11th RSEP International Multidisciplinary Conference -- APR 09-11, 2019 -- Vienna, AUSTRIAWOS: 000471906200007The reduction and ultimately the elimination of the informal economy emerges as an important problem for the countries in terms of effectively collecting tax revenues, preventing unfair competition and increasing confidence for the state. Increasing economic freedoms contributes to the reduction of such economic activities. The aim of the study is to determine the effect of economic freedoms on informal economy for the member states of Organization of Islamic Cooperation (OIC). It covers annual panel data of 44 countries from 1999 to 2015. In the study, Fixed Effects and Random Effects Models are applied. The findings of the study point out that there was statistically significant and negative relationship between economic freedoms and informal economy. According to the results, one-point increase in Economic Freedom Index led to a nearly 0.13% reduction in the size of informal economy.Review Socio Econ Perspec
