The hypotheses for the project’s fundamental survey are derived from similar studies on the shadow economy and its manifestations in the social-economic life of Bulgarians today. Moreover, the research team will invest its prior methodological and research experience in this problematic field, formulating the following basic hypotheses:
1. Shady practices are assessed differently, depending on the socio-economic position held by individuals. That is why the assessments made by different categories of surveyed persons regarding the relative share of the shady sector will vary in a wider range: from 10-15% to 40-50% or more.
2. The basic factors and causes generating the shadow economy sector in Bulgarian society are the low effectiveness of institutions, super-regulation of economic activity, the shortcomings of legislation (complete absence of certain types of regulation and omissions/inconsistencies in the existing laws), the decreased function of the state to control compliance with laws, the inefficacy of the judicial system and the law enforcement organs, the lack of strict punitive measures, the striving for quick accumulation of profits, and the inclination of Bulgarians to bypass the laws.
3. Engaging in shadow economic activities is part of the ethos and the values of individuals. There are substantial differences in the attitudes of the three generations (youths, aged 15-35 years, people between 36 and 55, and people over the age of 55) to the shadow economy; this is reflected in their different degrees of willingness to engage in shady practices. Among young people, the key factor will be the dependency between the structure and the quality of the education system on the one hand, and their inclusion in the labour market on the other. Among middle-aged persons, the decisive factors will be the income level and the personal satisfaction with the achievement of goals significant for the individuals. Among people in pre-retirement and retirement age, the key factors will be the income level and the feeling of personal security.
4. The shadow economy creates economic, social and social-psychological preconditions for 1) aggravating the anomie (according to Merton) that spread through Bulgarian society in the years of radical transformation of economic relations (including property relations), of the political system and of public morals (stereotypes, evaluation models, models of perception and assessment of non-legitimate and inadmissible behaviour); 2) decreased trust in institutions and, based on this, the appearance of strong dispositions to tolerate shady practices; 3) increased deviant behaviour consisting in open use and involvement of shady economic practices, as well as experimenting with “flexible” business models that violate the laws; 4) maintaining high levels of tolerance for the shadow economy and tacit unwillingness to cooperate in limiting it; 5) severe distortion of supply and demand on the national and local labour markets, with the consequences this has for employment opportunities and income; 6) increased inequality resulting from illegitimate practices in the supply and demand of labour; 7) deteriorating relations between labour and capital resulting from the damage that shady practices do to both sides; 8) reducing social cohesion of Bulgarian society and intensifying mistrust between individuals.
5. The shadow economy will continue to be a widespread element of the Bulgarian economy, which explains the importance of rethinking the applied governmental approaches for reduction of the shadow economy practices, and elaboration of scientifically grounded policies for general prevention in this area.