Uses And Abuses Of Estimates Of The Underground Economy  

Oleh:

Tanzi, Vito

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Economic Journal (EBSCO) vol. 109 no. 456 (Jun. 1999), page 338-347.
Topik: underground economy
Fulltext: 338.pdf (101.17KB)

Isi artikel

Not all economic activities take place in full view of government of®cials who can, thus, record them in the national accounts or can tax and regulate them. Some activities take place within the household and, because of the dif®culties of measuring them, the output they produce is not measured by the national account and is not taxed. (See Thomas, 1992). Some activities are inherently criminal and do not generate an output that can be considered valuable to society even though it may generate pecuniary gains to those who engage in them (murders, kidnappings, stealing, extortion). Some activities are considered illegal in some countries and legal in others even though they generate an output considered valuable by at least a part of society (narcotics production and distribution, prostitution, gambling). These activities can be large in some countries and should be counted in the national accounts of all countries although they rarely are. Their omission affects the comparability of data across countries. The incomes generated by illegal activities are rarely taxed.1 Many other activities, such as those associated with the subsistence or informal sectors, are estimated, rather than measured, and are generally not taxed because of the low value they generate to those who engage in them. In conclusion there are many reasons, beside the ones discussed in this paper why the measurements of national output may not be complete.

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