The article deals with the phenomenon of the so called "grey", "shadow" or"twilight" economy, which has been assessed here as a function of a given mix ofeconomic policies. This key concept is first defined, then analyzed through theprism of its driving/growth factors. The analysis contains quantitative data illustratingthe scale of such factors in Poland (alongside international comparisons).Having catalogued the principal reasons for the prevalence of îshadow economicsî,the article endeavors to demonstrate the ramifications of economic activitybeing undertaken in the îtwilight zoneî. Such ramifications are likely to beof a positive and negative nature, however, the latter tend to be - by far - morestriking. The phenomenon has been viewed against a backdrop of the Polish economicframework, notably symptoms of over-regulation vis-à-vis the general businessenvironment, with particular references to over-fiscals. The analysis formulatespolicy orientated conclusions relating to specific areas where reform needbe initiated/advanced as well asdirections for further research findings in respectof the "shadow economy".