MODEL OF CHOICES, INSTITUTIONS AND DIRECT DEMOCRACY QUASI-ECONOMIC FACTORS OF THE INFLUENCE OF UNDERGROUND ECONOMY

Abstract

Research in recent decades has shown that an analysis of underground economy from the limiting perspective of economic factors of influence is insufficient. Through an integrative approach it is opened the way to a multidisciplinary and multi causal understanding of all factors (economic, noneconomic, quasi economic) that influence the phenomenon of underground economy. The present work pleads for the analysis of the concept underground economy (multidimensional and composite) through the instruments of study: the choices, institutions and direct democracy. The model of choices express the decision of labor force to activate on the official labor market or to the illegal labor market in the context given by opportunities, preferences and constraints. Institutions defines the capacity of regulation  and implementation of government policies with implications in stimulating or discouraging economic subjects to hide activities in the sphere of underground economy. Direct democracy through its institutions (referendums, legislative initiatives) provides the political framework for the active involvement of the taxpayer as a voter or elector to a healthy and sustainable economic development. The results of active involvement of citizens consist in a more effective implementation of strategies and tax policies and a reduction of  incentives to escape in the sphere of economic informality.