FACTORS INFLUENCING THE LEVEL OF SHADOW ECONOMY IN LITHUANIA
FACTORS INFLUENCING THE LEVEL OF SHADOW ECONOMY IN LITHUANIA

Summary/Abstract: The shadow economy is an important indicator of the economy. The shadow economy is a multidimensional and ambiguously valued phenomenon, determined not only by economic but, to a large extent, both socio-psychological, legal and administrative factors. In practice, the main causes of this shadow economy are the following: tax burden, regulation, income and living standards, state support system, quantity and quality of public services, corruption, trust in authorities and institutions. The scale of the shadow economy varies considerably between European countries. It is estimated that the largest scale of the shadow economy is in Central, Eastern European and Southern European countries. The lowest in Western Europe and the Scandinavian countries. The purpose of this article is to evaluate factors influencing the level of shadow economy in Lithuania. Calculated in 2002-2010 Lithuania's relative dynamic indicators of the shadow economy, based on different methodologies, show that 20-33% of the Lithuanian economy is created in the shadow economy based on the countries added value.

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