Growth in the Hidden Economy: The Case of Estonia

In order to study the growth of the hidden economy, two different approaches could be adopted. First it would be possible to draw on the experience of other states, former socialist states in particular, to try to define the role of the shadow economy by deploying statistical methods and opinion polling. Alternatively, the focus could be on the social background of the phenomenon and on the factors that facilitate the spread of the hidden economy. This study has adopted the latter approach as cogni-tively more important. It therefore does not set out to determine the specific scope of the shadow economy but to describe the potential reasons for its emergence in Estonian economic life. Being aware of the aspects of life and the economic spheres which are most exposed to hidden activities, it is possible to advise on policies aimed at curbing illegal activity.