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Monitoring the hidden economy in Macedonia, Albania and Kosovo

12.02.2018 CRPM D4D IDM

Informal, parallel, clandestine, grey, underground, shadow, unregulated, subsistence, coping, non-monetized, alternative – whatever of these names one chooses to attach to the phenomenon of hidden economy, or traditionally called ‘grey economy’ in the region, there is a growing acceptance that at different scales the hidden economies are here to stay due to their resilient nature and adaptive capacities to changing political, legislative and economic environments.

Corruption seems to be the overarching topic surrounding the main factors defining the hidden economy landscape in the three countries. According to businesses ‘Corruption’ is the most important factor for the existence of the hidden economy according to 45.7% of businesses in Macedonia, 72.9% in Albania, while in Kosovo ‘Corruption’ is in second place (48.6%) just after ‘High tax burden’ (60%). Bribing, as a tool for corruption is one of the 11 hid- den economy practices explored by the conducted business surveys which indeed confirm the large extent of bribing with 1/3 of businesses in Albania (35.7%) and 1/4 in Kosovo (22.9%) and only 1/10 in Macedonia (8.6%) claiming these practice being used ‘constantly’ or ‘in most cases.’