IMPACT OF THE INFORMAL ECONOMY ON DEVELOPMENT. What is the informal economy? Simply put, the informal economy refers to economic activities that are not taxed or controlled by a government and are therefore not included in that government's gross national product (GNP). However, in the literature, this phenomenon is discussed using different concepts such as informal, unofficial, irregular, second parallel, underground, gray markets, underground, hidden, invisible, unregistered, shadow, ghost and moonlighting. . Illegal or criminal activities such as drug trafficking or prostitution were excluded from this definition, as was the exchange of unpaid work. My article is therefore prepared with this omission in mind.Introduction“In many developing countries, unofficial economic activity (that carried out by unregistered businesses or by businesses registered but hidden from taxation) accounts for between a third and half of the total. This share declines sharply as the economy grows. Despite the scale of this unofficial activity, little is understood about its role in the economic development process, and in particular about the importance that the “formalization” of these hidden resources might have for economic growth. » (Rafael La Porta and Andrei Shleifer p. 1) Role of the informal economy on development A recent transnational report presented by authors Rafael La Porta and Andrei Shleifer published in the Brookings Papers in August 2008 aims to improve understanding of the relationship between economic development and the informal economy. The report distinguishes three alternative views on the role of the informal economy in development. The Romantic View: According to this view, informal businesses are either actually or potentially extremely productive, and are held back by taxes and government regulations, as well as a lack of secure property rights and access to financing. Until necessary legal reforms are made, “four billion people around the world are deprived of the opportunity to improve their lives and escape poverty because they are excluded from the rule of law” (United Nations, 2008, page 1). If barriers to entry into public service are lowered and capital is provided through microfinance, unofficial businesses will register, borrow, enjoy the other benefits of formal status, and in doing so, expand and will stimulate economic growth. The key aspect of this optimistic view is that unofficial businesses are fundamentally similar to official businesses, but kept in check by politics. In particular, unofficial businesses should resemble official businesses with respect to characteristics not affected by government policies, such as characteristics of entrepreneurs (e.g..