Policy Measures to Formalize the Shadow Economy and their Effects on Economic Growth in Serbia

The shadow economy is one of the greatest challenges facing the Serbian economy; its consequences are manifest in tax evasion, market distortion, unfair competition, and inefficient resource allocation. In many transition countries, Serbia included, the shadow economy is a major obstacle to the development of a strong corporate sector and the creation of a functioning market economy. Although the shadow economy remains an important safety net for many individuals and households in Serbia, its adverse impact on employees, enterprises, and society as a whole far outweighs its advantages.

The aim of the research is to provide an evaluation of the shadow economy based on the results of the survey on shadow economy among 1200 formally registered firms and other relevant macro-economic data and to develop a strategy and specific recommendations that would help formalization of the shadow economy in order to improve the competitiveness of the Serbian economy and contribute to economic growth.

For more see the attached Policy Brief.

---

Policy Brief EN