Informal Economies

2021 ◽  
Author(s):  
Ernest Aryeetey
Keyword(s):  
Informal Sector ◽  
Informal Economy ◽  
Poverty Reduction ◽  
New Technologies ◽  
Informal Employment ◽  
Policy Response ◽  
Economic Activities ◽  
Formal Economy ◽  
The Future ◽  
Informal Economies

The expressions, “informal economy,” “informal sector,” and “informal employment” reflect statistical terms and definitions used to describe various aspects of informality. They are the result of several decades of work to develop a framework that adequately represents the multifaceted nature of informality as it applies not only to developing countries, but also to other transition and developed economies. The informal sector is generally viewed as the set of activities of small unregistered enterprises, while informal employment refers to employment within the formal or informal sector that lacks any form of protection, whether legal or social.1 The informal economy is a broader concept that encompasses all of these elements in their different forms, including their outputs and outcomes. The many different views about the drivers and composition of the informal economy in Africa have influenced various prescriptions and policy responses. On the one hand, some have viewed informality as being inimical to investment and growth, given that the activities undertaken usually fall outside of official regulation and control. The policy response has, therefore, often been to clamp down on or formalize the activities and relationships within the informal economy. On the other hand, informality is sometimes viewed as critical for growth and poverty reduction, given that the informal economy is inextricably linked to the formal economy while also serving as an important source of livelihood for millions of people. As a result of this, some effort has recently gone into providing a more supportive environment to enhance productivity within the informal economy and minimize its inherent vulnerabilities in the last decade. In the face of increasing globalization and access to new technologies that will drive the future of work, there is concern about the future of informal economic activities. Whether new technologies lead to a decline or upscaling of the informal economy in Africa will depend on several elements. Technology will not only shape how informality in Africa is viewed, but will influence the kind of activities undertaken, its links with the formal economy, and ultimately, the public policy response, which will itself be shaped by advances in technology.

scholarly journals A Framework for Enhancing the Spatial Urban Form of Informal Economies in India: The Case of Krishna Rajendra Market, Bangalore

SAGE Open ◽  
2021 ◽  
Vol 11 (2) ◽  
pp. 215824402110231
Author(s):  
Shikha Patel ◽  
Raffaello Furlan ◽  
Michael Grosvald
Keyword(s):  
Informal Sector ◽  
Informal Economy ◽  
Urban Form ◽  
Spatial Planning ◽  
Economic Activities ◽  
Street Vendors ◽  
Street Vending ◽  
Informal Economies ◽  
Indian City ◽  
Planning Policies

The International Monetary Fund estimates that the Indian economy contributes over 8% to the global gross domestic product (GDP), making India the fifth largest economy in the world. However, the formal and informal sectors do not contribute equally to the national GDP, with over 80% of this total originating from the informal sector. Street vending, among other informal activities in India, is a vital contributor to the informal economy. Many scholars argue that despite the critical influence of physical urban patterns on the practicability and viability of informal activities, urban planners are not providing adequate urban planning policies. Bangalore, the third largest Indian city by population, is the subject of the present case study. Although this city hosts a wide variety of cultures, economies, and lifestyles, 74% of its population can be categorized as working in the informal sector. The goals of this research study are (a) to explore spatial planning in relation to the urban informal sector in Central Bangalore, (b) to identify the physical urban challenges experienced by the city’s street vendors, and (c) to examine the implications of these challenges for the city’s master plan. Through interviews, surveys, and site analysis (mapping), This study elucidates (a) the challenges experienced by the area’s stakeholders (i.e., vendors and buyers), (b) the limited planning of the spatial urban form by urban planners with regard to the accommodation of informal economic activities, and accordingly, (c) the need to implement spatial planning policies and design regulations appropriate to Bangalore’s high-density marketplace.

