Smuggling increases lockdown, or at least it used to. But I had seen players mention that illegal weapons can increase civil unrest.
In the case of black market trading (as opposed to smuggling missions) neither of these is true. Also something that a sub-forum would help with is keeping a wrangle on what's true and what's not.
Black Market trading has the following effects:
- Causes Economic Bust
- Increases your reputation with the faction who owns the black market
- Decreases the influence of the faction who owns the black market
It's the single most powerful way to destroy a target faction's hold on a system. My best result was dropping a target faction (who had less than 50% influence initially) in a population 1m-ish system down 11%. I won't make the claim that black market dealings only cause economic bust and don't cause Unrest/Lockdown, but in the time I've done this (and obviously pushed vast amounts of black market goods over the line) I've never caused a lockdown or civil unrest through black market trading. I've also made a Boom state system enter Bust pending overnight.
On the other hand, I've caused Lockdown very easily by killing System Authorities, and caused Civil Unrest equally easily by killing civilian ships belonging to the target faction. Obviously not the only ways to do it, but ways nonetheless.
However, proof positive, Black Market dealing overwhelmingly causes economic bust.