A term often used in tandem with "informal economy" is "ungoverned space" meaning the geographic area where the activity occurs.

Generally, the more oppressive the government, the larger the presence of the "informal economy." Ironically, the usual stance of the U.S. (an allegedly free country) in such situations is to prompt the foreign government to capture and regulate the identified informal economy through heavy-handed police action. This informal economy is no secret to the foreign government. Even the foreign government officials make use of, almost entirely, the informal economy to make purchases for their own households.  Why pay full price, including tax and import fees, for the items you need?

The hustle and bustle of the stalls in the sprawling outdoor and sometimes indoor black markets represent freedom bursting onto the scene. They allow the otherwise oppressed inhabitants of the country to survive. It doesn't matter what you want, whether it be a new refrigerator or a pair of shoes, the informal market will provide it at a cheaper price. The "formal"  merchants tied to a building at a fixed street address are identifiable by the government and will be targeted for closure if they don't sell things with an official serial-numbered receipt, indicating that taxes have been paid.

Although farmers' markets, swap meets, flea markets, thrift stores, yard sales, and garage sales have increased over recent years in the U.S., they haven't reached the magnitude of the informal economy in third-world countries. They will get much bigger, when necessity requires it. People will choose to go "off the books" rather than die or subsist in abject poverty at the hands of an oppressive government.