Knowledge Sharing between Local Government and Rural Remote Communities in Tanzania

2016 ◽  
pp. 1612-1631
Author(s):  
Chantal Philips ◽  
Wulystan P. Mtega ◽  
Arja Vainio-Mattila
Keyword(s):  
Pilot Study ◽  
Knowledge Sharing ◽  
Emergency Preparedness ◽  
Information Needs ◽  
Poverty Reduction ◽  
New Technologies ◽  
Local Context ◽  
Economic Activities ◽  
Remote Communities ◽  
Radio Broadcasting

Social, economic, and cultural factors are known to influence the knowledge sharing process between governments and rural communities. There is evidence that the success of ICT for development partnerships depends on a broadly identified “local context” and involvement of local communities. This chapter describes a survey of citizens about their information needs and modes of reception as well as a pilot study of Village Information Officers. Utilizing new technologies such as mobile phone communication and community radio broadcasting in local languages is identified by remote and rural study and survey participants as a valuable alternative to traditional government methods for communicating with citizens. Rural people identified gaps in knowledge related to health, education, and economic activities. These three broad categories of knowledge are important for effective poverty reduction efforts of government. Due to the poor reach of newspapers or other forms of print and broadcast media, face-to-face communication and cell phones were mentioned by more than 60% of the respondents in Kilosa district as techniques used in accessing government information. The positive results achieved by Village Information Officers in responding to gaps in knowledge regarding government services and support for development efforts has led to further demand for replication of the pilot study to support pastoralists, emergency preparedness, and wildlife conservation.

ENTREPRENEURSHIP AND THE INFORMAL ECONOMY: AN EMPIRICAL ANALYSIS

2016 ◽  
Vol 21 (02) ◽  
pp. 1650010 ◽  
Author(s):  
KAMELIIA PETROVA
Keyword(s):  
Empirical Analysis ◽  
Informal Sector ◽  
Informal Economy ◽  
Public Perception ◽  
Informal Employment ◽  
Financial Contracts ◽  
The Public ◽  
Business Regulations ◽  
Entrepreneurial Activities ◽  
Hiring Costs

This paper presents an empirical study investigating the effect of entrepreneurship on the incidence of informal employment. It builds upon economic models exploring the determinants of informal economy by analyzing the role played by institutions and policies and their effect on the informal sector. Among policies examined are payroll and severance taxes, labor and product market regulations, unemployment benefits, firing and hiring costs, enforcement of financial contracts and financial costs. The empirical analysis is based on a panel data approach. The main result of the paper supports the view that the informal sector is an “unregulated micro-entrepreneurial sector.” The findings suggest that differences in the level of entrepreneurial activities across developing countries are associated with variance in the incidence of informal employment, and that entrepreneurship has a positive effect on the informal sector. The incidence of informal employment is strongly affected by the public perception of government performance, role, accountability and effectiveness, as well as labor market and business regulations.

scholarly journals The Non-Work Of The Unimportant: The shadow economy of Nubian women in displacement villages

2019 ◽  
Vol 5 (Summer) ◽  
pp. 104-117
Author(s):  
Menna Agha
Keyword(s):  
Small Businesses ◽  
Shadow Economy ◽  
Meaning Of Work ◽  
Indigenous Culture ◽  
Economic Activities ◽  
Social And Cultural Capital ◽  
Formal Economy ◽  
Cultural Violence ◽  
Informal Economies

In my search for spatial resistance in Nubian resettlement villages, I found a trend of spatial hacks located inside and around the household, and purposed to facilitate a shadow economy dominated by women and their small businesses. Despite the recognized importance of informal economies in Africa (Kinyanjui 2014), Nubian women and their society do not qualify their profitable labor as work, partly because of their domestic location and partly because of their roots in an indigenous culture that recognizes the emotional – an undervalued aspect in the formal economy. In this paper, I first present empirical evidence of the significant role these women, and occasionally men, play in the economic health of Nubians after going through the hardships of displacement, by sustaining households as well as preserving Nubian indigenous culture. Second, I highlight the role of these economic activities in expanding the use of dwelling units designed by the state and reforming the built environment. Third, I challenge the ontologies of “work” that have been forced on Nubians as part of their displacement, and discounted their indigenous ontologies of labour. I do so by examining the meaning of “work” as a drive for social and cultural capital. The materiality of displacement and dispossession in the case of Nubians women has occurred semantically: the claim of modernization came accompanied with cultural violence and the discounting of women’s labour in the gendered configuration of meaning. This article argues for a feminist onto-epistemology of work – one that recognizes emotion and its position as a capital that is generated and circulated via resources of care, trust, and sense of community.

