As a general rule, relative to its recorded or official economy, the less economically developed a nation is, the larger its underground, "shadow," or informal economy is.

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This is supported by empirical evidence and economic research. In less economically developed countries, the formal economy may be underdeveloped or inaccessible, and many workers and businesses may operate informally to avoid taxes, regulations, or other barriers to entry. This can make it difficult to measure the true size and activity of the economy, and can also have implications for economic development and policy.

As a General Rule, Relative to Its Recorded or Official