An affirmative answer would, of course, be very comforting, and economic growth would be the best road to ensure the reduction of the gray economy. But this seems not to be the case for a number of reasons.
Reality shows that there is a significant chasm between the formal and the real rules of the game.
The structure and level of unofficial activities are closely tied to the regulations with which the government influences economic processes, such as employment, technical and health standards, provisions for the protection of domestic production, the distribution of government orders, consumer protection and so on. With the normalisation of a market economy in Croatia, the border between unofficial and official economies will be under the stricter influence of institutional and regulatory measures as imposed by the state, as well as the calculation of the costs and benefits which it imposes on individuals and companies. This does not leave much room for co-operative adherence to the formal rules. Deregulation Helps All of this has economic and political implications. And, unfortunately, we know too little about this - instead of analysing the behaviour of businesses and consumers, we rely on the newspapers and occasional reports from the tax, financial and other services.