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Hidden Economy

The hidden economy has as many facets and meanings as names. It is also known as “grey and black”, “underground”, “illegal”, “unrecorded”, etc. The informal economy exists in all countries – not only transition and developing but also EU and OECD member-states. And although it has different implications and effects in different countries, it always shows existing or future problems on the public – private interface of the economy – overregulation, lack of adequate control, lack of acceptance of formal rules, emerging new forms of business and social relations, etc. Failure to research and address properly the informal economy might have dire consequences for the political, social and economic development of a country. The hidden economy does not recognize national boundaries and can grow to be a camouflage to criminal activities. One could even argue that the informal sector in the EU accession countries is more organically related to that in the EU member-states than the official domestic economy. Hence, further research and current policy work is much needed to help governments and society better understand the informal economy nature and its implications for development on national and EU level.

Recognizing the specific importance of the problem to the country the Economic Program has started a number of initiatives to monitor and analyze the hidden  economy and to outline actions for curbing its negative implications. The economic team of CSD  has launched an European thematic network of academics, policy analysts, representatives of civil society and international organizations to provide local and EU policy makers with practical solutions to informal economy problems. Since 2016, the Economic Program experts support the work of the European Platform Tackling Undeclared Work.


all events

Tackling Undeclared Work and Hidden Economy in Southeast Europe: Improving Governance and Prosperity
The existence of undeclared work, hidden economy and corruption have been identified by the European Commission and other international and local agencies as a major barrier to enabling embedded economic prosperity in SEE. The sustained high-levels of the hidden economy in SEE, low trust in public institutions and, in some cases, ambiguous national identity, has resulted in changes in tax morale and lower revenues for governments. These were the key conclusions from the policy round table held by the SELDI initiative, Sheffield University Management School, UK, and the Center for Liberal-Democratic Studies (CLDS), Serbia. more »
Understanding Russian Influence in Central and Eastern Europe
CSD presented the Kremlin Playbook report at the Wilfried Martens Centre for European Studies in Brussels together with researchers from leading European think-tanks examining the malign Russian influence in Europe. CSD speakers debated how Russia has leveraged its economic presence to cultivate an opaque web of economic and political patronage across the region that the Kremlin uses to influence decision-making. more »
The Russian Economic Footprint in Central and Eastern Europe: Addressing Strategic Vulnerabilities in Hybrid Warfare
In the last decade, Russia has used a range of tools to amplify its economic footprint in Central and Eastern Europe and achieve its political goals. These were some of the issues discussed at an international conference in Sofia, co-sponsored by the NATO Public Diplomacy Division. more »
Defrauding the Bulgarian Public Procurement System: Prevention, Countering and Analysis of Corruption Risks
Despite the legislative and institutional progress, especially in terms of increased transparency and access to data, the public procurement (PP) sector in Bulgaria continues to be associated with high levels of corruption risk. The number of irregularities uncovered by the control bodies remains considerable. At the same time there is a lack of effective investigation, while criminal cases, involving PP, are still very limited and predominantly focused on the lower levels of governance. more »


all publications

GREY Policy Brief No. 4, 2017: Tackling Undeclared Work in Southeast Europe: Knowledge-Informed Policy Responses

GREY Policy Brief No. 3, 2017: Tackling Undeclared Work in Croatia: Knowledge-Informed Policy Responses

GREY Policy Brief No. 2, 2017: Tackling Undeclared Work in the FYR of Macedonia: Knowledge-Informed Policy Responses

GREY Policy Brief No. 1, 2017: Tackling Undeclared Work in Bulgaria: Knowledge-Informed Policy Responses

   Economic Program


European Platform Tackling Undeclared Work

The Informal Economy in the EU Accession Countries: Size, Scope, Trends and Challenges in the Process of EU Enlargement

Joining up the Fight Against Undeclared Work