Explaining the Undeclared Economy in Bulgaria: an Institutional Asymmetry Perspective

• Authors: Colin C. Williams , Josip Franic , Rositsa Dzhekova
• Languages of publication: EN

Abstracts

EN

This paper proposes a way of explaining the undeclared economy that represents participation in undeclared work as a violation of the social contract between the state and its citizens, and as arising when the informal institutions comprising the norms, values and beliefs of citizens (civic morality) do not align with the codified laws and regulations of a society’s formal institutions (state morality). Drawing upon evidence from 1,018 face-to-face interviews conducted in Bulgaria during 2013, the finding is that the greater is the asymmetry between formal and informal institutions (i.e., citizens’ civic morality and state morality), the greater is the likelihood of participation in the undeclared economy, and vice versa. The outcome is that tackling the undeclared economy requires a focus upon reducing this lack of alignment of formal and informal institutions. How this can be achieved in Bulgaria in particular and South-East Europe and beyond more generally, is then discussed.

Keywords

EN

informal sector; shadow economy; tax morale; institutional theory; Bulgaria; South-East Europe

• Publisher: Sciendo
• Journal: South East European Journal of Economics and Business
• Year: 2015
• Volume: 9
• Issue: 2
• Pages: 33-45

Dates

published

2015-03-01

online

2015-03-13

Contributors

author

Colin C. Williams

• Professor of Public Policy Management School, University of Sheffield, UK

author

Josip Franic

• Marie Curie Research Fellow Management School, University of Sheffield, UK

author

Rositsa Dzhekova

• Marie Curie Research Fellow Management School, University of Sheffield, UK

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Identifiers

DOI

10.2478/jeb-2014-0008