Article
The Size and Development of the Shadow Economy: An Empirical Investigation from States of India
Journal of Development Economics
Document Type
Article
Language
eng
Format of Original
16 p.
Publication Date
8-1-2006
Publisher
Elsevier
Original Item ID
doi: 10.1016/j.jdeveco.2005.02.011; Shelves: HB1 .J55x
Disciplines
Abstract
Using the state level data from India, this paper investigates the size of the hidden economy in Indian states over the period 1974/75 to 1995/96. Our analysis has shown that after liberalization of the Indian economy in 1991/92, the growth in the size of the hidden economy has decreased on an average. Our results show that the growth in the size of the hidden economy is approximately 4% less in scheduled election years than in all other years. We also demonstrate that the growth is significantly lower in those states where the coalition government is in power. An increased growth of newspapers and the literacy rates translate to cleaner governance, e.g. to fewer amounts of shadow economy activities in the economy.
Citation Information
Kausik Chaudhuri, Friedrich Schneider and Sumana Chattopadhyay. "The Size and Development of the Shadow Economy: An Empirical Investigation from States of India" Journal of Development Economics (2006) ISSN: 0304-3878 Available at: http://works.bepress.com/sumana_chattopadhyay/4/
Accepted version. Journal of Development Economics, Volume 80, No. 2 (August 2006): pg. 428-443. DOI. © 2006 Elsevier. Used with permission.
Sumana Chattopadhyay was affiliated with the University of Missouri at the time of publication.