeclared work has been explained through either a structuralist len... more Until now, participation in undeclared work has been explained through either a structuralist lens as driven by 'exclusion'from state benefits and the circuits of the modern economy or through a neo-liberal and/or post-structuralist lens as driven by the voluntary 'exit'of workers out of formal institutions and into this alternative realm.
To explain the shadow economy in the Baltic states of Estonia, Lithuania and Latvia, this paper e... more To explain the shadow economy in the Baltic states of Estonia, Lithuania and Latvia, this paper evaluates the relationship between the shadow economy and tax morale. Viewing tax morale as a measure of the symmetry between the codified laws and regulations of formal institutions (state morality) and the unwritten socially shared rules of informal institutions (civic morality), the proposition is that the lower the tax morale (i.e. the greater the asymmetry between state morality and civic morality), the greater is the likelihood to participate in the shadow economy. To evaluate this, a 2013 survey is reported involving 3036 face-to-face interviews in these 3 Baltic nations. Using logistic regression analysis, the finding is that the likelihood of participating in the shadow economy is greater, the lower is the tax morality of individuals, population groups and countries. In addition, the likelihood to participate in the shadow economy is found to significantly vary by, for example, gender, employment status and country, people living in Latvia and Lithuania displaying significantly lower likelihood to engage in the shadow economy. The paper then explores the implications for theorizing and tackling the shadow economy.
To evaluate the ‘marginalization thesis’ which asserts that marginalized
populations are more lik... more To evaluate the ‘marginalization thesis’ which asserts that marginalized populations are more likely to participate in undeclared work, we analyse a 2013 Eurobarometer survey of eight Baltic Sea countries, namely four Western countries (Denmark, Finland, Germany and Sweden) and four post-Soviet countries (Estonia, Latvia, Lithuania and Poland). Finding that across both the Western and post-Soviet Baltic Sea countries, some marginalized populations (e.g. those having difficulties paying household bills, younger people) are significantly more likely to participate in undeclared work, and others are not (e.g. women, those with a high level of tax morality), a more nuanced and variegated understanding of the marginalization thesis is developed that is valid across both Western and post-Soviet Baltic Sea countries. The paper concludes by discussing the theoretical and policy implications.
To explain the shadow economy in the Baltic states of Estonia, Lithuania and Latvia, this paper
e... more To explain the shadow economy in the Baltic states of Estonia, Lithuania and Latvia, this paper evaluates the relationship between the shadow economy and tax morale. Viewing tax morale as a measure of the symmetry between the codified laws and regulations of formal institutions (state morality) and the unwritten socially shared rules of informal institutions (civic morality), the proposition is that the lower the tax morale (i.e. the greater the asymmetry between state morality and civic morality), the greater is the likelihood to participate in the shadow economy. To evaluate this, a 2013 survey is reported involving 3036 face-to-face interviews in these 3 Baltic nations. Using logistic regression analysis, the finding is that the likelihood of participating in the shadow economy is greater, the lower is the tax morality of individuals, population groups and countries. In addition, the likelihood to participate is shadow economy is found to significantly vary by, for example, gender, employment status and country, people living in Latvia and Lithuania displaying significantly lower likelihood to engage in the shadow economy. The paper then explores the implications for theorizing and tackling the shadow economy.
To explain the shadow economy in the Baltic states of Estonia, Lithuania and Latvia, this paper e... more To explain the shadow economy in the Baltic states of Estonia, Lithuania and Latvia, this paper evaluates the relationship between the shadow economy and tax morale. Viewing tax morale as a measure of the symmetry between the codified laws and regulations of formal institutions (state morality) and the unwritten socially shared rules of informal institutions (civic morality), the proposition is that the lower the tax morale (i.e., the greater the asymmetry between state morality and civic morality), the greater is the propensity to participate in the shadow economy. To evaluate this, a 2013 survey is reported involving 3,036 face-to-face interviews in these three Baltic nations. Using ordered logistic regression analysis, the finding is that the lower is the tax morale of individuals, population groups and countries, the greater is the propensity to participate in the shadow economy. The paper then explores the implications for theorising and tackling the shadow economy.
International Journal of Environmental Research and Public Health, 2021
Healthcare accessibility and equity remain important issues, as corruption in the form of informa... more Healthcare accessibility and equity remain important issues, as corruption in the form of informal payments is still prevalent in many countries across the world. This study employs a panel data analysis over the 2006-2013 period to explore the role of different institutional factors in explaining the prevalence of informal payments. Covering 117 countries, our findings confirm the significant role of both formal and informal institutions. Good governance, a higher trust among individuals, and a higher commitment to tackling corruption are associated with diminishing informal payments. In addition, higher shares of private finance, such as out-of-pocket and domestic private health expenditure, are also correlated with a lower prevalence of informal payments. In policy terms, this displays how correcting institutional imperfections may be among the most efficient ways to tackle informal payments in healthcare.
Purpose – Reflecting the moral theorisation of bribery as a negative phenomenon, bribery has been... more Purpose – Reflecting the moral theorisation of bribery as a negative phenomenon, bribery has been widely shown to have a deleterious impact at the national level on economic development and growth. The purpose of this paper is to evaluate whether it is also the case at the firm level that bribery has negative impacts on firm performance. Until now, the few studies conducted in individual nations and regions have produced mixed results. Here, therefore, a more comprehensive evaluation of the relationship between bribery and firm performance is undertaken across the developing world.
Design/methodology/approach – To do so, World Bank Enterprise Survey data on 106,805 enterprises across 132 developing countries is used to provide a firm-level analysis of the relationship between bribery and firm performance.
Findings – The finding is that bribery enhances firm performance. Firms asserting that it is necessary for enterprises like theirs to give gifts or payments to public officials in order to get things done have 13.9 per cent higher average annual sales growth rates and 48 per cent higher annual productivity growth rates, after controlling for other determinants of firm performance.
Practical implications – Given that engaging in bribery at the firm level results in higher firm performance, despite bribery having an overall detrimental negative impact at the country level, public authorities will need to develop measures to alter not only the cost-benefit ratio confronting individual enterprises but also the institutional deficiencies that result in the prevalence of bribery.
Originality/value – This is the first firm-level evaluation of the relationship between bribery and firm performance across the developing world.
The current evidence-base regarding the impacts of corruption on firm performance is based largel... more The current evidence-base regarding the impacts of corruption on firm performance is based largely on studies of individual countries and contains mixed results. Therefore, the aim of this paper is to achieve a better insight into this relationship by reporting the results of a firm-level analysis of the impacts of corruption on firm performance using World Bank Enterprise Survey (WBES) data across 40 African countries. The clear result is that corruption significantly enhances rather than harms annual sales, employment and productivity growth rates. The outcome is to re-theorize participation in acts of corruption as beneficial for the individual firms engaged in such activity, while recognizing the wider evidence that this is not an optimal strategy at the aggregate country level. The outcome will be to advance knowledge about how corruption needs to be tackled. To eliminate corruption, it is shown here to be necessary for public authorities to recognize that corruption is an efficient strategy at the firm level and to adopt measures to alter the cost/benefit ratio confronting individual enterprises, and at the same time, to address the country-level formal institutional deficiencies that characterize many developing countries and result in the prevalence of corruption.
Conventionally, corruption is viewed as deleterious to firm performance. Analysing World Bank Ent... more Conventionally, corruption is viewed as deleterious to firm performance. Analysing World Bank Enterprise Survey firm-level data across 132 countries and controlling for other firm performance determinants, this paper finds that paying corrupt public officials enhances firm performance. This is argued to be because developing economies are characterised by formal institutional imperfections (e.g., inefficient public administration and the weak rule of law). Making bribe payments compensates for these formal institutional imperfections. Examining the policy implications of this rational economic act for entrepreneurs, but which is deleterious at the aggregate country level for economic development and growth, the argument is that public authorities should shift away from increasing the costs of corruption by improving the risks of detection and penalties, and instead focus upon the formal institutional imperfections that lead to endemic corruption in the developing world.
