A CONCEPTUAL MODEL OF THE RELATIONSHIP BETWEEN SUSTAINABLE DEVELOPMENT AND THE SHADOW ECONOMY
Keywords:
sustainable development, shadow economy, informal economy, conceptual model, Sustainable Development Goals, institutional quality, fiscal channel, formalization, transmission mechanism, Uzbekistan.Abstract
This article analyzes the theoretical and methodological foundations of the interrelationship between sustainable development (SD) and the shadow economy (SE) and proposes an integrated conceptual model that explains their connection. The aim of the study is to characterize the influence of the shadow economy on the Sustainable Development Goals (SDGs) not as a one-directional effect, but as a bidirectional, multi-channel system moderated by the institutional environment. Drawing on an international empirical base covering the years 1991–2025 (data from Schneider, Medina, the IMF, and the World Bank) as well as on indicators from Uzbekistan's state statistics, the study employs comparative-analytical and conceptual-synthesis methods. As a result, five principal transmission channels linking the shadow economy with sustainable development (fiscal, labor-social, investment-productivity, institutional, and ecological) were identified, a four-state typology of the SD–SE relationship was developed, and twelve theoretical assumptions (hypotheses) were formulated. The model shows that the shadow economy serves a protective (shock-absorbing) function in the short term, while in the long term it acts as a factor constraining sustainable development. The findings have practical significance for designing public administration, fiscal-budgetary policy, and formalization strategies.
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