Underground Economy in Russia: the Size and Specific Features

Topics: Economy, Economics, Crime Pages: 32 (9329 words) Published: February 25, 2012



Underground Economy in Russia: the Size and Specific Features


Table of Contents

§1 The notion and essence of underground economy.3
1.1. Definition of underground economy4
1.2. Structure of underground economy5
§2 The history and peculiaruties of underground economy formation in Russia.6 2.1. Overall view on shadow economy in Russia.6
2.2. From Soviet underground economy to Russian.8
2.3. The dynamics of economic criminality.10
§3 The reasons of underground economy development in Russia. 10 3.1. Reasons for underground economy appearance. 10
3.2. Reasons for small enterprises to go underground.12
§4 Underground economy and its peculiarities in modern Russia. 13 4.1. Size of underground economy in modern Russia.13
4.2. The peculiarities of underground business and economic reforms in Russia. 15 §5 Socio-economic effects of underground economy in Russia.17 5.1. Tax and budget sphere.17
5.2. Money-and-credit sphere.18
5.3. Economic growth and investment process.18
5.4. Competition and effectiveness of money mechanism.20 5.5. Employment, reproduction of labour-power and labour productivity.20 §6 The struggle against underground economy.21
6.1. The ways of governmental influence on underground economy.21 6.2. Legal normative aspects of struggle against the criminalization of economy.23 6.3. The direction of struggle against underground economy.24 Conclusion24



One of the most discussed questions that is mostly absorbed by the attention of Russian publicity is the phenomenon of underground economy. Underground economy is a subject, which is very complicated for the research. That happens so due to many reasons. First, it is practically impossible to estimate the phenomenon of underground economy, because all the information on the subject is confidential and isn't to be made public. Secondly, shadow sector plays an ambiguous part, especially in a transition economy. On the one hand, its concealment from taxation increases competitive advantages of enterprises that take underground actions, allows to receive subsidiary earnings and curtails unemployment rate. On the other hand, underground sector functioning causes damage to state budget and marginally – to other economic agents that operate in the frameworks of law. However most investigators reckon underground economy as mainly negative phenomenon.

Nowadays, Russia is going through a very difficult period in its history, characterized by the unprecedented scale of fundamental reforms in political and economic systems. Some results in economic reforming are achieved: market infrastructure and market mechanisms of production stimulation are created, the phenomenon of goods shortage is eliminated and the positive balance of external trade is constantly provided.

The urgency of the chosen problem does not need special grounds. The weight and influence of criminal sector of economy cannot be underestimated. Underground economy has also a strong effect on the market economic system. It includes various kinds of economic activity, which differently influence economic development and economic safety of Russia. This impact is very large, and that's why shadow economy needs to be analyzed.

The objectives of my work are to define the overall influence of shadow economy on socio-economic phenomena and after-effects, to investigate its development. Some economists consider that the main reason of rapid growth of shadow economy in Russia is transition of bureaucratic command administrative system into market system.

Hence, the aim of my course work is to reveal the reasons of shadow economy development and the ways of its restriction in Russia. The materials of different Russian and foreign...
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