The current evidence-base regarding the impacts of corruption on firm performance is based largel... more The current evidence-base regarding the impacts of corruption on firm performance is based largely on studies of individual countries and contains mixed results. Therefore, the aim of this paper is to achieve a better insight into this relationship by reporting the results of a firm-level analysis of the impacts of corruption on firm performance using World Bank Enterprise Survey (WBES) data across 40 African countries. The clear result is that corruption significantly enhances rather than harms annual sales, employment and productivity growth rates. The outcome is to re-theorize participation in acts of corruption as beneficial for the individual firms engaged in such activity, while recognizing the wider evidence that this is not an optimal strategy at the aggregate country level. The outcome will be to advance knowledge about how corruption needs to be tackled. To eliminate corruption, it is shown here to be necessary for public authorities to recognize that corruption is an efficient strategy at the firm level and to adopt measures to alter the cost/benefit ratio confronting individual enterprises, and at the same time, to address the country-level formal institutional deficiencies that characterize many developing countries and result in the prevalence of corruption.
Conventionally, corruption is viewed as deleterious to firm performance. Analysing World Bank Ent... more Conventionally, corruption is viewed as deleterious to firm performance. Analysing World Bank Enterprise Survey firm-level data across 132 countries and controlling for other firm performance determinants, this paper finds that paying corrupt public officials enhances firm performance. This is argued to be because developing economies are characterised by formal institutional imperfections (e.g., inefficient public administration and the weak rule of law). Making bribe payments compensates for these formal institutional imperfections. Examining the policy implications of this rational economic act for entrepreneurs, but which is deleterious at the aggregate country level for economic development and growth, the argument is that public authorities should shift away from increasing the costs of corruption by improving the risks of detection and penalties, and instead focus upon the formal institutional imperfections that lead to endemic corruption in the developing world.
Conventionally, corruption is viewed as deleterious to firm performance. Analysing World Bank Ent... more Conventionally, corruption is viewed as deleterious to firm performance. Analysing World Bank Enterprise Survey firm-level data across 132 countries and controlling for other firm performance determinants, this paper finds that paying corrupt public officials enhances firm performance. This is argued to be because developing economies are characterized by formal institutional imperfections (e.g., inefficient public administration and the weak rule of law). Making bribe payments compensates for these formal institutional imperfections. Examining the policy implications of this rational economic act for entrepreneurs, but which is deleterious at the aggregate country level for economic development and growth, the argument is that public authorities should shift away from increasing the costs of corruption by improving the risks of detection and penalties, and instead focus upon the formal institutional imperfections that lead to endemic corruption in the developing world.
Local Exchange Trading Schemes (LETS) are networks for exchanging goods and services using a loca... more Local Exchange Trading Schemes (LETS) are networks for exchanging goods and services using a local currency. They are seen by some as providing an 'alternative' way of negotiating changing and complex livelihoods. Current literature on LETS and work understands participation as a response to dissatisfaction around work and as a strategy for re-valuing work. In this paper we draw initially on new quantitative data to understand who engages in LETS work and find that trading is small-scale and limited to a particular group of people. The data also suggest that contrary to previous research exchanges on LETS sometimes transform and sometimes reinforce existing work relations. To illuminate these complexities we draw on in-depth interviews with Stroud and Brixton LETS members. First, we highlight the multiple ways in which their relations to work connect with their motivations for joining LETS. Second, we examine how these motivations are translated into practice by looking at how prices for LETS work are negotiated. This illustrates that the way power interweaves during these negotiations is multiple and dynamic. Finally, we suggest that for LETS trading to be more equal, the different capacities that people have to negotiate needs to be considered. LETS as an 'Alternative' form of Work This article explores how people become involved in Local Exchange Trading Schemes 1 (LETS) as part of an attempt to create 'alternative' work relations and examines the extent to which this is achieved. It uses the term 'alternative' to encapsulate how LETS are used both as a strategy for engaging in productive activity
Recently, the policy community has been paying particular attention to Local Exchange and Trading... more Recently, the policy community has been paying particular attention to Local Exchange and Trading Schemes (LETS) as potential bridges into work for the unemployed. Up until now, however, there has only been piecemeal evidence on whether LETS are effective in this regard. In this paper, therefore, the full results of the rst comprehensive evaluation of LETS are reported. In order to feed into the 'evidence-based policy-making' process, we evaluate whether LETS are effective rst, as bridges into employment, second, as bridges into self-employment and, third and nally, at building reciprocal exchange networks. Our nding is that although LETS provide an indirect bridge into employment by improving employability, they are most effective as seedbeds for the development of self-employed business ventures and as vehicles for facilitating exchange beyond employment. For LETS to become more effective bridges into work for a wider range of the unemployed, nevertheless, a number of barriers to participation need to be tackled. The paper concludes by outlining how this could be achieved.
Local Exchange and Trading Systems (LETS) are not new initiatives. Such systems have a long histo... more Local Exchange and Trading Systems (LETS) are not new initiatives. Such systems have a long history and have appeared in various forms at different points in time. Most of these "local currency systems" have emerged in low-income communities where money is scarce and where there are many unmet needs and wants. This New Initiatives section focuses on the current debate about the role that LETS can play-as a political challenge, as an empowerment strategy, or as a community or economic development initiative. On each of these issues there are wide ranging views about the potential of LETS. The articles in this section engage with these differing views, drawing on both practical experience of operating LETS and on research data. Colin Williams notes that, in the last few years, LETS have been seized on as a new tool for promoting community development. His paper reports on results of a national survey of the origins, objectives, growth, magnitude, character and impacts of LETS. A number of recommendations are made that would make LETS a more effective vehicle for community development. The piece by Martin Stott and fosephine Hodges argues that Williams' analysis is an optimistic interpretation of the role of LETS and cautions against unrealistic expectations. The final piece by Pete North, based on research carried out for the Joseph Rowntree Foundation, provides a further reflection on the contribution of LETS to urban regeneration. North feels that the debate about LETS has become too polarised and what is needed is a grounded analysis of the circumstances in which LETS might be an appropriate policy response and what LETS can reasonably be expected to achieve. North's paper explores the extent to which LETS is an appropriate tool to combat poverty, disempowerment, and feelings of dependency and alienation in areas of disadvantage and social exclusion.
Reflecting on findings from research conducted in the United Kingdom, we consider some implicatio... more Reflecting on findings from research conducted in the United Kingdom, we consider some implications for an understanding of economic geographies of the emergence of local currency systems (LCSs) within developed economies. LCSs are founded on the creation of local currencies and driven by localöbut contestedöcircuits of consumption, exchange, and production. In this paper we are concerned with three interrelated sets of issues: the intersections of social and material relations and practices in the construction of economic geographies; the possibilitiesöconstrained by these intersectionsöof creating alternative economic geographies; and the consequent possibilities of contributing to economic proliferation. We distinguish between three main forms of LCSö LETSystems, LETS schemes, and Time Dollarsödifferentiated along a range of institutional, orga- nisational, ethical, and moral dimensions. These LCSs reflect and illustrate the diversity of meanings, understandings, and intentions brought to bear upon economic geographies. The existenceöeven if only temporaryöof LCSs is testament to the (limited) possibilities of local economic self-determina- tion and organisation; but their material ineffectiveness, decline, and uneven geographical spread reflect their formative links with mainstream practices and social relations and their internal contra- dictions and barriers. These characteristics illustrate the vulnerabilities inherent in all economic geographies and not just in those that are locally constructed.
In this paper the aim is to evaluate critically the potential of local exchange and trading syste... more In this paper the aim is to evaluate critically the potential of local exchange and trading systems (LETS) as a new source of work and credit for the poor and unemployed. LETS are local associations whose members list their offers of and requests for goods and services in a directory and then exchange them priced in a local unit of currency. From the results of a national survey of LETS, it is found that LETS are growing rapidly and that a high proportion of the national membership are poor and unemployed. With use of a membership survey of Manchester LETS, it is then revealed that, although the poor and unemployed are capitalising on LETS to gain access to work and credit, it is utilised mainly by what can be called the 'disenfranchised middle class'. In this paper it is advocated that, for a wider cross-section of the poor and unemployed to become involved, changes are needed not only in the internal operating environment of LETS but also in the approach of the government towards benefit claimants working on such systems.
This paper evaluates Local Exchange and Trading Schemes (LETS) as a tool for community renewal. R... more This paper evaluates Local Exchange and Trading Schemes (LETS) as a tool for community renewal. Reporting the results of a comprehensive three-year evaluation of LETS that used both quantitative and qualitative methods, we reveal that although LETS are an effective vehicle for community renewal, many changes are required if these schemes are to bene t a wider range of people. We conclude by documenting these changes. KEY WORDS Community development; social exclusion; locally economic development; local currencies; United Kingdom
Recently, the policy community has been paying particular attention to Local Exchange and Trading... more Recently, the policy community has been paying particular attention to Local Exchange and Trading Schemes (LETS) as potential bridges into work for the unemployed. Up until now, however, there has only been piecemeal evidence on whether LETS are effective in this regard. In this paper, therefore, the full results of the first comprehensive evaluation of LETS are reported.
