The economic sector encompassing activities that are neither taxed nor monitored by a government, and are not included in that government’s Gross National Product (GNP); it is commonly referred to as the black market, grey economy, or shadow economy. Characterized by small-scale, often cash-based transactions, employment in this sphere often lacks formal contracts, worker protections, and social security benefits. Street vending, small-scale agriculture, and unregistered construction work serve as typical illustrations of this sector.
The significance of this economic sphere lies in its provision of livelihoods, particularly in developing nations where formal employment opportunities are limited. It can act as a safety net for vulnerable populations, allowing them to generate income and sustain themselves. Historically, this sector has grown in response to economic downturns, excessive regulation in the formal sector, and a lack of access to formal financial institutions.
