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VARIOUS ANALYTIC AND SIMULATION MODELS DESIGNED TO INTEGRATE THE POLITICAL AND ECONOMIC SECTORS ARE SURVEYED, STRESSING THE INTERACTING LINKS GOING FROM THE ECONOMY TO THE POLITY THROUGH THE POPULARITY FUNCTION AND IN THE REVERSE DIRECTION THROUGH THE GOVERNMENT'S REACTION FUNCTION.

In this paper the main focus lies on the shadow economy and on work in the shadow. The most influential factors on the shadow economy are tax policies and state regulation. The size of the shadow economy was decreasing over 1999 to 2007 from 34.0% to 31.2% for 161 countries (unweighted average). Furthermore, economic opportunities, taxes and regulations, the general situation on the labor market, and unemployment are crucial for an under-standing of the dynamics of the shadow labor force. Opposite to the decrease of the shadow economy (value added figures), the shadow economy labor force increased for most countries over the period 1999 to 2007.

This paper presents the various methods to estimate the size of the shadow economy, their strengths and weaknesses. The purpose of the paper is twofold. Firstly, it demonstrates that no ideal method to estimate the size and development of the shadow economy exists. Because of its flexibility, the MIMIC method used to get macro-estimates of the size of the shadow economy is discussed in greater detail. Secondly, the paper focuses on the definition and causal factors of the shadow economy as well as on a comparison of the size of the shadow economy using different estimation methods.

In this paper we analyze the influence of direct democratic institutions on the size and development of the shadow economies. The framework developed predicts a negative relationship between the degree of direct democracy and the size of the shadow economy. Countries where direct democratic institutions support democratic life are expected to be characterized by a lower informal sector, ceteris paribus. The empirical / econometric investigation of a sample of 56 democracies confirms our core hypothesis and demonstrates that the effect of direct democratic institutions on the shadow economy is negative and quantitatively important; the results are robust and also depend on the interaction of direct democracy with other political institutions, such as district magnitude.

COVER -- Copyright -- Contents -- Contributors -- Introduction -- PART I Size and development of the shadow economies all over the world -- 1 Shadow economies all over the world: new estimates for 162 countries from 1999 to 2007 -- 2 Survey on the shadow economy and undeclared work in OECD countries -- 3 The size and development of the shadow economy in India: a first attempt at a public choice explanation -- 4 Size, development and perception of the shadow economy in Switzerland -- PART II Regional variation in the size and development of the shadow economy -- 5 Regional variations in the nature of the shadow economy: evidence from a survey of 27 European Union member states -- 6 Regional patterns of the shadow economy: modelling issues and evidence from the European Union -- PART III Shadow economy, illicit work and related activities -- 7 The shadow economy and do-it-yourself activities: what do we know? -- 8 The shadow economy in the residential construction sector -- 9 Who is working illicitly and why? Insights from representative survey data in Germany -- PART IV Tax morale and the shadow economy -- 10 Tax morale, tax evasion and the shadow economy -- 11 The link between the intrinsic motivation to comply and compliance behaviour: a critical appraisal of existing evidence -- 12 Deterrence policy and the size of the shadow economy in Germany: an institutional and empirical analysis -- PART V Corruption and the shadow economy -- 13 The impact of institutions on the shadow economy and corruption: a latent variables approach -- 14 Shadow economy, voice and accountability, and corruption -- Index.

In order to guarantee a further successful functioning of the enlarged European Union a Federal European Constitution is proposed. Six basic elements of a future European federal constitution are developed: the European commission should be turned into an European government and the European legislation should consist of a two chamber system with full responsibility over all federal items. Three further key elements are the subsidiarity principle, federalism and the secession right, which are best suited to limiting the domain of the central European authority to which certain tasks are given, such as defense, foreign and environmental policy. Another important feature is direct democracy, which provides the possibility for European voters to participate actively in the political decision making, to break political and interest group cartels, and to prevent an unwanted shifting of responsibilities from EU member states to the European federal level.