ABSTRACT A new form of barter economy is emerging in many industrial nations. People are exchangi... more ABSTRACT A new form of barter economy is emerging in many industrial nations. People are exchanging goods and services through Local Exchange and Trading Systems (LETS). These are local associations whose members list their offers of, and requests for, goods and services in a directory and then exchange them priced in a local unit of currency. Using a United Kingdom case study of Totnes LETS, this paper presents a preliminary appraisal of their economic, social equity and community-building objectives.
Abstract. In this paper the aim is to evaluate critically the potential of local exchange and tra... more Abstract. In this paper the aim is to evaluate critically the potential of local exchange and trading systems (LETS) as a new source of work and credit for the poor and unemployed. LETS are local associations whose members list their offers of and requests for goods and services in a directory and then exchange them priced in a local unit of currency. From the results of a national survey of LETS, it is found that LETS are growing rapidly and that a high proportion of the national membership are poor and unemployed.
Abstract. Reflecting on findings from research conducted in the United Kingdom, we consider some ... more Abstract. Reflecting on findings from research conducted in the United Kingdom, we consider some implications for an understanding of economic geographies of the emergence of local currency systems (LCSs) within developed economies. LCSs are founded on the creation of local currencies and driven by localöbut contestedöcircuits of consumption, exchange, and production.
This paper evaluates Local Exchange and Trading Schemes (LETS) as a tool for community renewal. R... more This paper evaluates Local Exchange and Trading Schemes (LETS) as a tool for community renewal. Reporting the results of a comprehensive three-year evaluation of LETS that used both quantitative and qualitative methods, we reveal that although LETS are an effective vehicle for community renewal, many changes are required if these schemes are to benefit a wider range of people. We conclude by documenting these changes.
Abstract The aim of this paper is to evaluate the extent to which local currencies are a new tool... more Abstract The aim of this paper is to evaluate the extent to which local currencies are a new tool for promoting community development through an examination of green dollar exchanges in New Zealand.
Abstract Local Exchange Trading Schemes (LETS) are networks for exchanging goods and services usi... more Abstract Local Exchange Trading Schemes (LETS) are networks for exchanging goods and services using a local currency. They are seen by some as providing analternative'way of negotiating changing and complex livelihoods. Current literature on LETS and work understands participation as a response to dissatisfaction around work and as a strategy for re-valuing work.
Continuously high unemployment rates and the ever present threat of reductions in spending on for... more Continuously high unemployment rates and the ever present threat of reductions in spending on formal sector welfare provision mean that supplementary responses to unemployment need to be sought. For some, the informal sector is a potentially valuable complementary means by which the unemployed can mitigate their circumstances (Gutmann 1977; Rosanvallon 1980; Sauvy 1984).
Through a critical review of economic base theory, this paper argues that the ability to prevent ... more Through a critical review of economic base theory, this paper argues that the ability to prevent income leaking out of an area is as important to rural development as the capacity to generate external income. The problem at present, however, is that few effective policy instruments exist to thwart such seepage. Here, therefore, an innovative approach to facilitate local purchasing amongst rural dwellers is evaluated: Local Exchange and Trading Systems (LETS).
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Each and every one of these domestic services can be conducted using various sources of labor. For example, it cannot be asserted that cooking is always conducted as unpaid domestic work, and window cleaning by formal employees. Cooking, for instance, can be conducted as unpaid domestic work (e.g., where one cooks for oneself or one's family), unpaid community work (e.g., where one cooks for neighbors or friends on an unpaid basis), paid informal work (e.g., where one cooks in a restaurant on an off-the-books basis for “informal” payments that are not declared to the government for tax, benefit, or labor-law purposes), or formal employment (e.g., where one is a formally employed chef either registered self-employed or paid on a pay-as-you-earn basis). Different domestic services, therefore, do not belong to different types of work. Instead, all domestic services can be undertaken using each and every form of work.
Four basic types of work, therefore, can be used to provide domestic services. They are
•
self-provisioning, which is unpaid work undertaken by household members for themselves and other members of their household;
•
unpaid community work, which is work provided on an unpaid basis by and for the extended family, social or neighborhood networks, and more formal voluntary and community groups, and ranges from kinship exchange through friendship/neighborly reciprocal exchanges to one-way volunteering for voluntary organizations;
•
paid informal work, where legal goods and services are exchanged for money, but these exchanges are unregistered by, or hidden from, the state for tax, social security, or labor-law purposes; and
•
paid formal employment, which is paid work that is declared to the state for tax, social security and labor law purposes.
In recent decades, the thesis of delocalization has received widespread support. With the recent and rapid intensification of interregional and international trade and investment (economic delocalization) and the emergence of hypermobile and homeless capital (financial delocalization), a seamless and borderless world is asserted to be coming to fruition in which there is a diminution of the sovereignty of local, regional, and national states and their ability to regulate either national or international capital (political delocalization). The outcome is a loss of local cultures (cultural delocalization) due to the advent of a homogenous global culture founded on “Westernized” or “Americanized” cultural values. However, this rhetoric of economic, financial, political, and cultural delocalization has perhaps run ahead of the lived practice.
To do so, this report:
Reviews the different characteristics of social/labour ID cards used in Platform members’ countries;
Documents the experiences and challenges faced in developing, implementing, and monitoring social/labour ID cards as a tool for tackling undeclared work, identifying what works and what does not;
Collects examples of good practice, considering their transferability;
Provides suggestions on the possible next steps.
The finding is that in 2019, 11.1 % of total labour input in the private sector in the EU is undeclared (11.6 % in 2013), and undeclared work accounts for 14.8 % of gross value added (GVA) in the private sector (16.4 % in 2013). However, these are unweighted averages, not considering the relative size of the labour force in each Member State. The weighted averages are that 9.7 % of total labour input in the private sector in the EU is undeclared (10.2 % in 2013), and undeclared work constitutes 14.6 % of GVA in the private sector (14.9 % in 2013).
Therefore, between 2013 and 2019, there has been a decline in undeclared work at the EU level and a decline in 19 of the 26 Member States (estimates could not be produced for Malta in 2013), the exceptions being Bulgaria, France, Germany, Italy, Lithuania, the Netherlands and Romania. This displays the progress made in tackling undeclared work both in the EU as a whole and in most Member States.
The estimates of the extent of dependent self-employment need to be treated with caution and not as indisputable facts. Caution is required because currently, there is no consensus in theory or in national legislation on how the dependent self-employment, a ‘grey zone’ between genuine self-employment and waged employment, should be defined and measured. Despite the consensus that the dependent self-employed face two types of dependency, namely economic dependency and personal or organisational dependency, there is no universally accepted view on how each type of dependency should be measured, or whether both types of dependency should simultaneously be present to classify a worker as dependent self-employed. Therefore, estimates of the prevalence of dependent self-employment vary across different datasets and studies, depending on the indicators used to measure economic and organisational dependency, and whether both or just one form of dependency is assessed. In addition, legislative frameworks differ in terms of the criteria they use to decide whether a self-employed worker is genuine or dependent self-employed. This means that the estimates in this report do not align with the definitions in national legislation. For these reasons, the estimates provided should be read as the self-employed possessing characteristics of dependent self-employment and thus susceptible to, or at risk of, being dependent self-employed. There are also data limitations in this study. A limited number of questions are available to measure economic and organisational dependency in the EU-LFS. In addition, in some countries, a high number of self-employed refused to respond to these questions on their economic and organisational dependency, weakening the reliability of data and the robustness of cross-national comparisons.
The finding is that 1 in 31 (3.2 %) of all reporting themselves as self-employed without employees display the characteristics of being dependent self-employed. The estimates of the number of dependent self-employed without employees is numerically six times higher than the dependent self-employed with employees, revealing that the risk of dependency is much more prevalent amongst the self-employed without employees.
This report includes the assessment of progress carried out by the European Commission towards these 2030 Digital Compass goals, especially for services in two areas directly relevant for enforcement authorities and preventing undeclared work: 1) conducting regular business operations, and 2) starting a business. It then evaluates good practices in enforcement and other authorities on delivering these accessible and human-centric e-services, that make declared work easier, more beneficial, and acceptable, and therefore help transform undeclared work into declared work.
