Chiumya, Chiza (2007): The Parallel Economy in Malawi: Size, Effect on Tax Revenue and Policy Options.
Download (403Kb) | Preview
This study looks at the dynamics of the Parallel Economy. I estimate the size of the Parallel Economy in Malawi and its relationship with Tax Revenues. The Parallel Economy in Malawi was 12.3%, 23.1% and 17.3% of GDP in the 1970s, 1980s, and 1990s respectively. Income Taxes were a major driver of the Parallel Economy as compared to Import and Consumption Taxes. An increase in Tax Revenue led to an increase in the Parallel Economy and a decrease in tax Revenue led to a decrease in the Parallel Economy.
|Item Type:||MPRA Paper|
|Original Title:||The Parallel Economy in Malawi: Size, Effect on Tax Revenue and Policy Options|
|Keywords:||Parallel Economy; Official Economy;Tax Revenue;|
|Subjects:||H - Public Economics > H2 - Taxation, Subsidies, and Revenue|
|Depositing User:||Chiza Chiumya|
|Date Deposited:||07. Aug 2008 10:03|
|Last Modified:||12. Feb 2013 13:11|
Arujo-Bonjean, C. and G. Chambas (2003). Taxing the Urban Unrecorded Economy in Sub-Saharan Africa. The Communication for the Hard to Tax. Antlanta Georgia. May, 2003.
Bhattacharyya, D. K. (1990). “An Econometric Method of Estimating the Hidden Economy in the United Kingdom (1960-1984): Estimates and Tests." The Economic Journal 100(402): 703-717.
Bovi, M. (2004). An Improvement of Tanzi Method for Estimation of Italian Underground Economy. Roma, Institute for Studies and Economic Analyses.
Cadri, P. and P. Passerini (2001). The Underground Economy, the Demand for Currency Approach and the Analysis of Discrepancies: Some Recent European Experience. Review of Income and Wealth. 47.
Chipeta, C. (1995). Tax Reform and Yield in Malawi. Research Paper Number 81. Nairobi, Africa Research Consortium.
Chipeta, C. (2002). The Second Economy and Tax Yield in Malawi. Research Paper Number 113. Nairobi, African Research Consortium.
Drummond, D., M. Either, et al. (1994). The Underground Economy: Moving the Myth Closer to Reality. Canadian Business Economics. D. o. Finance.
Eston, S. (2001). The Size of the Underground Economy: A Review of the Estimates, Simon Frazer University. Burnaby, British Columbia, Canada.
Feige, E. L. (1990). "Defining and Estimating Underground and Informal Economies: The New Institutional Approach " World Development 18(7).
Fethi, M. D., S. Fethi, et al. (2006). "Estimating the Size of the Cypriot Underground Economy: A Comparison with the European Experience." International Journal of Manpoir 27(6): 515-534.
Fiedman, E., S. Jonson, et al. (2000). "Dodging the grabbing hand: The Determinants of Unofficial Activity in 69 Countries." Journal of Public Economics 76(4): 459-494.
Gaertner, W. and A. Inig (1983). The Economics of the Shadow Economy. International Conference on the Economics of the Shadow Economy, University of Bielefeld, Springer-Verlag.
Gerxhani, K. (2003). "The Informal Sector in Developed and Less Developed Countries: A Literature Survey " Journal of Public Choice 120: 267-300. Giles, D. E. A. (1997). The Hidden Economy and the Tax Gap in New Zealand. Discussion Paper Number 97-8, Department of Economics, University of Victoria.
Giles, D. E. A. and M. T. Lindasy (2002). Taxes and the Canadian Underground Economy. Canadian Tax Paper Number 106. Toronto, Canadian Tax Foundation.
Giles, D. E. A., L. M. Tedds, et al. (1999). The Canadian Underground and Measured Economies: Granger Causality Results, Department of Finance, University of Victoria.
Grazia, R. D. (1982). Clandestine Employment: A Problem of Our Time. The Underground Economy in United States and Abroad. V. Tanzi. Massachusetts, Lexington Books.
Hanaousek, J. and F. Palda (2004). Mission Implausible III: Measuring the Informal Sector in Transition Economies using Macro Methods.
J. Alm and J. Martinez-Vazquez (2001). Societal Institutions and Tax Evasion in Developing Countries. Public Finance in developing and Transitional Countries. Georgia State University.
Kemal, M. A. (2003). Underground Economy and Tax Evasion In Pakistan: A Critical Evaluation Research Report Number 34. Islamabad, Pakistan Institute of Development Economics. Mankiw, N. G. (2003). Macroeconomics. New York, Worth Publishers.
Meyer, S., D. Downes, et al. (2003). Estimating the Size of the Hidden Economy in Barbados Central Bank of Barbados: 31-44.
Molefsky, B. (1982). America`s Underground Economy. The Underground Economy in the United States and Abroad. V.Tanzi. Massachusetts, Lexington Books.
Mwale, M., C. Msosa, et al. (2004). Currency in Circulation in Malawi. Research and Statistics Department, Reserve Bank of Malawi.
Ogunc, F. and G. Yilmaz (2000). Estimating the Parallel Economy in Turkey, Central Bank of the Republic Of Turkey.
Pashev, K. (2005). Tax Compliance in Transition Economies: Lessons from Bulgaria. Working Paper. Antlanta, Andrew Young School of Public Policy Studies.
Rubenson, D. (1986). The Underground Economy: An Unobservable Variable Approach to Understanding its Causes and Macroeconomic Effect. School of Urban and Public Affairs, Carnegie-Mellon University. PhD: 211.
Schneider, F. (1986). "Estimating the Size of the Danish Underground Economy Using the Currency Demand Approach." Scandinavian Journal of Economics 88(4): 643-668. Schneider, F. (2004). The Size of Shadow Economies in the World. Discussion Paper Number 1431. Bonn, Institute for the Study of Labor (IZA).
Schneider, F. and D. Enste (1999). The Shadow Economies around the World: Size, Causes and Consequences. CESifo Working Paper Number 196.
Shabsigh, G. (1995). The Underground Economy: Estimation, Estimation and Economic Policy Implication Implications. Working Paper Number 95/101, International Monetary Fund
Simwaka, K. (2004). Dynamics of Inflationary Process in Malawi: An Econometric Analysis. Research and Statistics Department, Reserve Bank of Malawi.
Tanzi, V. (1982). The Underground Economy and Tax Evasion in the United States: Estimates and Implications. The Underground Economy in the United States and Abroad. V.Tanzi. Toronto, Lexington Books.