2019-02-15 Oleg Smirnov, <news:q453m6$qh2$1@os.motzarella.org>

> GDP is a useful indicator but it's still not fully reliable.
>
> The unaccounted economic turnover needs to be somehow estimated.
> I mean the deals people may have among themselves without notifying
> the state apparatus. Prevalence of such practices depends on how
> much people trust each other, and how much they tend to rely on the
> state in resolving disputes, - it's culturally specific.
>
> Ignoring of the unaccounted turnover understates the GDP, but on the
> other hand, a reliable technique to estimate its value in monetary
> units may be a non-simple thing.

Some controversial recent Russia news.

| <https://tinyurl.com/2s4x7ynw> newsreadonline.com
| | The deputy from the Communist Party of the Russian Federation
| Arefiev estimated the harm from the shadow economy in Russia at 136
| trillion a year .. "We are losing 136 trillion rubles a year -
| that's six annual budgets! If we divide this amount by the entire
| population of our country, together with newborns, it turns out that
| each person was robbed for one million rubles a year," the
| politician said .. The parliamentarian's reaction was caused by the
| published data of the International Monetary Fund (IMF) that the
| size of the shadow market in Russia is 38 percent of GDP ..

The MP's reasoning is beside the point. "Shadow market" doesn't mean
that the amount of this market is 'taken' from people, while it might
be 'given' to them. Various things contribute to the shadow market:
employers report to the state only a part of the salaries they pay to
their employees; shops report to the state only a part of their trade
turnover; organizations and private persons provide each other with
some services and report to the state only a part of the operations.

They pay lesser taxes and they get legal risks. If they pay taxes in
full they would have to set higher prices to their goods and services
to compensate it. The smaller shadow market is, the better it is from
the perspective of sanity and ability to control 'justice' and the
like, but even in the 'shadow' form it still contributes to the total
amount of goods and services, so if the above 38% claim is true, one
should multiply the Russia's GDP to 1.4 to get more realistic figure.

The fact of shadow market basically means that people don't tend to
consider the state 'honest' economic and regulatory actor, and in the
Russia's case it's likely rooted in the historical Soviet practices.
Throughout the Soviet time, government's manipulations with national
currency, government loans etc were not in favor of private interest.
Culmination moment of such a 'pragmatic' approach was the freeze of
bank deposits in the very Soviet end <https://tinyurl.com/2x4wm68u>.