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Various methods of measurement are used to establish and present estimates of the size of the shadow economy in 76 developing countries, countries with economies in transition and States members of the Organization for Economic Cooperation and Development (OECD). From 1989 to 1993, the average size of the shadow economy as a percentage of gross domestic product (GDP) was 39 per cent in developing countries, 23 per cent in transition countries, and 12 per cent in OECD countries. An increasing burden of taxation and social security contributions combined with rising State regulatory activities are the driving forces behind the growth of the shadow economy. According to some findings, a growing shadow economy has a negative impact on official GDP growth, although other studies show the opposite effect.
