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Explaining the Informal Economy in Post-Communist Societies: A Study of the Asymmetry Between Formal and Informal Institutions in Romania

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The Informal Economy in Global Perspective

Part of the book series: International Political Economy Series ((IPES))

Abstract

This chapter proposes a way of explaining the informal economy in post-communist economies. Drawing upon evidence from 1,027 face-to-face interviews conducted in Romania during 2013, using an ordinal logistic regression analysis this chapter reveals that participation in the informal economy arises when there is asymmetry between the norms, values and beliefs of citizens (informal institutions) and the codified laws and regulations (formal institutions), and that tackling the informal economy thus needs to focus upon changing not only informal institutions but also formal institutions in order to reduce this institutional asymmetry. How to achieve this in post-communist societies is then discussed.

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Acknowledgement

This work was supported by the Alexandru Ioan Cuza University of Iasi through Grants for young researchers, project code no. GI-2015-18.

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Authors and Affiliations

  1. Management School, University of Sheffield, Sheffield, UK

    Colin C. Williams

  2. Faculty of Economics and Business Administration, Alexandru Ioan Cuza University of Iași, Iași, Romania

    Ioana A. Horodnic

Authors
  1. Colin C. Williams
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  2. Ioana A. Horodnic
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Correspondence to Ioana A. Horodnic .

Editor information

Editors and Affiliations

  1. Dublin City University, School of Law and Government, Dublin, Ireland

    Abel Polese

  2. University of Sheffield, Management School, Sheffield, United Kingdom

    Colin C. Williams

  3. Alexandru Ioan Cuza University of Iași Faculty of Economics and Business Administration, Iași, Romania

    Ioana A. Horodnic

  4. Institute of Public Finance, Zagreb, Croatia

    Predrag Bejakovic

Appendix

Appendix

Table A1 Variables used in the analysis: definitions and descriptive statistics
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Table A2 Two-sample Wilcoxon rank-sum (Mann-Whitney) test
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Williams, C.C., Horodnic, I.A. (2017). Explaining the Informal Economy in Post-Communist Societies: A Study of the Asymmetry Between Formal and Informal Institutions in Romania. In: Polese, A., Williams, C., Horodnic, I., Bejakovic, P. (eds) The Informal Economy in Global Perspective. International Political Economy Series. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-40931-3_7

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