• Shift the objective from “reducing undeclared work” to “transforming undeclared work into declared work”;
• Develop a whole government coordinated approach, and
• Implement the full range of direct and indirect policy tools.
The aim of this study is to provide a baseline assessment of the progress of enforcement authorities in the Western Balkans towards adopting a holistic approach. To assess this, a questionnaire survey was sent to the tax administrations and labour inspectorates in Albania [AL], Bosnia and Herzegovina [BA], Kosovo* [XK], Montenegro [ME], Republic of North Macedonia [MK] and Serbia [RS]. This report evaluates the self-reported progress made.
Shift the objective from “reducing undeclared work” to “transforming undeclared work into declared work”;
Develop a whole government coordinated approach and fully involve social partners, and
Implement the full range of direct and indirect policy tools.
The aim of this study is to provide a baseline assessment of the progress of enforcement authorities in European countries towards adopting a holistic approach. To assess this, a questionnaire survey was sent to the 32 labour, tax and social security authorities participating in the European Platform tackling undeclared work (hereafter “the Platform”) in the 27 European Union member states plus Norway and Iceland (i.e., 28 labour authorities, 3 tax authorities and 1 social security authority). Responses were received from 23 labour authorities and 1 tax authority. This report evaluates the self-reported progress made.
Design/methodology/approach
To do this, the author report a 2013 survey conducted across 28 countries involving 1,969 face-to-face interviews with the self-employed about their participation in the informal economy.
Findings
Using multilevel mixed-effects logistic regression analysis, the finding is that the marginalisation thesis applies when examining characteristics such as the age, marital status, tax morality,occupation and household financial circumstances of the self-employed engaged in the informal economy. However, when gender and regional variations are analysed, the reinforcement thesis is valid.When characteristics such as the urban-rural divide and educational level are analysed, no evidence is found to support either the marginalisation or reinforcement thesis.
Research limitations/implications
The outcome is a call for a more nuanced understanding of the marginalisation thesis that the self-employed participating in the informal economy are largely marginalised populations.
Originality/value
This is the first extensive evaluation of which self-employed groups participate in the informal economy.
free economic activity at work. It is entirely unregulated except by
the participants themselves; no tax is paid on shadow economic
activity; and it may be possible to pursue activities in the shadow
economy which are prohibited by law unjustly. Indeed, the smugglers
of Sussex are still commemorated by the uniforms worn by
members of bonfire societies on Guy Fawkes Night and they were,
indeed, known as ‘free traders’.
At the very least, it is certainly true that, in a world in which
developed country governments are spending and borrowing
more and more, the possibilities for shadow economic activity
place a restraint upon governments. One of the reasons for the
‘Laffer curve’ effect, whereby tax revenues can start to fall as tax
rates are increased, is the movement of economic activity out of
the taxed economy and into the shadow economy.
Each and every one of these domestic services can be conducted using various sources of labor. For example, it cannot be asserted that cooking is always conducted as unpaid domestic work, and window cleaning by formal employees. Cooking, for instance, can be conducted as unpaid domestic work (e.g., where one cooks for oneself or one's family), unpaid community work (e.g., where one cooks for neighbors or friends on an unpaid basis), paid informal work (e.g., where one cooks in a restaurant on an off-the-books basis for “informal” payments that are not declared to the government for tax, benefit, or labor-law purposes), or formal employment (e.g., where one is a formally employed chef either registered self-employed or paid on a pay-as-you-earn basis). Different domestic services, therefore, do not belong to different types of work. Instead, all domestic services can be undertaken using each and every form of work.
Four basic types of work, therefore, can be used to provide domestic services. They are
•
self-provisioning, which is unpaid work undertaken by household members for themselves and other members of their household;
•
unpaid community work, which is work provided on an unpaid basis by and for the extended family, social or neighborhood networks, and more formal voluntary and community groups, and ranges from kinship exchange through friendship/neighborly reciprocal exchanges to one-way volunteering for voluntary organizations;
•
paid informal work, where legal goods and services are exchanged for money, but these exchanges are unregistered by, or hidden from, the state for tax, social security, or labor-law purposes; and
•
paid formal employment, which is paid work that is declared to the state for tax, social security and labor law purposes.
In recent decades, the thesis of delocalization has received widespread support. With the recent and rapid intensification of interregional and international trade and investment (economic delocalization) and the emergence of hypermobile and homeless capital (financial delocalization), a seamless and borderless world is asserted to be coming to fruition in which there is a diminution of the sovereignty of local, regional, and national states and their ability to regulate either national or international capital (political delocalization). The outcome is a loss of local cultures (cultural delocalization) due to the advent of a homogenous global culture founded on “Westernized” or “Americanized” cultural values. However, this rhetoric of economic, financial, political, and cultural delocalization has perhaps run ahead of the lived practice.
To do so, this report:
Reviews the different characteristics of social/labour ID cards used in Platform members’ countries;
Documents the experiences and challenges faced in developing, implementing, and monitoring social/labour ID cards as a tool for tackling undeclared work, identifying what works and what does not;
Collects examples of good practice, considering their transferability;
Provides suggestions on the possible next steps.
The finding is that in 2019, 11.1 % of total labour input in the private sector in the EU is undeclared (11.6 % in 2013), and undeclared work accounts for 14.8 % of gross value added (GVA) in the private sector (16.4 % in 2013). However, these are unweighted averages, not considering the relative size of the labour force in each Member State. The weighted averages are that 9.7 % of total labour input in the private sector in the EU is undeclared (10.2 % in 2013), and undeclared work constitutes 14.6 % of GVA in the private sector (14.9 % in 2013).
Therefore, between 2013 and 2019, there has been a decline in undeclared work at the EU level and a decline in 19 of the 26 Member States (estimates could not be produced for Malta in 2013), the exceptions being Bulgaria, France, Germany, Italy, Lithuania, the Netherlands and Romania. This displays the progress made in tackling undeclared work both in the EU as a whole and in most Member States.
The estimates of the extent of dependent self-employment need to be treated with caution and not as indisputable facts. Caution is required because currently, there is no consensus in theory or in national legislation on how the dependent self-employment, a ‘grey zone’ between genuine self-employment and waged employment, should be defined and measured. Despite the consensus that the dependent self-employed face two types of dependency, namely economic dependency and personal or organisational dependency, there is no universally accepted view on how each type of dependency should be measured, or whether both types of dependency should simultaneously be present to classify a worker as dependent self-employed. Therefore, estimates of the prevalence of dependent self-employment vary across different datasets and studies, depending on the indicators used to measure economic and organisational dependency, and whether both or just one form of dependency is assessed. In addition, legislative frameworks differ in terms of the criteria they use to decide whether a self-employed worker is genuine or dependent self-employed. This means that the estimates in this report do not align with the definitions in national legislation. For these reasons, the estimates provided should be read as the self-employed possessing characteristics of dependent self-employment and thus susceptible to, or at risk of, being dependent self-employed. There are also data limitations in this study. A limited number of questions are available to measure economic and organisational dependency in the EU-LFS. In addition, in some countries, a high number of self-employed refused to respond to these questions on their economic and organisational dependency, weakening the reliability of data and the robustness of cross-national comparisons.
The finding is that 1 in 31 (3.2 %) of all reporting themselves as self-employed without employees display the characteristics of being dependent self-employed. The estimates of the number of dependent self-employed without employees is numerically six times higher than the dependent self-employed with employees, revealing that the risk of dependency is much more prevalent amongst the self-employed without employees.
This report includes the assessment of progress carried out by the European Commission towards these 2030 Digital Compass goals, especially for services in two areas directly relevant for enforcement authorities and preventing undeclared work: 1) conducting regular business operations, and 2) starting a business. It then evaluates good practices in enforcement and other authorities on delivering these accessible and human-centric e-services, that make declared work easier, more beneficial, and acceptable, and therefore help transform undeclared work into declared work.
• Shift the objective from “reducing undeclared work” to “transforming undeclared work into declared work”;
• Develop a whole government coordinated approach, and
• Implement the full range of direct and indirect policy tools.
The aim of this study is to provide a baseline assessment of the progress of enforcement authorities in the Western Balkans towards adopting a holistic approach. To assess this, a questionnaire survey was sent to the tax administrations and labour inspectorates in Albania [AL], Bosnia and Herzegovina [BA], Kosovo* [XK], Montenegro [ME], Republic of North Macedonia [MK] and Serbia [RS]. This report evaluates the self-reported progress made.
