Informal Economy Dynamics as an Important Factor Defining Level of Social Unease

Abstract

The paper suggests the hypothesis that increasing level of social unease which can be seen in the world since the start of Arab spring is directly related to dynamics of informal economy. Subsequently in the paper some other suggestions are tested, including relation between the level of social unease and level of economic freedom, interrelation between the level of corruption and social unease which were not proven to be true. Quantitative testing of the above mentioned hypothesis proved there is direct relation between dynamics of informal economy and level of social unease.Also the paper deals with the role of information accessibility, and it is defined that limitations of information access influence the informal economy dynamic's influence on social unease level. It is also suggested in the paper, and some argumentation is provided that current social unease is based on changing values and beliefs and informal economy dynamics is an important indicator of that process.

Theoretical Aspects of the Role of the Shadow Economy

“…The formal sector generates value from the informal sector in ways that block the existence of an unjust world system. This exploitative relationship between labour and capital metaphorically explains the persistence of the shadow economy (Godfrey, 2011); -neoliberal/legalist theory (Maiti & Sen, 2010), Khadiullina et al, 2013) states that the informal sector consists of micro-enterprises that prefer to operate illegally to reduce costs. This theory postulates that a significant element is a hindrance to growth due to lower productivity, limited investments, an inadequate and ineffective tax system, a low level of introduction of technological progress and complications caused by macroeconomic policies.…”