Heft36 1 - SFB 580 - Friedrich-Schiller-Universität Jena

AT THE ORIGINS OF INFORMAL ECONOMIES:
THE UKRAINIAN CASE
performed by different people. As the desire to
remain covert is often due to the incapacity of
the state to invite people out of extralegality
(Bovi 2001, de Cornelius and Lenain 1999,
de Soto 2002), illegal-legal transactions may
be illegal in a given moment (and context) but
potentially legal if only the state would modify
the legal framework – i.e. a businessman
whose company is not registered because the
registration procedure is too complex, or someone
importing a product that is temporarily
banned. Conversely, this classification excludes
covert operations that would be very difficult
to consider legal even by the most liberal government,
such as selling narcotics.
Another distinction between illegal-legal and
fully illegal may be found when examining the
beneficiaries of as well as those harmed by an
action. Smuggling, selling with no licence, or
failing to pay taxes may harm the state directly
but might benefit the fellow citizen, who is
able to buy things not available on the market
otherwise or simply at a lower price (Polese
2006). Citizens are, in this case, only indirectly
harmed as they may not benefit from services
the state might put at disposal with a higher
budget. However, actions like selling or
trafficking narcotics or burglary directly harm
the fellow citizen and the state (directly or
indirectly) and are harder to be considered
legal or even potentially-legal.
Potentially legal transactions are
page 204 ambivalently considered in literature
on post-Soviet transition. In Ukraine
there have been some efforts to
integrate informal economies in an economic
framework to understand their impact on the
economic transition (Kaufman 1994, Schneider
and Enste 2000) as well as explore whether
they can be integrated into the legal sphere of
economic life (Hussmanns 2004, Kaliberda
and Kaufmann 1997). However there is a
portion of the literature, in Ukraine as in other
former USSR republics, suggesting that we
can understand the reasons behind those informal
economies by understanding how they
work, the way people survive in post-socialism
(Humphrey 2002, Pavlovskaya 2004, Polese
2006, 2006b, 2006c, 2008, Wanner 2005) and
how, in particular, the relation state citizen may
affect the relevent action (Patico 2002, Polese
2008, 2010, Sebinova Peter 2005). This may
be due to the fact that people participate in a
whole range of economic practices on a daily
basis, many of which can be defined in noncapitalism
terms (Pavlovskaya 2004: 334). By
exploring not only the way the state address
citizen’s needs but also the perception of the
state by the citizens (i.e. whether or not they
feel their needs are met), we can understand the
way and the extent to which informal economies
are formed and the reason why they may
persist over time.
Informal economies, as explored in this paper,
seem to show a partially transitory or nonpermanent
nature. They exist because citizens
need to survive in their daily life and not
because of a desire for fullfillment through a
maximization of profits. In this we can see the
Weberian distinction between consumption and
acquisition (Schluchter Weber [1908] 1998)
that helps to narrow our sphere of investigation
to the consumption-oriented actions.
However, priority of consumer interests
normally characterize traditional economic
structures, which is in line with the fact that