nep-iue New Economics Papers
on Informal and Underground Economics
Issue of 2025–03–24
ten papers chosen by
Catalina Granda Carvajal, Banco de la República


  1. Unpacking Informality By Ilsa Meidina; Tanya Adi Putri
  2. Factors that Influence Global Value Chains: Evidence from the Manufacturing Sector in Kenya By Kinuthia, Bethuel Kinyanjui
  3. How Selling Online Is Affecting Informal Firms in South Asia By Bussolo, Maurizio; Dixit, Akshay Govind; Golla, Anne Marie; Kotia, Ananya; Lee, Jean Nahrae; Sharma, Siddharth
  4. The Impact of Womens Participation in the Labour Market on the Academic Performance of Children in Senegal By Ndoye, Mamadou Laye; Atchade, Touwede Benedicte
  5. Design of Partial Population Experiments with an Application to Spillovers in Tax Compliance By Cruces, Guillermo; Tortarolo, Dario; Vazquez-Bare, Gonzalo
  6. DET: Detection Evasion Techniques of State-Sponsored Accounts By Jacobs, Charity S.; Ng, Hui Xian Lynnette; Carley, Kathleen M.
  7. Understanding the Public Revenue System in Kenya: An Overview of the Tax System By Kiriga, Benson; Nato, Jacob; Remcho, Nathan; Eldrup, Magnus
  8. Cross-Border Exchange of Information and Tax Revenue Mobilization in Africa By Traore, Mohamed Lamine; Coulibaly, Seydou; Arvanitis, Yannis
  9. Leveraging Digital Services and Market Development for Financial Inclusion By Shinyekwa, Isaac, M.B.; Mpuuga, Dablin; Nattabi, Aida K.; Bulime, Enock W.N.
  10. Disability is no Inability: Promoting Financial Inclusion and Digital Financial Services for PWDs in Rwanda By Munyengera, Ggombe Kasim; Precious, Akampumuza; Seth, Kwizera

  1. By: Ilsa Meidina; Tanya Adi Putri
    Keywords: Social Protections and Labor-Employment and Unemployment Finance and Financial Sector Development
    Date: 2024–10
    URL: https://d.repec.org/n?u=RePEc:wbk:wboper:42230
  2. By: Kinuthia, Bethuel Kinyanjui
    Abstract: This study investigates the determinants of GVCs participation among manufacturing firms in Kenya. Using the propensity matching method and firm-level cross-sectional data from the World Bank Enterprise Survey (WBES) for the period 20072018, the analysis identifies key determinants across the entire manufacturing sector. These determinants are labour productivity, foreign ownership, firm size, website presence, generator use, and transport costs. Additional factors depend on the specific GVC definition applied. The study also reveals that smaller and female owned firms are more susceptible to business environment factors such as security, corruption, and competition with the informal sector compared to larger and male owned counterparts. Furthermore, the study examines factors that influence GVCs participation in the food and chemical sectors, highlighting sector-specific factors which can result in tailored policy recommendations.
    Date: 2024–11–27
    URL: https://d.repec.org/n?u=RePEc:aer:wpaper:206048e4-8485-44a6-9635-bd8b798d8e2b
  3. By: Bussolo, Maurizio; Dixit, Akshay Govind; Golla, Anne Marie; Kotia, Ananya; Lee, Jean Nahrae; Sharma, Siddharth
    Abstract: Understanding how e-commerce platforms are affecting the small, informal firms that sell on them is a question of growing importance to researchers and policy makers in developing countries. This paper examines this question using data from surveys of firms selling on two e-commerce platforms in South Asia. The businesses selling on these platforms range widely in terms of size, degree of formalization, and other characteristics. However, these firms -- even the micro and small ones, which tend to be informal -- are from a selected group, being owned and managed by individuals who are more educated and younger than the owners and managers of more typical firms in this setting. The sellers' main reason for joining the platforms is to access more customers. Most of the sellers report an expansion of their business after joining the platforms. They also report an increase in their incentive to register their business and their visibility to tax authorities. Other, less widespread channels of impact reported by the firms include the adoption of new or improved business practices and technologies, better access to finance, and greater flexibility in balancing home and work life. In general, these reported impacts do not vary significantly by firm size or degree of formalization, suggesting that even informal, small firms that have (selectively) joined e-commerce platforms can benefit from the greater market access facilitated by the platforms. Finally, given size and age, firms that have been selling on the platform for a longer period are more likely to experience these impacts, suggesting that firms learn how to use the platform more effectively over time.
