Subject This article discusses the development of a mechanism to counter the non-observed economy at the regional level. Objectives The article aims to justify the need to take into account regional specifics when developing preventive measures to counter the non-observed economy. As a case study, the article is considering the Russian Far East regions. Methods For the study, I used the methods of economic and statistical, and comparative analyses, and the quantitative rating methodology. Results The article shows the differentiation of the Russian Far East regions in terms of economic development and quality of life of the population, which helps distinguish the main growth factor of the shadow sector for each particular region. Conclusions A mechanism to counter the non-observed economy should be developed for each individual region taking into consideration, first of all, the main factor that determines the presence of a shadow sector in the structure of the official economy. When developing preventive measures, it is important to envisage certain actions aimed at restoring the connection between taxpaying and benefits from public goods consumption, which is supposed to be the regional authorities' responsibility.
Keywords: shadow economy, economic development, regional economy, quality of life, Russian Far East
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