Abstract
If the established rules are obeyed spontaneously in an economy, this increases economic efficiency since the uncertainties, monitoring costs and incentive problems induced by opportunism can be avoided. Opportunism will be increased by increasing the incentives for unlawful behaviour, however, and a slight increase in these incentives might cause a cumulative and self-nourishing breakdown of morals. The dangers of the growing shadow economy are louring here.
I would like to thank an anonymous referee for helpful hints.
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© 1985 Springer-Verlag Berlin Heidelberg
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Schlicht, E. (1985). The Shadow Economy and Morals: A Note. In: Gaertner, W., Wenig, A. (eds) The Economics of the Shadow Economy. Studies in Contemporary Economics, vol 15. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-88408-5_16
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DOI: https://doi.org/10.1007/978-3-642-88408-5_16
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