nep-iue New Economics Papers
on Informal and Underground Economics
Issue of 2018‒07‒09
four papers chosen by
Catalina Granda Carvajal
Universidad de Antioquia

  1. Effects of Institutional History and Leniency on Collusive Corruption and Tax Evasion By Johannes Buckenmaier; Eugen Dimant; Luigi Mittone
  2. Customs Administration in Russia: What to Do? By Balandina, Galina; Ponomarev, Yuriy; Sinelnikov-Murylev, Sergei G.; Tochin, Andrey
  3. “What drives the spatial wage premium for formal and informal workers? The case of Ecuador” By Alessia Matano; Moisés Obaco; Vicente Royuela
  4. Informal sector inclusion in the sustainable waste management system as an opportunity for employment and social inclusion of vulnerable groups By Zoran Sapuric; Sanela Shkrijelj; Blazhe Josifovski

  1. By: Johannes Buckenmaier (Department of Economics, University of Zurich); Eugen Dimant (University of Pennsylvania and Centre for Decision Research and Experimental Economics (CeDEx), University of Nottingham); Luigi Mittone (Cognitive and Experimental Economics Laboratory, University of Trento, Department of Economics)
    Abstract: We investigate the effects of an institutional mechanism that incentivizes taxpayers to blow the whistle on collusive corruption and tax compliance. We explore this through a formal leniency program. In our experiment, we nest collusive corruption within a tax evasion framework. We not only study the effect of the presence of such a mechanism on behavior, but also the dynamic effect caused by the introduction and the removal of leniency. We find that in the presence of a leniency mechanism, subjects collude and accept bribes less often while paying more taxes, but there is no increase in bribe offers. Our results show that the introduction of the opportunity to blow the whistle decreases the collusion and bribe acceptance rate, and increases the collected tax yield. It also does not encourage bribe offers. In contrast, the removal of the institutional mechanism does not induce negative effects, suggesting a positive spillover effect of leniency that persists even after the mechanism has been removed.
    Keywords: Collusive bribery, Institutions, Tax compliance, Leniency, Spillover
    Date: 2018–05
  2. By: Balandina, Galina (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Ponomarev, Yuriy (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Sinelnikov-Murylev, Sergei G. (Russian Foreign Trade Academy; Gaidar Institute for Economic Policy; Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Tochin, Andrey (Russian Presidential Academy of National Economy and Public Administration (RANEPA))
    Abstract: Modern customs administration in Russia in comparison with the best world practices provides insufficient efficiency both for the state and for participants in foreign economic activity. The level of unreliable declaring by the business or importing goods into the country bypassing the established rules remains high. This leads to such negative consequences as unfair competition, evasion from payment of internal taxes, escalation of shadow turnover. The discretionary powers of customs authorities and their officials with existing control technologies (the multiplicity of supervisory bodies and the lack of necessary interaction between them) create conditions for administrative pressure on the business that promotes corruption.
    Date: 2018–06
  3. By: Alessia Matano (AQR-IREA, University of Barcelona,); Moisés Obaco (AQR-IREA, University of Barcelona,); Vicente Royuela (AQR-IREA, University of Barcelona,)
    Abstract: This article investigates the incidence of agglomeration externalities in a typical developing country, Ecuador. In particular, we analyze the role of the informal sector within these relations, since informal employment accounts for a significant part of total employment in the developing countries. Using individual level data and instrumental variable techniques, we investigate the impact of spatial externalities, in terms of population size and local specialization, on the wages of workers in Ecuadorian cities. The results show that spatial externalities matter also for a typical developing country, especially as far as urbanization externalities are concerned. Moreover, analysis of the interaction between spatial externalities and the informal economy shows a general penalization for informal workers in terms of benefits arising from agglomeration externalities. Finally, by investigating the possible channels behind the heterogeneity found in spatial agglomeration gains between formal and informal workers, we show that the advantages from agglomeration for formal workers may well be accounted for by positive sorting and better gains from job changes, while for informal workers they arise from positive learning externalities.
    Keywords: Agglomeration Externalities; Developing Economies; Informal Employment; Workers’ Wages; FUAs; Ecuador. JEL classification: J31, J46, R23, R12
    Date: 2018–06
  4. By: Zoran Sapuric; Sanela Shkrijelj; Blazhe Josifovski
    Date: 2018–01

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