Saminjonov Anvarjon Dilmurod ugl Bachelor student of tfi scientific supervisor

Socio-economic consequences of the shadow economy and the fight against it

Saminjonov Anvarjon Dilmurod ugl

Bachelor student of TFI

Scientific supervisor:

Senior Lecturer, Department of Economic Theory Qalandarov Ravshan

The shadow and criminal economy is today an integral element of the economic system. Negative consequences are inherent in all types and manifestations of the criminal and shadow economy. However, in some cases, some shadow processes also have some positive effects. These few situations are considered in the last part of the paragraph.

This section deals mainly with the negative consequences of criminalized shadow economic activity inextricably linked with the commission of socially harmful illegal acts. Under certain conditions, the criminal economy turns into a dominant, system-forming sector of economic relations, which determines the direction of development of the entire socio-economic system and creates the conditions for its functioning. In the most complex cases of criminalization, state institutions, government and administrative bodies, democratic institutions, a controlling and law enforcement system are also subjected to criminalization. There are cases when criminal economic activity becomes the basis of international specialization, which determines the country's place in the international division of labor. The specific socio-economic consequences of the criminal economy are extremely diverse as this activity is diverse and diverse. Consider its most significant consequences.

The negative consequences of shadow and criminal economic activity are manifested in various socio-economic deformations:

• tax deformation;

• deformation of the public sector;

• impact on the effectiveness of macroeconomic policies;

• impact on the monetary sphere;

• deformation of the structure of the economy;

• impact on economic growth and development;

• impact on the investment process;

• impact on the state of the environment;

• deformation of the consumption structure;

• influence on the competition regime and the efficiency of the market mechanism;

• impact on labor reproduction conditions

• impact on production efficiency and the division of labor;

• impact on the system of international economic relations;

One of the main "economic" claims to the shadow sector is the departure of entrepreneurs from taxes and the reduction of the tax base. This leads to lower budget revenues and limits the ability to finance important government functions.

Another important complaint to the shadow sector is the diversion of resources from the official economy and the reduction in the rate of economic growth in the legal economy. But is everything so simple and simple?

The negative consequences of criminal activity (for example, the production of drugs or the concealment and laundering of money on a large scale) are indisputable.

If we are talking about a small entrepreneur, producing completely legal goods and services, but working outside the formal system, then the negative is not so obvious. In any case, the resources used in such shadow activities lead to an increase in the production of goods and services. Moreover, some of them fall into legal circulation, too.

As international experience shows, the size of the shadow sector is closely related to the level of development of the country - its economy and institutions. The less developed the country, the higher the level of the shadow economy, as a rule. And vice versa. However, there is no 100% recipe for getting rid of this phenomenon.

In the United States and EU countries - countries with the highest levels of development and economic freedom - the size of the shadow economy is estimated at 5–20% of GDP.

Worldwide informal economy geography launchpad: