A handbook of preventative approaches towards undeclared work

The current focus of state authorities is still heavily upon “deterring” undeclared work using measures that improve the probability of detection and the penalties imposed on those caught. However, this only deals with undeclared work once it has occurred. It is also important to prevent undeclared work from occurring in the first place. The aim of this handbook is to provide a compendium of the range of preventative approaches for tackling undeclared work available to economies. Four types of preventative policy measure are reviewed, namely: supply-side incentives; demand-side incentives; education and awareness raising; and modernizing formal institutions. The outcome is a series of recommendations for the Western Balkan economies: • There should be a shift away from resolving undeclared work after it has occurred and towards preventing undeclared work from occurring in the first place. • Consideration should be given to conducting pilot initiatives of various preventative measures (e.g., in a sector or geographical area) to evaluate their effectiveness. • Using such pilot initiatives, a “test, learn and adapt” evidence-based approach could be adopted. After a pilot (e.g., in a locality or sector), the results can be analyzed, and lessons learned. The follow-up initiative can then use what has been found to work in the pilot. This can again be analyzed, lessons learned, and adaptations made to make it even more effective.