Demonetization is an economic tool used to reduce the size of an underground economy. Though studies on the effectiveness of demonetization have increased over the past 50 years, there is little literature on the ineffectiveness of demonetization and subsequent factors that could explain a lack of change, or an increase, in illegal activity. This paper examines past cases of demonetization to determine the effectiveness of demonetization, and investigates the incentive for foreign currency substitution as a mechanism for criminals to circumvent regulatory scrutiny. Major findings of this paper include a positive but statistically insignificant correlation between demonetization and growth in the shadow economy, and a statistically significant positive relationship between exchange rate appreciation and demonetization. Finally, this paper applies these findings to test the “Modi effect” of Indian Rupee (INR) demonetization.

<p> The term "underground economy" refers to output that is produced, and income that is generated, by agents who hide this fact from authorities. There has been a recent resurgence in interest in the underground economy and this interest has predominantly been stimulated by the perception that the underground economy is sizeable and growing. This dissertation is comprised of three essays, the goals of which are to provide empirical measures of underground activity.</p> <p> The first paper in this dissertation applies a modeling technique that treats the underground economy as an unobservable or latent variable and incorporates multiple indicator and multiple causal (MIMIC) variables to estimate a time-path of the size of broadly defined underground economy. Using macroeconomic Canadian data, the results indicate that the underground economy grew steadily over the sample period: from 7.5% of Gross Domestic Product (GDP) in 1976 to about 15.3% in 2001.</p> <p> The second paper uses microeconomic data and proposes a nonparametric expenditure-based approach to obtain estimates of income under-reporting by self- employed households. The approach is illustrated by estimating the effect of the Canadian Goods and Services Tax (GST) on income under-reporting. It is found that the difference between true and reported self-employment income is larger for households at the lower end of the self-employment income distribution and that there was no statistically significant change in under-reporting behaviour following the implementation of the GST.</p> <p>The third paper investigates the characteristics of businesses that engage in tax non-compliance using a survey of firms from around the world. Overall, small firms tend to be less compliant than larger firms. In addition, foreign owned firms, exporters, and firms that have audited financial statements are found to be more compliant but quite surprisingly, government ownership does not result in increased tax compliance. Finally, the existence of organized crime, high taxes, and government corruption all result in lower compliance.</p> / Thesis / Doctor of Philosophy (PhD)

The purpose of this paper is to study underground Mark Six, which is among the most popular activities in Taiwan. Although it involves complicated financial transaction and lots of people, the deriving debt has no legal status according to principle ¡§the gamble debt is illegal¡¨ proscribed in Taiwanese civil law. This thesis focuses on how this system operates without the assurance of the legal system, which is widely believed as the foundation of modern property right. This Data were collected by in-depth interview and participant observation, including 23 interviewers in three main roles and other related actors, gamblers, brokers, bankers, and then, observing the transaction details of underground Mark Six in the illegal casino to analyze the issue specifically. This study identities three major mechanisms that maintain the operation of underground Mark Six: social Network, violence and risk Management. First, the definition of Social network is the relationship construction under the illegal Mark Six transaction. Trust and reputation, derived from the social network, protect transaction safety as a normative force. Next, the mechanism of violence is the transaction progress which judges in underworld way. Also, the mechanism of violence has the technique of evasion of law. Third, the mechanism of risk management is by different layers' actors to work on, and therefore, these actors cause the variation of transaction rule, method and restriction. In order to avoid debt quarrel, for instance, gamblers in lower layer usually decrease the risks by separating the creditor's right to different uplinks.For the brokers in the middle layer, they use a specific transaction record to insure the transaction execution. What's more is that the bankers in the top layer would control the signed Mark Six number for some specific number to prevent a horrible ¡§Hot Pack¡¨ result. I also find that recently Underground Mark Six is toward network technology, gathering with the traditional manual operation. These two executions so called ¡§Computer Operation¡¨ and ¡§Paper Operation.¡¨ Computer operation, moreover, is toward to be an institutionalization franchise, leading the Underground Mark Six to a technology operation, especially for account and managing risk.