Shift the objective from “reducing undeclared work” to “transforming undeclared work into declared work”;
Develop a whole government coordinated approach and fully involve social partners, and
Implement the full range of direct and indirect policy tools.
The aim of this study is to provide a baseline assessment of the progress of enforcement authorities in European countries towards adopting a holistic approach. To assess this, a questionnaire survey was sent to the 32 labour, tax and social security authorities participating in the European Platform tackling undeclared work (hereafter “the Platform”) in the 27 European Union member states plus Norway and Iceland (i.e., 28 labour authorities, 3 tax authorities and 1 social security authority). Responses were received from 23 labour authorities and 1 tax authority. This report evaluates the self-reported progress made.
Design/methodology/approach
To do this, the author report a 2013 survey conducted across 28 countries involving 1,969 face-to-face interviews with the self-employed about their participation in the informal economy.
Findings
Using multilevel mixed-effects logistic regression analysis, the finding is that the marginalisation thesis applies when examining characteristics such as the age, marital status, tax morality,occupation and household financial circumstances of the self-employed engaged in the informal economy. However, when gender and regional variations are analysed, the reinforcement thesis is valid.When characteristics such as the urban-rural divide and educational level are analysed, no evidence is found to support either the marginalisation or reinforcement thesis.
Research limitations/implications
The outcome is a call for a more nuanced understanding of the marginalisation thesis that the self-employed participating in the informal economy are largely marginalised populations.
Originality/value
This is the first extensive evaluation of which self-employed groups participate in the informal economy.
free economic activity at work. It is entirely unregulated except by
the participants themselves; no tax is paid on shadow economic
activity; and it may be possible to pursue activities in the shadow
economy which are prohibited by law unjustly. Indeed, the smugglers
of Sussex are still commemorated by the uniforms worn by
members of bonfire societies on Guy Fawkes Night and they were,
indeed, known as ‘free traders’.
At the very least, it is certainly true that, in a world in which
developed country governments are spending and borrowing
more and more, the possibilities for shadow economic activity
place a restraint upon governments. One of the reasons for the
‘Laffer curve’ effect, whereby tax revenues can start to fall as tax
rates are increased, is the movement of economic activity out of
the taxed economy and into the shadow economy.
informal sector as a major constraint on their operations, although this varies from 72% of formal enterprises in Chad to no formal enterprises in El Salvador. To explain these crosscountry variations, four competing theories are evaluated which variously view informal sector entrepreneurship and enterprise to be more prevalent when there is either: economic under-development (modernisation theory); high taxes and state over-interference (neoliberal theory); too little state intervention (political economy theory), or an asymmetry between the laws and regulations of formal institutions and the unwritten socially shared rules of informal institutions (institutional theory). A multilevel probit regression analysis confirms the modernisation and institutional theories, but not the neo-liberal and political theories. Beyond economic under-development, therefore, it is not too much or too little state intervention that is associated with the prevalence of informal sector competition but rather, whether the laws and regulations developed by governments are in symmetry with the norms, values and beliefs of entrepreneurs. The paper concludes by discussing the theoretical and policy implications of these findings.
Design/methodology/approach – To evaluate this, data are reported from a 2013 Eurobarometer survey involving 5,174 face-to-face interviews with employees in small businesses across the 28 member
states of the European Union (EU-28).
Findings – The finding is that small businesses display a greater propensity to engage in this informal wage practice in countries where there is a higher degree of asymmetry between the codified laws and regulations of formal institutions (state morality) and the unwritten socially shared rules of informal institutions (civic morality). A multi-level logistic regression analysis reveals these to be countries which have lower qualities of governance, lower levels of taxation and intervention in the labour market and less effective social transfer systems.
Research limitations/implications – The major limitation of this study is that it has only examined whether employees in small businesses receive informal wages. Future cross-country surveys should analyse a wider range of ways in which small businesses participate in the informal economy such as under-reporting turnover.
Originality/value – This is the first known analysis of cross-country variations in the participation of small businesses in the informal economy.
tendency of entrepreneurs to operate in the informal sector to be a result of the asymmetry between formal institutions (the codified laws and regulations) and informal institutions (norms, values and codes of conduct). The aim of this article is to further advance this institutional approach by evaluating the varying degrees of informalization of entrepreneurs and then analysing whether lower levels of formalization are associated with higher levels of institutional asymmetry. To do this, a 2012 survey of the varying degrees of informalization of 300 entrepreneurs in Pakistan is reported. The finding is that 62% of entrepreneurs operate wholly informal enterprises, 31% largely informal and 7% largely formal enterprises. None operate wholly formal enterprises. Those displaying lower levels of formalization are shown to be significantly more likely to display higher levels of institutional asymmetry, exhibiting greater concerns about public sector corruption, possessing lower tax morality and being more concerned about high tax rates and the procedural and distributive injustice and unfairness of the authorities. These entrepreneurs tend to be lower-income, younger and less-educated entrepreneurs. The article concludes by discussing the theoretical and policy implications of these findings.
of social entrepreneurship, the idea that entrepreneurship and enterprise culture
might be other than profit-driven capitalist endeavour is seldom entertained.
Instead, enterprise culture is widely viewed as a by-word for contemporary
capitalist culture. The aim of this article is to evaluate critically this dominant
narrative. To do this, GEM’s UK Social Entrepreneurship Monitor is used to
compare the levels and ratios of commercial-to-social entrepreneurship across
various population groups and areas in the UK. The finding is that one-third of
all entrepreneurs are driven primarily by social goals rather than profit, and that
cultures of entrepreneurship markedly vary across population groups and areas,
with rural and marginalized populations displaying a greater propensity to
engage in social rather than profit-driven entrepreneurship. The article
concludes by discussing the public policy implications of this finding that
enterprise cultures are not everywhere and always profit-driven, raising
questions not only about whether the promotion of profit-driven
entrepreneurship in marginalized populations is akin to parachuting in an alien
enterprise culture but also whether a focus upon social entrepreneurship might
promote greater inclusiveness in the enterprise culture agenda than is currently
the case.
To do so, this report:
Reviews the different characteristics of safe reporting and complaint reporting tools in Platform members’ countries.
Documents experiences and challenges faced in developing, implementing, and monitoring safe reporting and complaint reporting tools to tackle undeclared work, identifying what works and what does not.
Collects examples of good practice, considering their transferability.
Provides suggestions on the possible next steps.
1. Outlined a common assessment framework based on a holistic approach for developing labour inspectorates’ strategic goals, objectives and KPIs.
2. Developed a method that labour inspectorates can employ to develop their strategic objectives and performance indicators, tailored to their context, measuring their effectiveness on each component of the holistic approach.
3. Co-produced with two labour inspectorates a set of strategic objectives and KPIs tailored to their context assessing their effectiveness on each component of the holistic approach.
This thematic day took forward previous discussions and activity on this issue. The holistic approach was the topic of the Platform’s inaugural seminar held on 2 December 2016. Since then, the Platform’s understanding of the holistic approach has become ever more refined and nuanced as it has been applied to tackling undeclared work in specific sectors (e.g., construction , agriculture , road transport , tourism , HORECA ) and different types of undeclared work (e.g., envelope wages , bogus self-employment , collaborative platforms , letterbox companies ). To further operationalise this holistic approach, in 2020, a subgroup of the Platform was established with the resultant report containing a self-assessment questionnaire to assess progress towards a holistic approach. In January 2022, this self-assessment questionnaire was used to conduct a survey evaluating the degree to which a holistic approach towards undeclared work is being adopted by national authorities. The outcome was a study mapping the progress of national authorities towards a holistic approach using this common assessment framework. A draft of the study provided the background information for the thematic discussion day reported here.
This output paper summarises the presentations and discussions at the thematic day.
This paper describes the outcomes of the seminar. Its focus upon undeclared work in the HORECA sector complements previous sector-based Platform learning resources produced on tackling undeclared work in the agricultural, construction, road transport and air transport sectors
This thematic day took forward previous discussions on this issue. In 2020, at the start of the COVID-19 pandemic, the Platform held two webinars on the impacts of COVID-19. In early 2021, there was also a webinar on combating fraud in the short-term financial support schemes and from June to September 2021, a pilot Peer Learning Dialogue (hereafter PLD) was held on the lessons learned from the COVID-19 pandemic for the organisation of inspections and inspectorates, with seven countries represented (Greece, Ireland, Latvia, Norway, Portugal, Spain and Sweden).
