SHADOW SECTOR OF NATIONAL ECONOMY (PROBLEMS AND PECULIARITIES)

Abstract

The formal and informal sectors of national economy are characterized in the article. The tools, which
regulate the system of economic relations, affecting basic economic indicators, key of which is a level of real
output, are considered. The paper concentrates on the problems of the national economy performance in the
context of shadow sector development and corruption component.
The general causes of the shadow economy occurrence and specific causes, typical for Russia (including
peculiarities of denationalization and privatization) are examined. Special attention is given to the corruption
component, which acquired in recent years a significant scale. The notion “corruption rent” as a consequence
of corruption practices is considered. The cause of its occurrence, related with the ownership of
scarce resources and as a result the formation of monopoly rent, is explained. The essence of system corruption,
caused by the conditions of closed monopoly, secured by various legal barriers and standard regulations,
is revealed. The chosen approach is based on the situation studied in economics when natural resources
are used and economic rent is created. The term “creeping” corruption, which reflects spreading of
this phenomenon to all types of economic activity and the economy sector, is used in the paper. The scheme
which contains comparative evaluation of formal and informal economy sectors with singling out the shadow
economy is developed. The place of corruption component in relation to the mentioned sectors is determined.
The list of features, identifying the “status” of corruption component (including the use of undervalued
assets; submit and get profitable state and municipal contracts) is formed. Besides, the formal economy
functions according to formal rules inside the formal institutional frames. The informal economy functions
outside the formal institutional frames, as well as the shadow economy. At the same time the corruption
component functions inside and outside the formal institutional frames, and consequently, projects to all
types of economic activity.