Assessing the Scale of the Shadow Economy in the Republic of Karakalpakstan and Improving Mechanisms for Its Reduction
Year: 2026
Type: article
Abstract: This article assesses the scale of the shadow economy in the Republic of Karakalpakstan and proposes directions for further improving the mechanisms aimed at its reduction. Using a labour-resourcebased proxy indicator, the study derives estimates ranging from 11.2% to 11.7% for 2000–2022. These estimates should be interpreted with caution because the indicator does not directly measure unreported economic output. These estimates are compared with the results of a survey of enterprise managers and updated using official data for 2023–the first half of 2026. A log-linear regression model indicates that a 1% increase in electronic money turnover is associated with a 0.20% reduction in the estimated scale of the shadow economy, whereas increases in personal income tax revenue and the number of unemployed persons are positively associated with the model-estimated shadow economy. The study proposes criteria for classifying the regional shadow economy into natural, moderate, and elevated levels and compares inertial and target scenarios through 2030.
Author: Atadjanov, Kadambay Sapayevich
Institution: Urgench State University
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W7221358055
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