This report summarises the presentations and discussions at the thematic day.
The next section reports the presentations in the opening session setting the scene and addressing the changes in the labour market and the operations of enforcement authorities. This is then followed in the third and fourth sections by a report of the presentations (detailing the outcomes of the PLD) and the discussions that took place in four workshops, as follows:
The third section reports discussion of the lessons learned from the COVID-19 pandemic for the organisation of inspections, including a workshop on the use of alternative types of inspection to the physical inspection to detect and prevent undeclared work as well as a parallel workshop on changes in the planning and conduct of physical workplace inspections to detect and prevent undeclared work.
The fourth section then reports discussion of the lessons learned from the COVID-19 pandemic for the organisation of inspectorates, covering both a workshop on changes in ways inspectorates operate when tackling undeclared work and the new skills and competencies required by inspectorates, as well as a parallel workshop on teleworking and other changes in the world of work and their implications for inspectorates. The fifth and final section summarises the key learning outcomes in terms of the practical recommendations on the way forward.
businesses of competitors’ undeclared work practices and the
policy measures service enterprises perceive as most effective in
tackling such noncompliant behaviour. The results of a survey with
1,130 service sector businesses reveals that illegal competition is
the most common major obstacle for their activity and more than a
half are severely affected by competitors undertaking undeclared
work. However, the proportion of businesses perceiving
competitors undertaking undeclared work as a major obstacle
varies across different service industries, as do the policy measures
that businesses view as required to tackle undeclared work. The
paper concludes by discussing the policy implications and calling
for a shift from the dominant deterrence approach aimed at
eradicating undeclared work to measures aimed at supporting the
transition to declared work.
too, as ordinary people ignore money and act, either individually or in groups, in ways that support each other. In this chapter, we will discuss how a lot of everyday economic life is practically anarchist, or rather, that we very often live like anarchists, even if we are encouraged not to.
explanations and policy responses.
explanations and policy responses.
Design/methodology/approach – To evaluate this institutional asymmetry theory, the results are reported of 1,306 face-to-face interviews conducted during 2013 in the UK.
Findings – The finding is a strong correlation between the degree of institutional asymmetry (measured by tax morale) and participation in the informal economy. The lower the tax morale, the greater is the propensity to participate in the informal economy. Using ordered logistic regression analysis, tax morale is not found to significantly vary by, for example, social class, employment status or wealth, but there are significant gender, age and spatial variations with men, younger age groups, rural areas and Scotland displaying significantly lower tax morale than women, older people, urban areas and London.
Practical implications – Rather than continue with the current disincentives policy approach, a new policy approach that reduces the asymmetry between government morality and societal morality is advocated. This requires not only changes in societal morality regarding the acceptability of participating in the informal economy but also changes in how formal institutions operate in order for this to be achieved.
Originality/value – This paper provides a new way of explaining participation in the informal economy and reviews its consequences for understanding and tackling the informal economy in the UK.
being caught and punished, and thus tackled by raising the sanctions and risks of detection. Given that many citizens do not engage even when the benefits outweigh the costs, a new social actor approach
has begun to emerge which explains the informal economy as arising when tax morality is low and seeks to foster commitment to compliance. The purpose of this paper is to provide an evidence-based evaluation of these competing policy approaches.
Design/methodology/approach – To do so, the results are reported of 1,306 face-to-face interviews undertaken during 2013 in the UK.
Findings – The finding is that raising the sanctions and risks of detection has no significant impact on the likelihood of participation in the informal sector. However, participation in the informal economy is
significantly associated with tax morality. Indeed, the only time that increasing the sanctions and risks of detection reduces the level of participation in the informal economy is amongst citizens with very
low tax morality.
Practical implications – Rather than continue with the current rational economic actor approach of increasing the penalties and risks of detection, this case study of the UK reveals that a new policy
approach is required that seeks to improve tax morality by introducing measures to reduce the acceptability of participating in the informal economy.Whether this is more widely applicable now needs to be tested, given the dominance throughout the world of this punitive rational economic actor approach.
Originality/value – This paper provides evidence supporting a new social actor approach towards explaining and tackling participation in the informal economy.
to review the elements of an effective education and awareness raising campaign on undeclared work.
to set out a proposal for an education and awareness raising campaign on undeclared work in the Western Balkans, and
to provide good practice examples of specific education and awareness raising activities that are transferable to Western Balkan economies.
The outcome is to set out what is required for an effective education and awareness raising campaign on the benefits of declared work in Western Balkan economies
• Shift the objective from “reducing undeclared work” to “transforming undeclared work into declared work”;
• Develop a whole government coordinated approach, and
• Implement the full range of direct and indirect policy tools.
The aim of this study is to provide a baseline assessment of the progress of enforcement authorities in the Western Balkans towards adopting a holistic approach. To assess this, a questionnaire survey was sent to the tax administrations and labour inspectorates in Albania [AL], Bosnia and Herzegovina [BA], Kosovo* [XK], Montenegro [ME], Republic of North Macedonia [MK] and Serbia [RS]. This report evaluates the self-reported progress made.
Around 40 participants from the Ministries of Labour, Labour Inspectorates, Tax Authorities and social partners (representatives of trade unions and employers’ associations) across the Western Balkans exchanged views and contributed to peer learning by answering the key discussion topics: identifying major challenges in developing greater cooperation; ways to improve the cooperation between social partners and authorities; and naming practical steps that could be undertaken to improve cooperation.
The aim of this learning resource is to summarise the discussion at the seminar. To do so, section 2 reports the discussion on the scope for greater cooperation between enforcement authorities and social partners, section 3 reports the discussion on the types of initiatives in which social partners could become more involved and section 4 the next steps that can be taken.
The aim of this study is to evaluate the current involvement of social partners in tackling undeclared work in the Western Balkans. To achieve this, a survey was undertaken of social partners in the six Western Balkan economies to evaluate: (i) their objectives in relation to tackling undeclared work; (ii) the current level of social partner cooperation with government authorities and (iii) the current range of initiatives pursued by social partners to tackle the undeclared economy.
the composition of their formal economies and instead classifies economies by their degree of informalisation.
Analysing International Labour Organisation data on the varying level of employment in the informal economy
across 16 Latin American economies, the outcome is to reveal a significant correlation between cross-national
variations in the degree of informalisation and cross-national variations in GNP per capita, poverty and social
contribution levels. The paper concludes by discussing the implications for theory and policy.
– Studies on women entrepreneurs either view women through a structuralist lens, asmarginalised populations engaged in low-quality work, or through a neo-liberal lens, as engaged inrelatively higher quality endeavour more as a rational choice. The aim of this paper is to evaluatecritically these explanations in relation to women entrepreneurs in the informal sector in India.
Design/methodology/approach
– To evaluate the contrasting explanations of structuralist andnew liberal approaches, questionnaire surveys were conducted in two phases, namely 2007 and 2010,over a period of several months. The sample design was stratified random and the sample was takenfrom a range of cities in different parts of India.
Findings
– The survey of 457 women entrepreneurs of the informal sector shows that although thestructuralist representation islargely appropriate for women working aswaged informal employees, itis not as valid for women informal entrepreneurs working on a self-employed basis. The resultschallenge the traditional understanding of the informal sector, and self-employed women in particular,and are discussed in the light of the institutional rational choice framework.
Research limitations/implications
– The analysis highlights how the decision of entrepreneurship does not stand in isolation from other decisions and choices, is in line withnormative considerations, and is a collective rational choice for women entrepreneurs in the informalsector. This analysis is a first of its kind and calls for additional surveys to be undertaken of female(and male) informal entrepreneurs in other countries to establish this concept.
Originality/value
– The analysis critically evaluates established explanations in relation to womenentrepreneurs in the informal sector through an empirical survey and establishes new explanations onwomen entrepreneurship
critically these explanations in relation to women entrepreneurs in the informal sector in India.
Design/methodology/approach – To evaluate the contrasting explanations of structuralist and new liberal approaches, questionnaire surveys were conducted in two phases, namely 2007 and 2010,over a period of several months. The sample design was stratified random and the sample was taken
from a range of cities in different parts of India.