Recommended readings (Machine generated): Bruno S. Frey and Werner W. Pommerehne (1984), 'The Hidden Economy: State and Prospects for Measurement', Review of Income and Wealth, 30 (1), March, 1-23 -- Ann D. Witte (1987), 'The Nature and Extent of Unrecorded Activity: A Survey Concentrating on Recent US Research', in Sergio Alessandrini (ed) and Bruno Dallago (ed) (eds), The Unofficial Economy: Consequences and Perspectives in Different Economic Systems, Aldershot, UK: Gower, 61-81 -- Friedrich Schneider and Dominik H. Enste (2000), 'Shadow Economies: Size, Causes, and Consequences', Journal of Economic Literature, XXXVIII (1), March, 77-114 -- Klarita Gërxhani (2004), 'The Informal Sector in Developed and Less Developed Countries: A Literature Survey', Public Choice, 120 (3/4), 267-300 -- Phillip Cagan (1958), 'The Demand for Currency Relative to the Total Money Supply', Journal of Political Economy, 66 (4), 303-28 -- Bruno S. Frey (1983), 'Politics, Economics, and the Underground Economy', in Kristen R. Monroe (ed) (ed.), The Political Process and Economic Change, Chapter 2, New York, NY: Agathon Press, 17-42 -- Edgar L. Feige (1985), 'The Meaning of the "Underground Economy" and the Full Compliance Deficit', in Wulf Gaertner (ed) and Alois Wenig (ed) (eds), The Economics of the Shadow Economy, Berlin/Heidelberg: Springer-Verlag, 19-36 -- David E.A. Giles (1999), 'Measuring the Hidden Economy: Implications for Econometric Modelling', Economic Journal, 109 (456), June, F370-F380 -- James D. Smith (1985), 'Market Motives in the Informal Economy', in Wulf Gaertner (ed) and Alois Wenig (ed) (eds), The Economics of the Shadow Economy, Berlin/Heidelberg: Springer-Verlag, 161-77 -- Peter de Gijsel (1985), 'A Microeconomic Analysis of Black Labour Demand and Supply', in Wulf Gaertner (ed) and Alois Wenig (ed) (eds), The Economics of the Shadow Economy, Berlin/Heidelberg: Springer-Verlag, 218-26 -- Reinhard Neck, Friedrich Schneider and Markus F. Hofreither (1989), 'The Consequences of Progressive Income Taxation for the Shadow Economy: Some Theoretical Considerations', in Dieter Bös (ed) and Bernhard Felderer (ed) (eds), The Political Economy of Progressive Taxation, Heidelberg: Springer-Verlag, 149-76 -- James Alm, Gary H. McClelland and William D. Schulze (1992), 'Why Do People Pay Taxes?', Journal of Public Economics, 48 (1), June, 21-38 262 -- Marco Fugazza and Jean-François Jacques (2003), 'Labor Market Institutions, Taxation and the Underground Economy', Journal of Public Economics, 88, January, 395-418 -- V. Ginsburgh, Ph. Michel, F. Padoa Schioppa and P. Pestieau (1985), 'Macroeconomic Policy in the Presence of an Irregular Sector', in Wulf Gaertner (ed) and Alois Wenig (ed) (eds), The Economics of the Shadow Economy, Berlin/Heidelberg: Springer-Verlag, 194-217 -- Jim Thomas (1999), 'Quantifying the Black Economy: "Measurement Without Theory" Yet Again?', Economic Journal, 109 (456), June, F381-F389 -- Francesco Busato and Bruno Chiarini (2004), 'Market and Underground Activities in a Two-sector Dynamic Equilibrium Model', Economic Theory, 23 (4), 831-61 -- Dilip K. Bhattacharyya (1999), 'On the Economic Rationale of Estimating the Hidden Economy', Economic Journal, 109 (456), June, F348-F359 -- Era Dabla-Norris and Andrew Feltenstein (2005), 'The Underground Economy and its Macroeconomic Consequences', Journal of Policy Reform, 8 (2), June, 153-74 -- M.E. Streit (1984), 'The Shadow Economy: A Challenge to the Welfare State?', Ordo Yearbook, 35, 109-19

Spätestens seit dem 11. September 2001 ist der Terrorismus weltweit in den Blickpunkt der Öffentlichkeit geraten. Mit dem verstärkten Auftreten des fundamentalistischen Terrors wuchs auch die Berichterstattung in den Medien und die Literatur aus diesem Bereich ist kaum mehr überschaubar. Trotz dieser Informationsfülle kommt das notwendige Orientierungswissen für den Leser häufig zu kurz. Das vorliegende Buch stellt in knapper und verständlicher Form Entwicklungstendenzen, Motive sowie gesellschaftliche und ökonomische Auswirkungen des Terrorismus dar. Unterschiede und mögliche Parallelen zwischen Terrororganisationen und kriminellen Organisationen werden erläutert und die Finanzierung des Terrors anhand ausgewählter Beispiele näher untersucht. Schließlich zeigen die Autoren, dass der Terrorismus eine Erscheinungsform unserer zunehmend komplexer werdenden Welt ist und schlagen neue Lösungsansätze zur Bewältigung des Phänomens vor.

Estimations of the size and development of the shadow economy for 145 countries, including developing, transition and highly developed OECD economies over the period 1999 to 2003 are presented. The average size of the shadow economy (as a percent of "official" GDP) in 2002/03 in 96 developing countries is 38.7%, in 25 transition countries 40.1%, in 21 OECD countries 16.3% and in 3 Communist countries 22.3%. An increased burden of taxation and social security contributions, combined with a labor market regulation are the driving forces of the shadow economy. Furthermore, the results show that the shadow economy reduces corruption in high income countries, but increases corruption in low income countries. Finally, the various estimation methods are discussed and critically evaluated. -- shadow economy of 145 countries ; tax burden ; tax moral ; quality of state institutions ; regulation ; DYMIMIC and other estimation methods