Evaluation of the Efficiency of Existing Tools for National Economy Unshadowing

Valentyna Levchenko, Anton Boyko (), Serhiy Mynenko and Artem Revenko
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Valentyna Levchenko: Kyiv National University of Technologies and Design, Kyiv, Ukraine
Anton Boyko: Sumy State University, Sumy, Ukraine
Serhiy Mynenko: Sumy State University, Sumy, Ukraine
Artem Revenko: Sumy State University, Sumy, Ukraine

Oblik i finansi, 2019, issue 4, 147-154

Abstract: Shadow economies exist to various degrees in almost all countries of the world. The level of shadowing of the Ukrainian economy is a key threat to the country's economic security. The financial and political instability, as well as the annexation of Crimea and the military conflict in the Donbas, activate the development of the shadow sector of the Ukrainian economy. The process of shadowing affects all economic areas, political and social life of the country, which is why government constantly need to improve methods and forms of combating the shadow economy in order to destroy its most dangerous forms for society. The purpose of the article is to evaluate the effectiveness of existing tools for national economy unshadowing based on the analysis of statistical information on the number of fines and other sanctions for non-compliance with tax legislation, the amount of confiscated property and currency as well as the size of the shadow economy, calculated using the International Monetary Fund method. In the course of the study, a block diagram of the algorithm for carrying out the correlation-regression analysis of the evaluation of the efficiency of existing tools for national economy unshadowing was developed, in particular, the following steps were identified: 1) formation of the input data set; 2) check for anomalous levels of the series and their exclusion; 3) normalization of the input data set; 4) correlation-regression analysis (linear regression formation and model quality determination). According to the study, namely the analysis of indicators of the determination coefficient, the Fisher F-test and the Student's test, the null hypothesis "coercive tools (in the form of fines and confiscation of property and currency) of Ukraine's national economy unshadowing lead to a reduction in the level of the shadow economy" is refuted and an alternative is accepted: that the selected state tools for national economy unshadowing are inefficient and do not lead to a reduction in the level of the shadow economy. To complete the reformation of the system of economy unshadowing, it was suggested to carry out preventive management and audit of the activities of financial intermediaries, since it is due to their services the financial resources are moving both in the real and shadow sectors of the national economy.

Keywords: shadow economy; unshadowing; regression analysis; efficiency of public administration; Ukraine's economy (search for similar items in EconPapers)
JEL-codes: H11 (search for similar items in EconPapers)
Date: 2019
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