Determinants of the Informal Economy in MENA Economies

Abstract

Using data from a panel of 23 Middle East and North African(MENA) economies over the years between 1999-2015, thispaper examines the determinants of the shadow economy inthis region. Specifically, we reexamine the economic and socialvariables used in the cross-country empirical literature on theshadow economy and compare them with those of the MENAeconomies to identify similarities and differences betweenMENA countries and the rest of the world. Moreover, wediscuss key implications of the shadow economy in this setting.