ISSN (print) - 0131-7652

ISSN (online) - 2686-7605

Vol. 53 No. 12 (2023)
Cover story: «Garages» and «Mirages»

Russia under Sanctions: Is Shadow Economy a Factor of Flexibility?

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  • Yu.V. Simachev,
  • A.A. Fedyunina,
  • V.A. Svetova
Yu.V. Simachev
National Research University Higher School of Economics
A.A. Fedyunina
National Research University Higher School of Economics
V.A. Svetova
National Research University Higher School of Economics
DOI: https://doi.org/10.30680/ECO0131-7652-2023-12-30-47

Published 2023-11-26

Keywords

  • sanctions; effects of sanctions; structural shifts; economic growth

How to Cite

1.
Simachev Ю, Fedyunina А, Svetova В. Russia under Sanctions: Is Shadow Economy a Factor of Flexibility?. ECO [Internet]. 2023 Nov. 26 [cited 2024 Nov. 21];53(12):30-47. Available from: https://ecotrends.ru/index.php/eco/article/view/4688

Abstract

The paper reviews the phenomenon of existence of shadow sector in national economies under the influence of economic shocks. On the basis of international experience, it is proved that the shadow sector does not always grow under the influence of crises and sanctions. It depends on the nature of the latter, the sectoral structure of the sector, as well as the attitude of the authorities to it and changes in regulation. It is shown that the impact on the shadow sector in the Russian economy during periods of structural crises (1990s, pandemic in 2020, sanctions in 2015 and 2022) was complex and multidirectional. The authors identify a set of conditions under which the shadow sector can soften the blow of economic shocks, among them: a wide coverage of small businesses, the possibility of labor transfer between the shadow and legal parts of the economy, low regulatory burden and the ability of businesses to adapt organizational models. The authors conclude that relatively mild regulation in the near-term perspective can create conditions under which the shadow sector can, with a moderate change in scale, become a stabilizer under sanctions pressure and a factor of flexible adaptation of the economy to new conditions.
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