    Date: 2023–02–14
    URL: https://d.repec.org/n?u=RePEc:wbk:wbrwps:10306
  4. By: Ndoye, Mamadou Laye; Atchade, Touwede Benedicte
    Abstract: This study sought a better understanding of the impact of a mothers participation in the labour market, on the academic performance of children in their primary school certificate examinations. The study used a recursive bivariate probit model in order to treat the endogeneity of the variable mothers participation in the labour market. The data used in the study were drawn from the Integrated Regional Survey on Employment and the Informal Sector (ERI-ESI-2018). The results demonstrated that a mothers participation in the labour market has a negative impact on the academic performance of children in their primary school years. These results inform us of the need to address the challenges faced by working mothers by providing them with the support they need to establish a balance between their professional and maternal responsibilities.
    Date: 2024–08–22
    URL: https://d.repec.org/n?u=RePEc:aer:wpaper:b7ec8a7a-740a-4dba-95a8-46f2807343c3
  5. By: Cruces, Guillermo (University of Nottingham); Tortarolo, Dario (World Bank); Vazquez-Bare, Gonzalo (UC Santa Barbara)
    Abstract: This paper develops a framework to analyze partial population experiments, a generalization of the cluster experimental design where clusters are assigned to different treatment intensities. The framework allows for heterogeneity in cluster sizes and outcome distributions. The paper studies the large-sample behavior of OLS estimators and cluster-robust variance estimators and shows that (i) ignoring cluster heterogeneity may result in severely underpowered experiments and (ii) the clusterrobust variance estimator may be upward-biased when clusters are heterogeneous. The paper derives formulas for power, minimum detectable effects, and optimal cluster assignment probabilities. All the results apply to cluster experiments, a particular case of the framework. The paper sets up a potential outcomes framework to interpret the OLS estimands as causal effects. It implements the methods in a large-scale experiment to estimate the direct and spillover effects of a communication campaign on property tax compliance. The analysis reveals an increase in tax compliance among individuals directly targeted with the mailing, as well as compliance spillovers on untreated individuals in clusters with a high proportion of treated taxpayers.
    Keywords: cluster experiments, randomized controlled trials, spillovers, partial population experiments, two-stage designs, property tax, tax compliance
    JEL: C01 C93 H71 H71 H26 H26 H21 H21 O23
    Date: 2025–02
    URL: https://d.repec.org/n?u=RePEc:iza:izadps:dp17692
  6. By: Jacobs, Charity S.; Ng, Hui Xian Lynnette; Carley, Kathleen M.
    Abstract: This study analyzes two covert Chinese bot networks, employing tweet-based and account-based methods to find detection evasion tactics. We reveal the use of message artifacts that disguise spam, engagement strategies that mimic human interaction, and behavioral patterns suggesting algorithmic control. We uncover bot maintenance practices and algorithmic account naming conventions. These insights demonstrate the evolving strategies of inauthentic digital personas, enhance our understanding of online disinformation campaigns, and inform the development of digital manipulation countermeasures. Comparing campaigns in 2021 and 2023, we discover that the techniques used by state-sponsored actors shifted from text-based to image-based techniques, indicating the increased sophistication of these actors to evade the detection algorithms of the social media platform. This work provides insight into the tactics of covert bot networks and discusses possible advancements in detection techniques.
    Date: 2024–06–01
    URL: https://d.repec.org/n?u=RePEc:osf:osfxxx:kzjbg_v1
  7. By: Kiriga, Benson; Nato, Jacob; Remcho, Nathan; Eldrup, Magnus
    Abstract: This paper provides a high-level analysis of Kenyas tax system, examining structures, performance, and potential reforms to enhance domestic revenue mobilization for economic development. Synthesizing data from national agencies, we identify the central challenges facing the tax systems in Kenya including compliance levels, a significant informal sector, and economic shocks. Our analysis underscores the need for data-driven policymaking, emphasizing Kenyas Medium-Term Revenue Strategy (MTRS) 2024-2027, aimed at reversing declining tax-to-Gross Domestic Product (GDP) ratios through a comprehensive modernization of the public revenue system. Our study further highlights major revenue streams such as income taxes and value added tax to show how a few taxes make up a large portion of domestic revenues and the urgency for optimization within these taxes. The stagnant or declining performance of many tax structures in Kenya reveal a need for comprehensive reviews and updates that enhance progressivity, encourage compliance, and raise revenues relative to GDP.
