Vol. 6 No. 2 (2013)
Articles

The Impact of Corruption and Hidden Economy on the Operation of the SME Sector

Published August 6, 2020
pdf (hun) (Magyar)

APA

Hegedűs, M. (2020). The Impact of Corruption and Hidden Economy on the Operation of the SME Sector. Economica, 6(2), 141–151. https://doi.org/10.47282/ECONOMICA/2013/6/2/4433

Corrupti on is a complex phenomenon related to hidden economy, which is also a barrier to economic development and hinders the outbreak from the crisis. Corrupti on is becoming a more sophisti cated instrument of hidden economies and is present in every country parallel to the ever intense accelerati on of our globalized world. Its extent depends on, among other things, economic dispariti es, social deformati ons, unequal burden-sharing, the rather ingenious forms of tax evasion, social morality, the country’s economic development, controlling mechanism and, more importantly, the subtle relati ons of economic crime with the prevailing powers. Hidden economy and corrupti on are interrelated phenomena. Uneven economic development, unemployment, social insecurity, contradicti ons of the legal regulati ons, and lack of transparency all provide an incenti ve to the violati on of ethical business practi ces, the exploitati on of the benefi ts of economic crime, the reinvestment of such profi ts into the business sphere and the appearance of corrupti on in the politi cal decision-making. Corrupti on is a social symptom, a subsistence constraint, a deviant form as well as a status security instrument, the mild (moral) judgment of which encourages parti cipati on in the hidden economy and economic crises. If the state or the politi cs seeks to infl uence the development of the economy and assumes excessive responsibility or procurer function, it diminishes the principle of public burdens and supports the expansion of corrupti on and the operati on of hidden economy at the sametime.