Shadow Economy King

With global financial markets focused on the Greek economy and its weak public finances, many commentators have noted that some of the country's troubles stem from a large underground economy and spotty tax collection practices. We wonder:

Which major country has the highest share of legal economic activity that is deliberately hidden from the authorities?

A. Greece
B. Italy
C. Russia
D. China

The correct answer is C. Russia’s shadow economy, estimated at 46.6% of GDP, is at a significantly higher level than in Italy and Greece. Among fellow BRIC countries, Brazil also has a relatively large shadow economy at 39.9% of GDP, while India’s is at 23.6%. In comparison, China’s, at only 13.4%, is at the level of most West European countries.

Russia itself is outperformed by neighboring Ukraine, where the shadow economy, at 54.3%, is slightly over half the official GDP. Only some countries in Latin America and Africa have an even larger shadow economy.

The Marketplace Globalist Quiz is produced by Marketplace and The Globalist — and researched by The Globalist's Mike McCarthy.

The text of this Marketplace Globalist Quiz may not be reproduced in any form without the express written permission of The Globalist. Copyright © 2010 The Globalist.