As a general rule, the underground economy in a country will be bigger when their is larger redtape.
Redtape refers to increased government regulation, formalities, taxation and bureaucracy that becomes a burder to the general consumer, small business person and larger corporations.
It can eventually prevent large companies from making investments, hinder free thinking, and actually encourage the growth of an underground 'black' economy.
Hence, for the government to reduce this under ground economy, they need to make government simple and effective for everyone.
