In earlier studies of the informal sector, and in particular
in its association with small-scale, cottage and household manufacturing
industries (HM), this sector was commonly considered as economically
backward, low-income and offering few possibilities for raising
productive employment. Later studies, by Allal and Chutta (1982)
questioned this view , and noted, in addition, that informal activities
are an important source of income and employment for a large portion of
the population and will remain so over a long period to come and cannot
be neglected , therefore, in t he design of development policies. The
recognition of the importance of this sector has not removed two major
obstacles in the investigation of the sector: data and viable analytical
frameworks. Additional insight in the sector requires primary data
collection of an unregistered population, and developing an analytical
framework for studying settings with significant institutional
influences. ll1is paper reports on the collection of primary data and on
an analytical framework which were applied in a field survey of the
informal sector in the context of urban areas in Pakistan