Pros

High taxes and social security contributions and heavy regulation are the main drivers of the shadow economy.

Resources not being used in the official economy can be used in the shadow economy to increase overall supply of goods and services.

Opinions on how to deal with the labor force in the shadow economy differ widely.

Governments try to encourage firms to move out of the shadow economy by improving public institutions.

Fostering stronger popular participation in government decision-making, expanding elements of direct democracy, and eliminating corruption can also reduce the shadow economy.