The overall objectives of the project are:
1) To generate fundamental knowledge, based on scientifically sound research methodology, on the causal factor determination of the “shadow economy”. While there is currently some theoretical research available on this issue, there is no empirically verified data avialable and no statistical proof for the factors and causes that give rise to shady practices in the Bulgarian economy.
2) Based on this knowledge, to develop relevant approaches and propose management measures and policies (incl. economic, financial, social and socio-psychological) to limit shadow economic practices in the medium and long term. Since 2015, the state has started introducing various measures to minimize shady practices, but these measures are not based on a comprehensive knowledge of the factors and causes leading to the emergence and proliferation of shady practices.
The idea of the project we propose is to use innovative research approaches to produce fundamentally new theoretical knowledge on the factor determination of the shadow economy and, based on this, to propose working solutions for minimizing shady practices. The research team’s prior experience shows that the shadow economy is an exceptionally heterogeneous and dynamic system, which includes heterogeneous practices that fulfill very different socio-economic functions. That is why popular assessments of the shadow economy are likewise diverse and quite contradictory (ranging from extreme rejection to tacit acceptance and involvement). In order to correctly understand factor determination of the shadow economy, it is necessary to go through a study of the motives of different groups of people to participate and engage in shadow economy practices. Previous studies of the shadow economy suggest that different generations of Bulgarians have different, specific attitudes to shadow economy practices. This fact makes it necessary that the study of the factor determination of the shadow economy be accompanied by a study of the differences in dispositions and attitudes of different generations towards shady practices. This specific emphasis in our project is important as a social-psychological key to understanding and adequately explaining the basic socio-economic consequences of the shadow economy.
Our team is also aware that attitudes towards the shadow economy is largely determined by the role/position of the individual in the system of relations of production (for instance, whether one is an employer, employee or self-employed) as well as by the possibility to be employed and the size of average annual income. These dimensions will be taken into account when analyzing intergenerational differences in attitudes towards the shadow economy.
In this sense, it may be said that our proposed project will have, conventionally speaking, three components: 1) an objective component, consisting in the study of the factor determination of the shadow economy, 2) a subjective component, consisting in identifying generational differences in the dispositions and attitudes of individuals towards the shadow economy, and 3) a prognostic component, consisting in identifying the most likely scenarios/tendencies in the practice of the shadow economy in Bulgarian society and proposing adequate approaches and policies for limiting the practices in question.