Knowledge Sharing between Local Government and Rural Remote Communities in Tanzania

2014 ◽  
pp. 195-214
Author(s):  
Chantal Philips ◽  
Wulystan P. Mtega ◽  
Arja Vainio-Mattila
Keyword(s):  
Pilot Study ◽  
Knowledge Sharing ◽  
Emergency Preparedness ◽  
Information Needs ◽  
Poverty Reduction ◽  
New Technologies ◽  
Local Context ◽  
Economic Activities ◽  
Remote Communities ◽  
Radio Broadcasting

Social, economic, and cultural factors are known to influence the knowledge sharing process between governments and rural communities. There is evidence that the success of ICT for development partnerships depends on a broadly identified “local context” and involvement of local communities. This chapter describes a survey of citizens about their information needs and modes of reception as well as a pilot study of Village Information Officers. Utilizing new technologies such as mobile phone communication and community radio broadcasting in local languages is identified by remote and rural study and survey participants as a valuable alternative to traditional government methods for communicating with citizens. Rural people identified gaps in knowledge related to health, education, and economic activities. These three broad categories of knowledge are important for effective poverty reduction efforts of government. Due to the poor reach of newspapers or other forms of print and broadcast media, face-to-face communication and cell phones were mentioned by more than 60% of the respondents in Kilosa district as techniques used in accessing government information. The positive results achieved by Village Information Officers in responding to gaps in knowledge regarding government services and support for development efforts has led to further demand for replication of the pilot study to support pastoralists, emergency preparedness, and wildlife conservation.

scholarly journals Formal Female Entrepreneurship and the Shadow Economy

2021 ◽  
Vol 13 (5(J)) ◽  
pp. 63-72
Author(s):  
Cassandra E. DiRienzo ◽  
Jayoti Das
Keyword(s):  
Informal Sector ◽  
Informal Economy ◽  
Business Models ◽  
Primary Objective ◽  
National Accounts ◽  
Formal Sector ◽  
Female Entrepreneurship ◽  
Data Set ◽  
Formal Economy ◽  
Barrier To Entry

Although female entrepreneurship yields products, markets, and business models that might not exist otherwise and are relevant to economic growth and development as well as issues related to gender equality, the factors that drive female entrepreneurship is largely understudied. The primary objective of this study is to examine the relationship between the size of a country’s informal sector and the prevalence of female entrepreneurship in the formal economy. This relationship is empirically tested using a regression analysis that employs a cross-country data set of 70 countries. The analysis results indicate a significant inverse relationship between the size of the informal sector and the prevalence of formal sector female entrepreneurship. It is argued that a larger informal economy implies a greater number of women working in the informal sector due to discriminatory barriers to the formal economy. Both formal sector entrepreneurship and work in the informal economy can lessen the barrier to entry women face related to work-life balance by allowing greater flexibility in work hours; however, employment in the informal sector is a relatively poor substitute to formal sector employment as informal sector work does not include benefits, nor is it taxed or included in official statistics. Policy recommendations for encouraging formal female entrepreneurship are made. Promoting female entrepreneurship in the formal sector not only helps to close gender, inequality gaps, but also serves to improve tax systems, lessen distortions in national accounts and official indicators, and improve the provision of public goods.

scholarly journals Automation, AI and the Future of Work in India

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Anita Hammer ◽  
Suparna Karmakar
Keyword(s):  
Labour Market ◽  
Informal Economy ◽  
State Policy ◽  
New Technologies ◽  
National Strategy ◽  
Content Type ◽  
Future Of Work ◽  
The Future ◽  
The Impact ◽  
Work And Employment

PurposeThis research contributes to current debates on automation and the future of work, a much-hyped but under researched area, in emerging economies through a particular focus on India. It assesses the national strategy on artificial intelligence and explores the impact of automation on the Indian labour market, work and employment to inform policy.Design/methodology/approachThe article critically assesses the National Strategy on AI, promulgated by NITI Aayog (a national policy think tank), supported by the government of India and top industry associations, through a sectoral analysis. The key dimensions of the national strategy are examined against scholarship on the political economy of work in India to better understand the possible impact of automation on work.FindingsThe study shows that technology is not free from the wider dynamics that surround the world of work. The adoption of new technologies is likely to occur in niches in the manufacturing and services sectors, while its impact on employment and the labour market more broadly, and in addressing societal inequalities will be limited. The national strategy, however, does not take into account the nature of capital accumulation and structural inequalities that stem from a large informal economy and surplus labour context with limited upskilling opportunities. This raises doubts about the effectiveness of the current policy.Research limitations/implicationsThe critical assessment of new technologies and work has two implications: first, it underscores the need for situated analyses of social and material relations of work in formulating and assessing strategies and policies; second, it highlights the necessity of qualitative workplace studies that examine the relationship between technology and the future of work.Practical implicationsThe article assesses an influential state policy in a key aspect of future of work–automation.Social implicationsThe policy assessed in this study would have significant social and economic outcomes for labour, work and employment in India. The study highlights the limitations of the state policy in addressing key labour market dimensions and work and employment relations in its formulation and implementation.Originality/valueThis study is the first to examine the impact of automation on work and employment in India. It provides a critical intervention in current debates on future of work from the point of view of an important emerging economy defined by labour surplus and a large informal economy.

