Underground Economy in Russia: the Size and Specific Features

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TABLE OF CONTENTS

TABLE OF CONTENTS2

INTRODUCTION3

CHAPTER 1 The notion and essence of underground economy4
1.1Definition of underground economy4
1.2Structure of underground economy5

CHAPTER 2 Reasons for underground economy development and its history in Russia7 2.1Reasons for underground economy appearance7
2.2Reasons for small enterprises to go underground8
2.3From Soviet underground economy to Russian9

CHAPTER 3 Underground economy in modern Russia12
3.1Size of underground economy in modern Russia12
3.2Specific features of underground economy in Russia13

CONCLUSION17

ENDNOTES18

BIBLIOGRAPHY19

INTRODUCTION
The attention of russian publicity today is mostly absorbed to the phenomenon of underground economy. Underground economy is subject, which is very complicated for the research. This is the phenomenon which could be easily defined but can not be exactly estimated, because all the information, gained is confidential and is not to be made public. Underground economy is interesting, first of all, because of its influence on the passing of majority of usual processes and economic phenomena. This influence of underground economy in Russia is so large that it needs to be analyzed. Russia is going through very difficult period in its history, characterized by the unprecedented scale of fundamental reforms in political and economic systems. Quite real results in economic reforming are achieved: forming of market infrastructure and market mechanisms of production stimulation, the phenomenon of goods shortage is eliminated and the positive balance of external trade is constantly provided. At the same time the forming of market economy has called into being the number of negative phenomena and processes. One of them is the underground economy. It includes various kind of economic activity, which differently influence economic development and economic safety of Russia. The urgency of the chosen problem does not need special grounds. Weight and influence of criminal sector of economy has come to the line, beyond which the loss of public control over the direction of socio-economic and political processes is possible. In the conditions of criminalization of economy there exists demand for complex research of underground, illegal and concealed from accounting economic activity, as from the point of view of criminal law so from the point of view of economics. The structure and contents of the work provides the coverage of most important themes and questions. Material is lined up in appointed order. In the first chapter you can familiarize with the notion, essence, definition and structure of underground economy. In the second chapter the accent is made on the reasons of underground economy appearance and excursus into the history of russian underground economy. And finally in the third chapter the analysis of size and specific features of modern russian economy is carried out.

CHAPTER 1 The notion and essence of underground economy
On the way to disclosing the secrets of underground economy there arise obstacles, which are connected not only with the obvious lack of information for reliable estimation, but also with the conceptual difficulties like difference of understanding the phenomenon. There exists confusion in the usage of the terms: for example the underground (shadow) economy is often identified as informal economy or as criminal economy. Meanwhile it is important to separate them, because they define different segments of the market. 1.1Definition of underground economy

The widest notion has the term informal economy, which represents itself the aggregate of economic relations, which are not reflected in the official accounting and formal contracts. It consists of two parts. The first includes the segments, which blend with the existing legislation or at least are not contrary to it. The second is the underground economy, which is not reflected in the official...
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