    Date: 2025
    URL: https://d.repec.org/n?u=RePEc:aer:wpaper:8051fe3a-63ff-4af7-962c-c592c90ac33b
  8. By: Traore, Mohamed Lamine; Coulibaly, Seydou; Arvanitis, Yannis
    Abstract: Tax evasion and avoidance generate distortions in tax systems and cause significant revenue losses for African economies. International cooperation is one of the most effective methods of combating tax evasion and tax avoidance. As such, many countries are participating in global initiatives toward the exchange of information between national administrations for tax purposes. This paper provides the first empirical evidence on the revenue effects of tax-related exchange of information for African countries. The regressions are carried out on a sample of 54 African countries on data from 1990–2020. The findings indicate that the exchange of information for tax purposes between national tax jurisdictions has a positive and statistically significant impact on tax revenue. The estimation results show that exchange of information could increase tax revenue collection by a magnitude ranging from 5 to 19 percent. These findings reiterate the importance of international cooperation for combating tax evasion and stimulating tax collection in Africa.
    Date: 2023–02–07
    URL: https://d.repec.org/n?u=RePEc:wbk:wbrwps:10299
  9. By: Shinyekwa, Isaac, M.B.; Mpuuga, Dablin; Nattabi, Aida K.; Bulime, Enock W.N.
    Abstract: The paper examines the extent to which digital financial services mobile money, online banking and agency banking contribute to financial inclusion in Uganda. We identify the key enablers and inhibitors of access and usage of digital financial services. To achieve this, we adopt a mixed methods approach and use the recent 2019/20 Uganda National Household Survey (UNHS) data, the World Banks Global Findex data for 2021, and insights from key informant interviews. We use an instrumental variable approach to control for endogeneity and run recursive probit models for the binary outcomes of usage of mobile money services, agency banking, and commercial banks. We also run models for access to commercial banks and usage of informal groups. The results re-affirm the gap between men and women in access to and usage of digital and formal financial services, although this gap has significantly reduced over time. We also find that informal financial groups are used more by women. Financial literacy proxied by an individuals ability to read and/or write is a significant enabler of digital financial services usage among both men and women. Conversely, saving money at home/secret place has a strong negative effect on the overall usage of digital financial services, but a strong positive effect on the usage of informal groups. The new financial inclusion strategy should provide incentives to the private sector to promote innovation and investment in a broad range of new, friendly, and affordable products to attract the excluded sections of the population. Importantly, cultural and community institutions provide better opportunity towards changing social norms that have for long disadvantaged women and kept them financially excluded
    Date: 2024–08–15
    URL: https://d.repec.org/n?u=RePEc:aer:wpaper:4de4e4dd-3a1b-4e3f-b54c-512739576595
  10. By: Munyengera, Ggombe Kasim; Precious, Akampumuza; Seth, Kwizera
    Abstract: As financial inclusion rates rise to cover 93% of the adult population in Rwanda, one in four adults with disabilities has no access to either formal or informal financial services. People with disabilities have lower rates of mobile money account ownership (46%) compared to those without disabilities (59%). Overall rates of bank service usage, including accounts owned by others, were 30% among persons with disabilities and 37% among those without disabilities. Informal services are an inevitable option for people with disabilities whose usage rate is higher (17.9%) than among the rest of the population (14.9%), with substantial cost implications, especially regarding credit. Supply-side constraints include the physical inaccessibility of most financial institution and mobile network operator (MNO) premises, a lack of products tailored to the special needs of persons with disabilities (PWDs), disability-insensitive service delivery channels, and negative stereotypes and discrimination among some financial service providers.
    Date: 2025
    URL: https://d.repec.org/n?u=RePEc:aer:wpaper:188fd537-66da-4037-9a2d-4177a704b14d

This nep-iue issue is ©2025 by Catalina Granda Carvajal. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at https://nep.repec.org. For comments please write to the director of NEP, Marco Novarese at <director@nep.repec.org>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.