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Beginning in the late 1960s officials in New York City faced a growing financial problem. Revenues collected did not add up to meet the city’s budget. In 1975, that problem became a crisis when the city could no longer meet its debt obligations. On the precipice of bankruptcy, a city once known for its generous welfare state, adopted austerity and structural readjustment in order to access federal aid and stave off collapse. Historians have examined the political and economic causes and social consequences of the fiscal crisis as well as the ways in which the city rebuilt itself as a playground for visitors and through the actions of the city’s financial elite. Do the Hustle: Municipal Regulation of New York City’s Underground Economy, 1965 to the Present, examines the ways in which officials rebuilt and reorganized New York City through revenue. Using New York City as a case study of state development I argue that the state rebuilt and reoriented itself around extracting and protecting revenues through regulation in the final decades of the twentieth-century. City officials rebuilt New York by creating new licensing requirements, offering generous tax incentives to businesses, and instituting regulations that protected what officials considered to be the most important sources of revenue – the financial industry, real estate, and tourism. Beginning with the Lindsay administration and ending with Giuliani’s two terms as mayor, this project traces the ways in which city officials attempted to extract new revenues from previously untapped sources in the city’s informal and semi-formal sectors while simultaneously working to protect revenues generated by finance, development, and tourism from nuisance businesses that might affect their bottom line and thus, municipal revenues. In their pursuit of revenue, officials actively constructed a new New York City that courted business at the expense of average citizens. That transformation has not been limited to New York as other municipalities have also shifted focus to revenue extraction and protection. By the twenty-first century, the extraction and protection of revenue through regulation had resulted in high levels of income inequality, aggressive policing, and a growing homeless population in cities across the country. / History

The dissertation aims at broadening our understanding of tax evasion and government spending in developing countries. It comprises three essays. The first essay deals with estimation of tax evasion in a cross-section of developing countries by estimating their underground economies using the currency demand method. By including enforcement parameters of the tax authorities as another factor of tax evasion in the currency demand equation, it presents theory-consistent tax evasion measurement. Our estimation strategy includes the use of the Arellano-Bond dynamic panel data method that is suitable for correcting the endogeneity problem in the currency demand estimation. The study finds substantial underground economy in developing countries, ranging from 2-67 percent of GDP. The second essay is concerned with time series measurement of the underground economy in South Africa using the currency demand method. Unlike other similar studies on South Africa, it gives sufficient attention to the unit root problem that is common in time series analysis of the currency demand method. Using the Error Correction Method (ECM), it investigates the relationship between the tax rate and the currency demand, and presents yearly estimates of the underground economy for the period 1965-2002. The third essay deals with the behavior of government spending in South Africa for the period 1960-2002. Since South Africa went through various political and macroeconomic shocks during this period, we augment measures of these shocks to the standard median voter model to assess the determinants of government spending in South Africa. Using the Error Correction Method (ECM), we investigate the long-run and short-run behavior of government spending. We find that, in addition to the tax share and the income of the median voter, macroeconomic and political shocks were also significant factors in determining government spending in South Africa. This study broadens our understanding of the behavior of government spending in the presence of political and macroeconomic shocks that are common in small open developing economies.

The main aim of this paper is to measure the underground economy of India and to review previous attempts to do the same. In this paper I provide estimates of the size of the hidden economy of India for the period 1971 - 2004. Analysis on previous attempts is done with a focus on the dynamic multiple indicators multiple causes (DYMIMC) and the currency demand methods. I estimate the size of the Indian economy using indicator and causal variables chosen by Schneider, Chaudhuri and Chatterjee in their paper, “The Size and Development of the Indian Shadow Economy and a Comparison with other 18 Asian Countries: An Empirical Investigation”.

The final thesis covers a situation of a second housing in Czech Republic. It analyzes an origin and a development of this phenomenon during 20th century. Thesis is focused on the second half of 20th century especially, emphasizes the variety of motivations for having the hobby of second housing and also discusses the issues with constructions or reconstructions of cottages and chalets. Particularly, insufficiencies of building materials and lack of craft services that are closely related to underground economy, which is also discussed here.

