INFORMAL ECONOMY AS AN EXPRESSION OF THE STATE FAILURE

The article deals with the phenomenon of second economy, underground or subterranean economy, unofficial economy, unrecorded economy, informal economy, cash economy etc., which has been assessed here as a function of a given mix of economic policies. This key concept is first defined, then analysed. The analysis contains quantitative date illustrating the scale of underground economy in Poland. Having catalogued the principal reasons for prevalence of informal economy. The analysis formulates policy orientated conclusions relating to specific areas where reform need be.