Analysis Of Shadow Economy In Russia

Shadow economy is a phenomenon widely exists in the world, especially in Russia. Like Russia , China is switching to a market economy so that shadow economy is inevitable. By analyzing the shadow economy in Russia, this thesis attempted to understand Russia well and improve on our economic reform. The thesis includes 5 parts: The first part, airscape of shadow economy. Firstly, the definition of shadow economy. Shadow economy includes all economic actions that do not pay the tax, uncontrolled by government and are not brought into the GDP system. Secondly, analysis of the causation of shadow economy and it's function mechanism. Generally, the size of shadow economy is decided by the tax, the management of government, the profit margin, the employment status, the inflation, the consciousness of ratepaying and so on. Lastly, explanation of the necessity of shadow economy in Russia. The second part, the specialty of shadow economy in Russia. This includes about 4 aspects: firstly, complicated and confusing. Above all, No one knows the exact scale of shadow economy in Russia. In the second place, from politician, bureaucracies, entrepreneur to the common civilians , the shadow economy affects almost every fields of Russia economy. Finally, the causation of this phenomenon is special. Some economists think the high tax rate bring on the shadow economy, but, reducing tax rate did not reducing the scale of the shadow economy. Secondly, difficult to appraise, the function of shadow economy is under dispute in Russia. Thirdly, this phenomenon prevails in Russia. A report of UN showed that Russia ranked second in the aspect of shadow economy. Fourthly, compared to USSR, the shadow economy in Russia has new characters. It's scale expands , it's organization form is fixed, unregistered companies constitutes it's principal part, furthermore, the interrelation of shadow economy is different to before. The Russia shadow economy in form mainly includes gray economy, brown economy and black economy. Gray economy is legal economy but for the purpose of tax evasion, it's product and service are not brought into official Stat. Brown economy is obtaining or transferring something that is related to "black money", such as making a false report, cheat, speculation, embezzlement and so on. Black economy is every type illegal activities. Black economy in Russia mainly includes producing and selling weapons, ammos and drugs secretly; keep gambling grounds or brothels illegally. The third part, the reason of increase in Russia shadow economy. Shadow economy in Russia partly comes from the heritage of USSR. From 1970's to the early 1980's , the shadow economy in USSR is not the "avocation", but economic institution of USSR society. So the shadow economy can not disappear immediately even in the best condition. In the course of economic reform, 6 main factors lead to the expansion of shadow economy in Russia. Firstly, the collusion of politicians and entrepreneurs. In the course of reform, entrepreneurs rely on the politicians and the politicians take their power as means of actualizing personal profit. Secondly, government intervention in economy. In the course of reform, the country play the leading role. On the one hand, Russia keep many state-owned economy that can not limited by the economy and laws; on the other hand, the country intervene in economy excessively without any supervision mechanism. Thirdly, the exist of monopolization and the emergency of new monopolization. The country keep in direct control of many economic sections so that the monopolization mechanism leading to crimes come into being. Fourthly, the severe revenue...