SOCIO-ECONOMIC NATURE OF SHADOW ECONOMY AND CAUSES OF ITS DEVELOPMENT IN ENTREPRENEURSHIP

Abstract

The socio-economic nature of the shadow economy is revealed. The shadow economy has both positive and negative signs for the society; the possibility for the population to survive in conditions of economic crisis, reducing transaction costs authors refer to positive signs, and the destructive economic development to negative. The common (prohibitions and restrictions) and partial (high tax burden and inefficient system of its administration; numerous bureaucratic procedures; mistrust to the government institutions and the judiciary; corruption in all levels of the governance, etc.) causes of the shadow economy in entrepreneurship are disclosed. It is argued that the shadow economy is neither a sector nor a certain part of the legal economy, it can be in any sector of the legal economy closely interlaced with it, and therefore its limits cannot be clearly identified (determine) in the formal economy. The shadow economy is not possible to determine especially in the information society. The categories of the shadow economy and its structuring are suggested. It has been researched the historical roots of the shadow economy spread in entrepreneurship, and lie in the shadow of public-private partnership which carries interests of "civil servant-entrepreneurs" and allows to manage state resources and control market. Therefore, the shadow policy creates favorable conditions for the entrepreneurs to work in the shadow. At the same time, access to the shadow entails stricter regulation by the state. It is proved that corruption is a part of the shadow economy, not an independent phenomenon, so they should be research comprehensively and systematically. Instead of overcoming the shadow economy and its component - corruption has been suggested to establish favorable business environment for their unfavorable existence, that is to carry out deshadowing of the economy.

Keywords

• shadow economy
• corruption
• informal economy
• capital flight
• de-shadowing of the economy
• entrepreneurship