An economy is considered where a possibility to seek rents (a particular case of this activity is corruption) exists along with production. A producer is able to hide part of his output from both bribery and taxation. It is shown that the presence of a shadow sector has different effects in...

The Soviet Union's collapse brought economic uncertainty to many Ukrainians. Approximately 20 percent of the population, 10 million people, currently survive on incomes below the state-set subsistence minimum figure. Given the unrealistic nature of this state-produced definition, “poverty”...