Tackling undeclared work in Central and East Europe: an evaluation of competing public sector management approaches

Abstract

To tackle undeclared work in Central and East Europe, the conventional bureaucratic public sector management approach has used the hard-direct controls of penalties and increasing the risk of detection. Recently, an alternative post-bureaucratic public sector management approach has emerged advocating soft indirect controls to improve tax morale and horizontal trust. Evaluating these competing approaches using evidence from Eurobarometer surveys conducted in 2007, 2013 and 2019 in six Central and East European countries, the finding is that both approaches significantly prevent undeclared work. The outcome is a call for a new ‘hybrid’ public sector management approach combining the two.