A sizeable proportion of worldwide economic activity remains unregistered, and escapes all forms of governmental control. Although a variety of terms have been coined to describe this widespread phenomenon, this session will rely primarily on the concept of “underground economies”, as it is the most comprehensive and consensual expressions commonly used to refer to unreported activities.

The underground economy comprises all exchanges of goods and services that are purposefully concealed from government regulatory and taxing agencies. Because of the way they are carried out, most underground activities are therefore illegal. However, it is important to note that some economic activities that can be deemed to violate the law in that they are hidden from official view may not be illegal by nature, and the definition of underground economies usually includes both legal (unreported income from food vendors on the street, baby-sitting off the books, etc.) and illegal forms of commerce (drug trafficking, arms trafficking, prostitution). Read more.