The informal economy: penalty, correction or recovery?

The aim of this paper is to offer a general approach on concept of Informal Economy (EI). This approach compares a formalistic penalizing-corrective view of this concept with a critical view based on its potentialities and limitations. In the current context of crisis, there are several evidences which point to a significant increase of Informal Economy in Portugal. According to a formal perspective, Informal Economy can be explained depending on a cost-benefit logic. Its social consequences are related to several negative effects on national economy and state budget. According to a critic perspective, it is possible to identify its potentialities and limits in an unemployment and deactivation of social protection systems conjuncture. Through the comparison between these perspectives, the potential benefits of informal economy are considered in relation to the development of local communities.