Findings – The survey of 457 women entrepreneurs of the informal sector shows that although the structuralist representation is largely appropriate for women working as waged informal employees, it is not as valid for women informal entrepreneurs working on a self-employed basis. The results challenge the traditional understanding of the informal sector, and self-employed women in particular, and are discussed in the light of the institutional rational choice framework.
Research limitations/implications – The analysis highlights how the decision of entrepreneurship does not stand in isolation from other decisions and choices, is in line with
normative considerations, and is a collective rational choice for women entrepreneurs in the informal sector. This analysis is a first of its kind and calls for additional surveys to be undertaken of female (and male) informal entrepreneurs in other countries to establish this concept.
Originality/value – The analysis critically evaluates established explanations in relation to women
entrepreneurs in the inform
of this paper is to evaluAte critically these contrasting Explanations. To do this, the results of face-toface interviews with 323 women entrepreneurs operating in the Indian informal economy are analyzed. The finding is that although the structuralist representation is largely appropriate for women engaged in informal waged work, it is not as valid for women informal entrepreneurs working on a selfemployed basis where incomes are higher, they receive more credit from informal institutions, union membership is higher, and such work is more likely to be a rational choice. The outcome is a call to
recognize the diversity of women’s experiences in the informal sector and that not all informal entrepreneurship by women in developing nations is a low-paid, necessity-oriented endeavour carried out as a last resort.
conceptual frameworks for understanding both the burgeoning literature on infor-
mal employment and how each of the perspectives presented in this Special Issue contributes to the advancement of knowledge on this subject so as to set the scene for the articles that follow
As a result of the ILO South-South and Triangular Cooperation knowledge-sharing project on an Integrated Approach Towards Formalization in Tajikistan, Kyrgyzstan, Azerbaijan and Uzbekistan, the report sets out road maps for the four countries to make progress towards an integrated strategic approach to facilitate the transition to formality. The study includes an assessment of the informal economy in each country and proposes a whole government coordinated approach to formalize the informal economy, highlighting South-South and Triangular Cooperation as an instrumental tool to accomplish this objective.
namely the acceptability of corruption, the level of trust, transparency, and performance of the healthcare system. To do so, a logistic regression of 10,859 interviews with patients conducted across
11 Central and Eastern Europe countries in October–December 2020 is employed. The finding is that there are large disparities between countries in the prevalence of informal payments, and that the
practice is more likely to occur where there are poorer formal and informal institutions, namely higher acceptability of corruption, lower trust in authorities, lower perceived transparency in handling the COVID-19 pandemic, difficult access to, and poor quality of, healthcare services, and higher mortality rates due to the COVID-19 pandemic. These findings suggest that policy measures for tackling informal payments need to address the current state of the institutional environment.
Here, the policy initiatives are identified for tackling each determinant of wage under-reporting by: (i) explaining why it is important to focus on the determinant and its potential impact on preventing envelope wages; (ii) reporting “best practices” in fighting this determinant of envelope wages in other countries and (iii) making preliminary suggestions what can be done in Latvia to address this issue in addition to initiatives already initiated.
Design/methodology/approach – To do this, the authors report data from the 2010 Life in Transition Survey on tax morale in 35 Eurasian countries.
Findings – Logit econometric analysis reveals, on the one hand, that there is higher tax morale among middle-aged, married, homeowners with children, with a university degree and employed, and on the other hand, that there is higher tax morale in more developed countries with stronger legal systems and less corruption, and higher levels of state intervention in the form of both taxation and expenditure.
Research limitations/implications – Rather than continue with the rational actor approach, this paper reveals that how an emergent social actor approach can help to more fully explain tax non-compliance and results in a different policy approach focused upon changing country-level economic and social conditions associated with low tax morale and thus non-compliance.
Practical implications – These results display the specific populations with low tax morale which need targeting when seeking to tackle tax non-compliance.
Originality/value – This paper provides a new way of explaining and tackling tax non-compliance in Eurasian countries.
supply-side approach evaluates the reasons people work in this
sphere. This article, for the first time in Central and Eastern Europe,
explains the undeclared economy using a demand-side approach
which evaluates citizens’ motives for purchasing undeclared goods
and services. Here, three potential explanations for purchasing
undeclared goods and services, grounded in rational economic actor,
social actor and institutional imperfections theoretical perspectives,
are evaluated. Reporting data from 11,131 face-to-face interviews
conducted in 11 Central and Eastern European countries in 2013, the
main finding is that all three explanations are used by consumers,
demonstrating the need for a synthesis of these approaches. A
multinomial regression analysis identifies the specific groups variously
using the undeclared economy to obtain a lower price, for social or
redistributive rationales, or due to formal institutional imperfections.
The implications for theorising and tackling the undeclared economy
are then explored.
level, meanwhile, the prevalence of unregistered employment is strongly associated with tax morale; the greater the asymmetry between informal and formal institutions, the greater is the prevalence of unregistered
employment. It is also higher when GDP per capita as well as social distribution and state intervention (subsidies and transfers, social contribution expenditure, health expenditure) are lower. The paper concludes by discussing the theoretical and policy implications.
Eastern Europe are more likely to acquire goods and services from
the informal economy and to unravel their multifarious motives
for doing so. Analysing 11,131 face-to-face structured interviews
conducted in 11 Central and Eastern European (CEE) countries in
2013, a logit regression analysis reveals that some groups purchase
from the informal economy to obtain a lower price, others for social
or redistributive rationales, and yet others due to the failures of the
formal economy in terms of the availability, speed and quality of
provision. The implications for theorizing and tackling the informal
economy are then explored.
interest in the illegal wage practice
where formal employers pay their formal
employees two wages, namely an official
declared wage plus an additional undeclared
(envelope) wage, which reduces the tax
and social contributions that are paid to
the authorities. The aim of this paper is
to evaluate the prevalence and nature
of this illegal practice in Bulgaria and the
effectiveness of different policy approaches
for tackling this practice. Until now, two
competing policy approaches have been
advocated, namely a conventional rationaleconomic actor approach which seeks to
increase the perceived or actual penalties
and probability of being caught, and an
emergent social actor approach that seeks
to improve tax morale. Reporting a 2015
nationally representative survey comprising
2,004 face-to-face interviews conducted
in Bulgaria, the finding is that just under
1 in 7 formal employees (14.4 per cent)
reported receiving an additional undeclared
(envelope) wage from their formal employer,
with the mean amount of their net income
unreported amounting to 29.8 per cent.
Contrary to the widely-held assumption that
this illegal wage practice is always purely the
decision of employers, a key finding is that
this is the case in less than two-thirds (65.3
per cent) of reported cases. Employees
in some one-third of cases asserted that
it was either a joint idea or that they had
suggested this illegal arrangement. Adopting
an evidence-based approach to evaluating
how this should be tackled, a logit marginal
effects regression analysis reveals little
support for the rational economic actor
approach that seeks to reduce falselydeclared
salaries by increasing the penalties
and probability of being caught, but strong
support for the social actor approach that
decreases instances of falsely-declared
salaries by improving tax morale. The paper
concludes by discussing implications for
theory and policy.
supply-side approach evaluates the reasons people work in this
sphere. This article, for the first time in Central and Eastern Europe,
explains the undeclared economy using a demand-side approach
which evaluates citizens’ motives for purchasing undeclared goods
and services. Here, three potential explanations for purchasing
undeclared goods and services, grounded in rational economic actor,
social actor and institutional imperfections theoretical perspectives,
are evaluated. Reporting data from 11,131 face-to-face interviews
conducted in 11 Central and Eastern European countries in 2013, the
main finding is that all three explanations are used by consumers,
demonstrating the need for a synthesis of these approaches. A
multinomial regression analysis identifies the specific groups variously
using the undeclared economy to obtain a lower price, for social or
redistributive rationales, or due to formal institutional imperfections.
The implications for theorising and tackling the undeclared economy
are then explored.
undeclared work in Ukraine, involving not only an array of ‘off-the-books’
employees but also various types of informal self-employment as well as
forms of undeclared work more akin to mutual aid. Governments pursuing a conventional deterrent approach towards undeclared work may thus eradicate precisely the entrepreneurship and active citizenship that they otherwise seek to nurture. A more nuanced approach to tackling this sphere is proposed
acquire goods and services, or to circumvent formal procedures, known as blat in the Soviet era, persists in the post-Soviet world, 200 face-to-face interviews conducted in the city of Mykolayiv in Ukraine are reported. The finding is that personal networks are still commonly and widely used. However, unlike Soviet era blat which was non-monetized friendly help, control over access to assets and possessing personal connections to those controlling access to assets, has become a
commodity bought and sold for illicit monetary payments. The paper concludes by discussing how this corrupt practice might be tackled.
to capitalism. Building upon an emerging corpus of post-structuralist thought
that has begun deconstructing this discourse in relation to western economies
and the majority (third) world, this paper further extends this critique to
Central and Eastern Europe by investigating the degree to which people in
post-Soviet Ukraine rely on the capitalist market economy for their livelihood.
