The underground economy or clandestine gathers three forms of very different activities:

• underground economy generated by the Moonlighting;
• economy generated by the economic frauds;
• economy generated by the criminal activities;

• it escapes from the economic and social rules and the intervention from the State;
• it does not give place to any Tax and social security deduction (tax or social);
• it distorts the play of the free competition compared to the legal activities, either because of their own activity - moonlighting -, or because of integration of naps coming from criminal or criminal activities, seeking to reinvest itself - money laundering.

In certain cases the regulation makes it possible to fight effectively against some practical, even if their applications can run up against morals, for example:

• the regulation of the casinos and the development of the offer of official plays at accessible prices - various lottos, lotteries and PMU - makes it possible to fight against the clandestine plays and bets;
• the suppression of the prohibition laws, with the the United States had made move back the Distillerie S clandestine;
• the tax amnesties encourage with the repatriation of funds invested abroad;
• in France, abrogation in 1984 of the old legislation on the inscription from abroad to the Register of the trades, allowed the creation of many artisanal companies;
• legalization and the catch of load by the public services of the practices of Avortement made it possible to integrate in the official economy this activity and to save many lives;
• In France, the regulation of the activities of Prostitution by king Saint-Louis had made it possible to avoid the worst, whereas the law Marthe Richard of post-war period against the closed houses had like first consequence to push back this activity in the underground economy;
• the legalization of the soft drugs and the free or quasi-free supply with the drug addicts of their Drug, would allow " casser" an important side of the market of the crime.

The existence of an important underground economy is before all the sign of a serious dysfunction of the formal economy or public services of the State. If the Moonlighting exists, it is that the official market of work knows rigidities which paralyze the development of the official employment or which prevents the access of them, that can as indicate as in certain fields, the real costs of work - wages more social contributions - became unbearable for the request. The dysfunction can be characterized by:

• the heaviness of the tax pressure which pushes the companies to flee the tax by creating an abstract activity;
• the slowness of the administrative rules which discourages any initiative of investment;
• social legislation on the minimum wage, the family benefits, or the equitable charges.
• the opening of the borders to the competition of the worldwide market.

It seems impossible to fight against the underground market with a guarantee of success by only repression - even in the old USSR where the economic fraud was punished capital punishment, the moonlighting and its thousand small easy ways were flourishing -, only larger a flexibility of the rules governing official employment allows an effective fight. In certain cases, only abstract work is able to ensure the services awaited by the market, for example:

• clandestine workshops of the clothes industry in Paris;
• street hawkers on the lines of public transport, selling objects of shoddy goods which the traditional trade do not manage any more to distribute.

See too

• Informal economy
• Black-market