Hernando de Soto Polar
"Extra legal businesses are taxed by the lack of good property law and continually having to hide their operations from the authorities.  Because they are not incorporated, extralegal entrepreneurs cannot lure investors by selling shares; they cannot get low interest formal credit because they do not even have legal addresses.  They cannot reduce risks by declaring limited liability or obtaining insurance coverage.  In fact, the only 'insurance' available to them is that provided by their neighbors and the protection that local bullies or mafia are willing to sell them.  Moreover, because extralegal entrepreneurs live in constant fear of government detection and extortion from corrupt officials, they are forced to split and compartmentalize their production facilities between many locations, thereby rarely achieving important economies of scale.  With one eye always on the lookout for police, underground entrepreneurs cannot openly advertise to build up their clientele or make less costly bulk deliveries to customers."