Klarita Gërxhani is Professor of (micro)economic sociology at the European University Institute, Florence, Italy. Her research is interdisciplinary, combining laboratory and field experiments with field surveys and economic-sociological theory. She is the author of many articles published in internationally peer-reviewed journals in economics and sociology, including Journal of Political Economy, Annual Review of Sociology, Social Networks, European Sociological Review, Experimental Economics, Social Science Research, among many others.
Keynote title: Formal and informal institutions: Understanding the shadow economy in transition countries
Abstract: This talk will provide an overview of my research on tax evasion and undeclared work in transition countries. My main contribution is both theoretical and empirical. From an institutional perspective, I argue that for a better comprehension of noncompliant activities, one should consider both formal and informal institutions simultaneously. Doing so is particularly relevant for transition countries, because institutional change has been a defining feature of their economies. Empirically, I combine observational with experimental data and examine the role of individuals' attributes and attitudes about institutions on their engagement in the shadow economy, as well as the outcome of such engagement. My main conclusion is that people's experience with the governing formal and informal institutions have important repercussions for the economy as a whole - a large shadow economy; for the state - large budget deficits and hence lower investments in public goods; for personal well-being; and finally, for the overall society via institutional trust and social capital.