Government Budget Constraint and Underground Economy in Nigeria (2001 – 2015)

Abstract

The focus of this study was on Government Budget Constraint and Underground Economy in Nigeria between 2001 and 2015.  The study adopted descriptive survey research design. A sample size of 306 was purposively selected from both Federal and State civil servants in Nigeria. The data were analyzed using descriptive and inferential statistical methods. The study found that underground economy increases government budget constraint in Nigeria. The results showed that there is statistical significant relationship between government budget constraint and Underground Economy (r = 0.169, p<0.05) with beta coefficient of 0.173 (β = 0.173).

      The study therefore concluded that Underground Economy reduces tax revenue of the government and imposes a constraint on government expenditure.