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Citation Information

Type Journal Article - Journal of Economy and its Applications
Title Combatting the undeclared economy in Montenegro
Volume 2
Issue 2
Publication (Day/Month/Year) 2012
Page numbers 40-62
This paper evaluates how undeclared work is being tackled in Montenegro. Reporting the
results of an e-survey and in-depth interviews with key stakeholders including senior
government officials, trade unions and employer representative organisations in
Montenegro, and comparing this with the same survey of 102 stakeholders in the 31
countries of the European Economic Area (EEA), the finding is that Montenegro not only
has a weak institutional infrastructure for tackling undeclared work but also pursues a
narrower range of policy measures for tackling undeclared than the average EEA country.
The outcome is a call to establish a single agency or central committee to better
coordinate the fight against undeclared work in Montenegro as well as for a shift away
from the current focus upon deterrence and for more attention to be paid to a wider range
of measures that enable undeclared work to move into the declared economy. These,
however, are not the only or even most important changes required. Montenegro also
needs to modernise its work and welfare regime through higher levels of expenditure on
state intervention in the labour market and social protection, coupled with redistribution
via social transfers so as to construct a more equal society, especially in relation to the
under-developed northern region. Unless such an approach is pursued then it is likely to
remain difficult to make further headway in tackling undeclared work.

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