Abstract

This study investigates the dynamics of Black Economy of the Quetta city, Balochistan. The city’s proximity to Iran and Afghanistan and highly porous borders coupled with the lack of good governance make it a highly conducive destination for informal business activities. Despite growing debates around the issue, the state of knowledge however does not provide a vivid picture of the composition of this market and its other myriads details. This study thus intends to contribute in this regard. It collects data through survey and highlights the many important details about the organization and composition of this sector of the economy. The study finds out the cigarette, petrol and Betel nuts constitute the dominant section of this economy. With the products mainly smuggled from Iran, Indian and Afghanistan. The study also finds out that generally a high profitability margin and relatively lesser degree of regulatory controls are the main attraction of this sector. Interestingly this study also found out that engagement in the informal sector of the economy largely runs through the family. Additionally, constrained opportunity environment in the formal sector also came across as a major structural condition that pushes people towards the black economy.