The Economy of Undocumented Migration: Taxation and Access to Welfare

2010 ◽  
Vol 12 (2) ◽  
pp. 149-171 ◽  
Author(s):  
Mats Tjernberg
Keyword(s):  
Informal Economy ◽  
Welfare Policy ◽  
Social Benefit ◽  
Social Benefits ◽  
Undocumented Migrants ◽  
Economic Activities ◽  
Formal Economy ◽  
Social Welfare System ◽  
The Social ◽  
Social Contributions

AbstractA strict division between the formal economy and the informal economy cannot be made and every economic actor has in certain situations a propensity to engage in informal economic activities. The formal, as well as informal economy may lead to economic growth which is essential for a broad welfare policy, under which social benefits are categorized. A person’s economic contribution to a state should entail some possibility of getting economic and social benefits from it. The article shows that a person, who is liable to tax in a state, by staying in its territory, should not be excluded from the social welfare system. There is often a lack of congruence between tax liability and right to residence-based social benefits. A typical example is that of undocumented migrants. Welfare policy is to a large extent governed by a mix of rules linked to taxation, social contributions and social benefits. It could be expected that the policy be well devised, leading to well-coordinated systems. European states having a social policy with roots in a Beveridge model (such as Sweden), should be obliged to integrate undocumented migrants in their social benefit system. Regardless of any declared income they should be part of basic social benefits scheme by virtue of territoriality alone.

SOCIAL RESPONSIBILITY AMONG INFORMAL ENTREPRENEURS: EVIDENCE FROM MEXICO

2020 ◽  
Vol 25 (03) ◽  
pp. 2050021
Author(s):  
CRISTIAN E. VILLANUEVA ◽  
ADRIANELA ANGELES ◽  
LUZ CECILIA REVILLA
Keyword(s):  
Developing Countries ◽  
Social Responsibility ◽  
Mexico City ◽  
Informal Sector ◽  
Informal Economy ◽  
Developed Countries ◽  
Structured Interviews ◽  
Face To Face ◽  
Formal Economy ◽  
Formal Organizations

Social responsibility (SR) has been widely studied within formal organizations, especially in large companies in developed countries. However, studies about SR in the informal sector is still insufficient. Addressing this gap is relevant for developing countries where informality is becoming extensive and is growing faster than the formal economy. This research has two main objectives: (1) determine whether in an informal economy context, entrepreneurs could perform SR and (2) if it is possible to have SR, to examine critically the way informal entrepreneurs perform it. To achieve these objectives, this study conducted 50 face-to-face, semi-structured interviews with informal entrepreneurs (IEs) in Mexico City. The outcome of this research shows evidence that IEs can perform SR in an implicit form, despite their adverse and vulnerable conditions.

INFORMAL ECONOMY IN A DYNAMIC POLITICAL FRAMEWORK

2013 ◽  
Vol 19 (3) ◽  
pp. 578-617 ◽  
Author(s):  
Ceyhun Elgin
Keyword(s):  
Political Parties ◽  
Informal Sector ◽  
Political Party ◽  
Informal Economy ◽  
Public Capital ◽  
Formal Sector ◽  
Economy Model ◽  
Tax Rate ◽  
Formal Economy ◽  
Office Rent

I develop a dynamic political economy model with an informal sector and two political parties alternating in office. In equilibrium, if the incumbent political party faces a higher probability of staying in office, it sets a higher tax rate on the formal economy to invest more in productive public capital, while spending less for current office rent. Moreover, I argue that public capital is mainly utilized by the formal sector, and this implies that countries in which incumbent parties are more likely to stay in power have a higher tax burden but a smaller informal sector. I also present some empirical evidence that supports the main results of the model.

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