Reporting the results of 600 face-to-face interviews, the finding is that only a
small minority of households in this post-socialist society relies on the formal
market economy alone to secure their livelihood and that the vast majority
depend on a plurality of market and non-market economic practices. The
outcome is a call to re-think the lived practice of economic transition in
post-Soviet societies more widely in order to open up the feasibility of,
and possibilities for, alternative economic futures beyond capitalist
hegemony.
Although there is an emerging literature qualitatively exploring the coping tactics developed as in response
to economic marginalization, there has been little qualitative examination of the role that domestically produced
food plays within this broad spectrum of practices. This article begins to fill this lacuna by exploring
the various roles that the dacha, a plot of rural land given to households during the Soviet period, plays in
everyday life. Key Words: coping tactics, domestic food production, economic marginalization, informal economies,
Ukraine.
socialism, the same applies in societies in transition to capitalism, suggesting that there are alternative futures for community economies beyond market hegemony."
emergent ‘diverse economies’ literature by constructing a conceptual framework for representing the multiple labour practices in economies. Transcending the simplistic
market/non-market dichotomy, this conceptualises multiple kinds of labour existing along a spectrum from market-oriented to non-market oriented practices, which is cross-cut by
another spectrum ranging from wholly monetised to wholly non-monetised practices. The resultant portrayal of a plurality of labour practices that seamlessly merge into each other
is then applied to understanding the types of labour used in Ukraine. Analysing the results of 600 interviews conducted across various populations reveals not only the shallow
permeation of the formal market economy in this society that has been supposedly undergoing a ‘transition’ to the market but also the existence of diverse work cultures across different populations along with marked socio-spatial variations in the nature of individual labour practices. The outcome is a call for a re-reading of the organisation of labour in Ukraine and the wider application of this conceptual lens that captures the proliferative nature of labour practices in economies.
represent the informal economy as a residue or leftover of some pre-capitalist era, a
by-product of a new type of emergent formal economy, an alternative mode of work
organization or a complement to the formal economy. Drawing upon evidence from a
study of 600 households in Ukraine that unravels the heterogeneous forms of work in
the informal economy, the finding is that although each and every representation is
wholly valid in relation to specific types of informal work, no one articulation fully
captures the diverse nature and multiple meanings of the informal economy. Here, in
consequence, it is contended that only by using all of them will a finer-grained and more
comprehensive understanding of the complex and multifarious character of the informal
economy be achieved. To display how this can be achieved, a conceptual framework is
then presented that couples together these contrasting representations in order to
provide a more multi-layered and nuanced depiction of the informal economy, followed
by a discussion of the implications for urban and regional development and policy of
recognizing the multiple and diverse types of informal work
populations are more likely to participate in undeclared work, we
analyse a 2013 Eurobarometer survey of eight Baltic Sea countries,
namely four Western countries (Denmark, Finland, Germany and
Sweden) and four post-Soviet countries (Estonia, Latvia, Lithuania
and Poland). Finding that across both the Western and post-Soviet
Baltic Sea countries, some marginalized populations (e.g. those
having difficulties paying household bills, younger people) are
significantly more likely to participate in undeclared work, and others
are not (e.g. women, those with a high level of tax morality), a more
nuanced and variegated understanding of the marginalization thesis
is developed that is valid across both Western and post-Soviet Baltic
Sea countries. The paper concludes by discussing the theoretical and
policy implications.
populations are more likely to participate in undeclared work, we
analyse a 2013 Eurobarometer survey of eight Baltic Sea countries,
namely four Western countries (Denmark, Finland, Germany and
Sweden) and four post-Soviet countries (Estonia, Latvia, Lithuania
and Poland). Finding that across both the Western and post-Soviet
Baltic Sea countries, some marginalized populations (e.g. those
having difficulties paying household bills, younger people) are
significantly more likely to participate in undeclared work, and others
are not (e.g. women, those with a high level of tax morality), a more
nuanced and variegated understanding of the marginalization thesis
is developed that is valid across both Western and post-Soviet Baltic
Sea countries. The paper concludes by discussing the theoretical and
policy implications.
morality), the proposition is that the lower the tax morale (i.e. the greater the asymmetry between state morality and civic morality), the greater is the likelihood to participate in the
shadow economy. To evaluate this, a 2013 survey is reported involving 3036 face-to-face interviews in these 3 Baltic nations. Using logistic regression analysis, the finding is that the likelihood of participating in the shadow economy is greater, the lower is the tax morality of individuals, population groups and countries. In addition, the likelihood to participate in the
shadow economy is found to significantly vary by, for example, gender, employment status and country, people living in Latvia and Lithuania displaying significantly lower likelihood to engage in the shadow economy. The paper then explores the implications for theorizing and tackling the shadow economy.
populations are more likely to participate in undeclared work, we
analyse a 2013 Eurobarometer survey of eight Baltic Sea countries,
namely four Western countries (Denmark, Finland, Germany and
Sweden) and four post-Soviet countries (Estonia, Latvia, Lithuania
and Poland). Finding that across both the Western and post-Soviet
Baltic Sea countries, some marginalized populations (e.g. those
having difficulties paying household bills, younger people) are
significantly more likely to participate in undeclared work, and others
are not (e.g. women, those with a high level of tax morality), a more
nuanced and variegated understanding of the marginalization thesis
is developed that is valid across both Western and post-Soviet Baltic
Sea countries. The paper concludes by discussing the theoretical and
policy implications.
evaluates the relationship between the shadow economy and tax morale. Viewing tax morale as
a measure of the symmetry between the codified laws and regulations of formal institutions
(state morality) and the unwritten socially shared rules of informal institutions (civic
morality), the proposition is that the lower the tax morale (i.e. the greater the asymmetry
between state morality and civic morality), the greater is the likelihood to participate in the
shadow economy. To evaluate this, a 2013 survey is reported involving 3036 face-to-face
interviews in these 3 Baltic nations. Using logistic regression analysis, the finding is that the
likelihood of participating in the shadow economy is greater, the lower is the tax morality of
individuals, population groups and countries. In addition, the likelihood to participate is
shadow economy is found to significantly vary by, for example, gender, employment status
and country, people living in Latvia and Lithuania displaying significantly lower likelihood
to engage in the shadow economy. The paper then explores the implications for theorizing
and tackling the shadow economy.
Design/methodology/approach – To do so, World Bank Enterprise Survey data on 106,805 enterprises across 132 developing countries is used to provide a firm-level analysis of the relationship between bribery and firm performance.
Findings – The finding is that bribery enhances firm performance. Firms asserting that it is necessary for enterprises like theirs to give gifts or payments to public officials in order to get things done have 13.9 per cent higher average annual sales growth rates and 48 per cent higher annual productivity growth rates, after controlling for other determinants of firm performance.
Practical implications – Given that engaging in bribery at the firm level results in higher firm performance, despite bribery having an overall detrimental negative impact at the country level, public authorities will need to develop measures to alter not only the cost-benefit ratio confronting individual enterprises but also the institutional deficiencies that result in the prevalence of bribery.
Originality/value – This is the first firm-level evaluation of the relationship between bribery and firm performance across the developing world.
relations and practices in the construction of economic geographies; the possibilitiesöconstrained by these intersectionsöof creating alternative economic geographies; and the consequent possibilities of contributing to economic proliferation. We distinguish between three main forms of LCSö LETSystems, LETS schemes, and Time Dollarsödifferentiated along a range of institutional, orga- nisational, ethical, and moral dimensions. These LCSs reflect and illustrate the diversity of meanings,
understandings, and intentions brought to bear upon economic geographies. The existenceöeven if only temporaryöof LCSs is testament to the (limited) possibilities of local economic self-determina-
tion and organisation; but their material ineffectiveness, decline, and uneven geographical spread reflect their formative links with mainstream practices and social relations and their internal contra-
dictions and barriers. These characteristics illustrate the vulnerabilities inherent in all economic geographies and not just in those that are locally constructed.