A Note on Measuring the Unofficial Economy in the Former Soviet Republics

Michael Alexeev and William Pyle

No 436, William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan

Abstract: This note argues that the most commonly used estimates of the size of the unofficial economies in the former Soviet republics are flawed. Most important, they are based on calculations that disregard the variation in unofficial economic activity across space in the pre-transition Soviet Union. In addition, these estimates appear to understate the size of the unofficial economies in these countries. We propose alternative estimates and find that they are more strongly related to the institutional factors commonly used to explain the size of the unofficial sector. Our estimates also show that the size of a country's pre-transition unofficial economy is an important predictor of its size during the transition. This suggests that the size of the unofficial economy is to a large extent a historical phenomenon only partly determined by contemporary institutional factors.

Keywords: A; Note; on; Measuring; the; Unofficial; Economy; in; the; Former; Soviet; Republics (search for similar items in EconPapers)
Pages: pages
Date: 2001-07-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (31)

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Working Paper: A Note on Measuring the Unofficial Economy in the Former Soviet Republics (2002)
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