ABSTRACT
The informal economy was an integral part of the former Communist economies and is now also an important part of the transition economies in Central and Eastern Europe. This chapter considers the relative size and dynamics of the informal economy in different countries during the course of transition and the forms of participation in the informal economy. It draws upon a survey, the New Democracies Barometer (NDB) for the years 1992, 1994, 1996 and 1998. The chapter also considers the following countries: Poland, Czech Republic, Hungary, Slovakia, Slovenia, Croatia, FRY, Romania, Bulgaria, Belarus and Ukraine. The informal economy can lead to the reinforcement of the tendency to bend and break rules, including rising corruption and some examples of super-exploitation in situations where the rules of exchange are not transparent or governed by the rule of law. The chapter explores the role of households within different economies both comparatively and over time.
