Abstract

The article analyzes the quantitative relationship between the informal economy in the Soviet republics of the 1980s and the characteristics of the market economy in these republics after the collapse of the Soviet Union. Methodologically, the study relies on the logit, linear probability model and least-squares method. The logit and linear probability model are used to quantify the fixed effects affecting the attitudes of households in different countries in the 2000s to the market economy in comparison with the planned economy. The authors compare the obtained fixed effects with the size of the informal economy in Soviet republics of the 1980s using the least-squares method. The study shows a direct relationship between people’s involvement in the Soviet informal sector and their subsequent adaptability to the new conditions of the market economy after the collapse of the Soviet Union. Thus, the possible positive impact of the informal economy on the adaptation of the population to the market economy is empirically proved. The authors conclude that the Soviet informal economy helped facilitate households’ transition to the market economy and in the medium term had a positive impact on post-Soviet economic development.

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