Tax law related aspects of the underground economy The aim of this thesis is the analysis of the underground economy and the sources of its genesis and particular tax law related aspects of the underground economy including legal instruments which are used to eliminate and counter it. The goal is also the description of specific kinds of the underground economy policies. This thesis is divided into three chapters. The first chapter brings definition of the underground economy and division of it among black economy, grey economy and home production. The next part of this chapter is dedicated to the causes of the underground economy. Firstly it describes the tax burden with focus on the value-added tax, there is the analysis of the problematics associated with tax evasion and tax avoidance, carousel frauds and tax havens. The second part of this chapter describes illegal work and execution of jobs in the form of unreported employment and a form called "švarcsystém". In the second chapter is the analysis and description of selected institutes of tax law which are used to eliminate the underground economy including illegal work. The institutes are tax inspection, electronic registration of sales, control reporting and work inspection focused on illegal work. The next part of the chapter is dealing with...

本文旨在探討俄羅斯影子經濟現象，而在影子經濟包羅萬象的形式中，又以當前俄羅斯最重要議題之一的貪污為主要分析主題。本文內容主要可以分為三部分：第一部分，首先釐清影子經濟與貪污概念，並闡述影子經濟於蘇聯末期發展情況以了解其背景。第二部分，探討蘇聯解體後俄羅斯向市場經濟轉型時期影子經濟的轉變，以及貪污的主要模式。第三部分，剖析普欽任總統時期俄羅斯影子經濟的發展，自不同面向檢視貪污情形，並闡釋影子經濟與貪污的關係。 本文將影子經濟內涵界定為家戶經濟，非正式經濟活動，與犯罪經濟活動。其中，貪污屬犯罪經濟活動範疇，且又以政府部門的貪污影響最劇。俄羅斯影子經濟自蘇聯末期開始快速發展，向市場經濟轉型時期，由於各類必要制度的缺乏，改革措施導致影子經濟規模擴展，許多影子關係亦於此時期制度化。二十一世紀初期，俄羅斯影子經濟受葉爾欽時期遺續影響，規模仍大。然而，普欽第一任總統任期中，影子經濟與貪污情況皆有所改善。但於第二任期間因政府治理品質惡化，行政體系問題，以及整體民主自由度的下降，導致貪污再次成長。最後本文指出，貪污不僅為影子經濟中主要制度之一，且為促使非法影子經濟發展的主要根源。因此，本文認為，欲抑制削減非法影子經濟應得從打擊貪污著手，並嘗試提出降低貪污規模的辦法。 / The main purpose of this article is to explore the phenomena of shadow economy in Russia. And in the multiform shadow economy, the most topical issue in Russia today – corruption has been chosen as the core of our analysis. Contents of this article can be divided into three parts: first of all, the concepts of the shadow economy and corruption are defined. Meanwhile, the development of the shadow economy in the late Soviet era is introduced as background knowledge. In the second part, the evolution of the shadow economy during Russia’s transition to market economy, as well as specific models of corruption are expounded. The third part presents an analysis of the development of the shadow economy in Putin’s period, examines corruption from different dimensions, and interprets the relations between shadow economy and corruption. In this article the shadow economy includes following three kinds of activities: household economic activities, unofficial economic activities, and illegal economic activities. As one kind of illegal economic activities, corruption of government officials has the most serious impact. The shadow economy in Russia spread quickly in the last years of Soviet Union. Afterward throughout the economic transition, owing to lack of essential institutions, market reforms stimulated expansion of the scale of the shadow economy. Diverse shadow relations and behaviors were also institutionalized in that period. While at the beginning of Putin’s regime, because of the legacy of his predecessor, the scale of the shadow economy remained high, in Putin’s first term the situations of the shadow economy and corruption indeed had been improved. Nevertheless, due to deterioration of the quality of governance, problems in the administrative system, and a decline in the level of democratic freedom, corruption again wildly grew in his second term. Corruption is seen in this article as a primary institution of the shadow economy and the root of illegal shadow economy. Thus it is considered in this article that restraining illegal shadow economy must start from combating corruption, and few possible methods of reducing corruption are purposed.