Customize Consent Preferences

We use cookies to help you navigate efficiently and perform certain functions. You will find detailed information about all cookies under each consent category below.

The cookies that are categorized as "Necessary" are stored on your browser as they are essential for enabling the basic functionalities of the site. ... 

Always Active

Necessary cookies are required to enable the basic features of this site, such as providing secure log-in or adjusting your consent preferences. These cookies do not store any personally identifiable data.

No cookies to display.

Functional cookies help perform certain functionalities like sharing the content of the website on social media platforms, collecting feedback, and other third-party features.

No cookies to display.

Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics such as the number of visitors, bounce rate, traffic source, etc.

No cookies to display.

Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.

No cookies to display.

Advertisement cookies are used to provide visitors with customized advertisements based on the pages you visited previously and to analyze the effectiveness of the ad campaigns.

No cookies to display.

Is informality a barrier to economic growth in Uganda? Empirical analysis

By Stephen Esaku

We apply autoregressive distributed lag modeling approach to investigate the short- and long-run relationship between economic growth and informality in Uganda. We use annual time series data, covering the period from 1991 to 2017. We find evidence of short- and long-run relationship between economic growth and informality. The results indicate that an increase in informality significantly reduces the rate of economic growth in both the long- and short-run. This evidence seems to indicate that in low income countries where informality is high, a large size of the shadow economy is correlated with low rates of economic growth. This arises from the fact that informal businesses rarely pay taxes for their operations leading to low revenue collection by governments, which affects the provision of essential social services. We argue that the results of a negative relationship between economic growth and informality in both the long- and short-run are possible given the income level of the country under investigation. The practical policy implication from these results is that tackling low rates of economic growth requires also addressing the key drivers of informality in the country.

Source: SSRN

300 views