Oday Ibrahim Abdulwahid (1), Mustafa Ali Ibrahim (2), Yasir Jihad Saeed (3)
Background: The black economy undermines fiscal sustainability and policy effectiveness in developing nations. Specific Context: Iraq faces structural challenges including weak governance, political instability, and high unemployment, exacerbating informal economic activities. Gap: Existing Iraqi studies lack rigorous quantitative measurements using advanced models. Aim: This study measures Iraq's black economy (2004-2023) using the MIMIC model. Results: Corruption, tax burden, unemployment, and political crises significantly expand the informal economy, while improved governance reduces it. Novelty: First comprehensive application of MIMIC model with integrated causal-indicator framework for Iraq. Implications: Findings inform evidence-based policies for institutional reform, tax system simplification, and financial inclusion to mitigate informal economic activities.Highlight :
Keywords : Shadow Economy, MIMIC Model, Iraq, Governance, Tax Burden, Corruption
A. Abdullah, H. Hassan, and M. Jasim, “The Expansion of the Informal Economy in Iraq: Causes and Implications,” Journal of Administration and Economics, vol. 8, no. 2, pp. 55–78, 2016. Available: [https://www.iasj.net](https://www.iasj.net)
F. M. Ajide, “Shadow Economy in Africa: How Relevant Is Financial Inclusion?,” Journal of Financial Regulation and Compliance, vol. 29, no. 3, pp. 297–316, 2021, doi: 10.1108/JFRC-05-2020-0045.
S. Al-Jubouri, “The Impact of the Informal Economy on Inflation and the Labor Market in Iraq,” Al-Qadisiyah Journal for Administrative and Economic Sciences, vol. 21, no. 3, pp. 200–224, 2019. Available: [https://www.iasj.net](https://www.iasj.net)
R. Al-Momani, “The Informal Sector and Its Impact on the Jordanian Labor Market,” Jordan Journal of Economic Sciences, vol. 5, no. 2, pp. 112–130, 2018. Available: [https://journals.ju.edu.jo](https://journals.ju.edu.jo)
N. Al-Obaidi, “Corruption and the Growth of the Shadow Economy in Iraq,” Iraqi Journal of Economic Studies, vol. 13, no. 1, pp. 90–112, 2021. Available: [https://www.iasj.net](https://www.iasj.net)
F. Al-Shehri, “Determinants of the Informal Economy in GCC Countries: A Panel Data Analysis,” Arabian Journal of Business and Management Review, vol. 10, no. 4, pp. 1–12, 2020, doi: 10.12816/0049353.
M. Benhabib, “Estimating Algeria’s Shadow Economy Using the Currency Demand Approach,” Algerian Journal of Economic Research, vol. 7, no. 1, pp. 55–70, 2019. Available: [https://www.asjp.cerist.dz](https://www.asjp.cerist.dz)
S. Bracking, “Black Economic Empowerment Policy in Durban, eThekwini, South Africa: Economic Justice, Economic Fraud and ‘Leaving Money on the Table’,” in Capitalism and Economic Crime in Africa, London, UK: Routledge, 2024, pp. 83–109, doi: 10.4324/9781003350196.
C. Challoumis, “Impact Factor of Liability of Tax System According to the Theory of Cycle of Money,” in Social and Economic Studies within the Framework of Emerging Global Developments, vol. 3, V. Kaya, Ed. Sofia, Bulgaria: St. Kliment Ohridski University Press, 2023, pp. 31–42.
D. A. Coldwell, R. Venter, and S. Maisela, “CSR Orientations in an Unequal, Dualistic Socio-Economic Situation: A Qualitative Analysis of Black-Owned South African SMEs,” in Approaches to Corporate Social Responsibility, Cham, Switzerland: Springer, 2023, pp. 196–214, doi: 10.1007/978-3-031-16450-3_11.
A. El-Bougha, “Measuring the Informal Economy in Egypt Using the MIMIC Model,” Journal of Economic Studies, vol. 42, no. 3, pp. 420–437, 2015, doi: 10.1108/JES-05-2013-0072.
J. Gordon-Nembhard, “Black Political Economy, Solidarity Economics, and Liberation: Toward an Economy of Caring and Abundance,” Review of Radical Political Economics, vol. 55, no. 4, pp. 525–538, 2023, doi: 10.1177/04866134231169345.
M. Hassan and F. Schneider, “Size and Development of the Shadow Economies of 12 MENA Countries from 1999 to 2013,” IZA Journal of Labor & Development, vol. 5, no. 1, pp. 1–28, 2016, doi: 10.1186/s40175-016-0059-4.
T. D. Logan, “American Enslavement and the Recovery of Black Economic History,” Journal of Economic Perspectives, vol. 36, no. 2, pp. 81–98, 2022, doi: 10.1257/jep.36.2.81.
L. Medina and F. Schneider, Shadow Economies Around the World: What Did We Learn Over the Last 20 Years? IMF Working Paper No. 18/17, Washington, DC, USA: International Monetary Fund, 2018. Available: [https://www.imf.org](https://www.imf.org)
F. Schneider and D. H. Enste, “Shadow Economies: Size, Causes, and Consequences,” Journal of Economic Literature, vol. 38, no. 1, pp. 77–114, 2000, doi: 10.1257/jel.38.1.77.
C. Sharma, “Estimating the Size of the Black Economy: New Evidence from India,” International Journal of Emerging Markets, vol. 14, no. 2, pp. 300–321, 2019, doi: 10.1108/IJOEM-01-2018-0037.
B. Sucipto, M. Yusuf, and Y. Mulyati, “Performance, Macroeconomic Factors, and Company Characteristics in Indonesian Consumer Goods Companies,” Riwayat: Educational Journal of History and Humanities, vol. 5, no. 2, pp. 392–398, 2022, doi: 10.24815/riwayat.v5i2.24112.
Z. Taylor and K. Stan, “Examining Faculty and Staff Salary Inequities Between Historically Black Colleges and Universities and Non-HBCU Institutions of Higher Education,” Research Issues in Contemporary Education, vol. 10, no. 1, pp. 1–15, 2025. Available: [https://files.eric.ed.gov](https://files.eric.ed.gov)
A. Vafadarnikjoo, H. B. Ahmadi, J. J. H. Liou, T. Botelho, and K. Chalvatzis, “Analyzing Blockchain Adoption Barriers in Manufacturing Supply Chains by the Neutrosophic Analytic Hierarchy Process,” Annals of Operations Research, vol. 327, no. 1, pp. 129–156, 2023, doi: 10.1007/s10479-021-04141-4.
E. Webster, “The Rise of Social-Movement Unionism: The Two Faces of the Black Trade Union Movement in South Africa,” in State, Resistance and Change in South Africa, London, UK: Routledge, 2022, pp. 174–196, doi: 10.4324/9780203720600