scholarly journals Explaining and tackling the informal economy: an evaluation of competing perspectives

2019 ◽  
Vol 2 (1) ◽  
pp. 63-75
Author(s):  
Colin C Williams
Keyword(s):  
Informal Economy ◽  
Policy Implications ◽  
Evidence Based ◽  
Social Actor ◽  
Face To Face ◽  
Partial Association ◽  
Values And Beliefs ◽  
Laws And Regulations

AbstractThis paper provides an evidence-based evaluation of the competing ways of explaining and tackling the informal economy. Conventionally, participants have been viewed as rational economic actors who engage in the informal economy when the benefits outweigh the costs, and thus participation is deterred by increasing the sanctions and/or risks of detection. Recently, however, an alternative social actor approach has emerged viewing participation to result from a lack of vertical trust (i.e., their norms, values and beliefs are not in symmetry with the laws and regulations) and horizontal trust (i.e., they believe many others are non-compliant). Reporting 2,000 face-to-face interviews conducted in Croatia in 2015, only a weak and partial association is found between participation in the informal economy and the perceived level of penalties and risks of detection, but a strong significant association with both the level of vertical and horizontal trust. Those who perceive a larger proportion of the population to be engaged in the informal economy, and those whose norms differ to the laws and regulations, display a significantly greater likelihood of participating in the informal economy. The theoretical and policy implications are then discussed.

scholarly journals AN INSTITUTIONAL THEORY OF INFORMAL ENTREPRENEURSHIP: SOME LESSONS FROM FYR MACEDONIA

2018 ◽  
Vol 23 (03) ◽  
pp. 1850019 ◽  
Author(s):  
COLIN C. WILLIAMS ◽  
SLAVKO BEZEREDI
Keyword(s):  
Informal Sector ◽  
Informal Economy ◽  
Poor Quality ◽  
Policy Implications ◽  
Social Actor ◽  
Face To Face ◽  
Values And Beliefs ◽  
Informal Entrepreneurship ◽  
Nationally Representative ◽  
Formal Rules

In recent years, a new institutionalist theory has emerged to explain the prevalence of informal sector entrepreneurship. This argues that formal institutional failures lead to the emergence of an asymmetry between the formal rules (laws and regulations) and the norms, values and beliefs of entrepreneurs regarding the acceptability of participating in the informal sector, which in turn leads to the prevalence of informal entrepreneurship. The aim of this paper is to evaluate this social actor approach by reporting evidence from 453 face-to-face interviews with a nationally representative sample of entrepreneurs in FYR Macedonia. This reveals not only a significant association between participation in the informal economy and the non-alignment of entrepreneurs’ views with the formal rules, but specific formal institutional failings that are significantly associated with the acceptability of informal entrepreneurship, namely poor quality public services, a lack of tax fairness, corruption and instability in the formal institutions. The theoretical and policy implications are then discussed.

scholarly journals Evaluating the Use of Personal Networks to Circumvent Formal Processes: A Case Study of Vruzki in Bulgaria

2017 ◽  
Vol 12 (1) ◽  
pp. 57-67 ◽  
Author(s):  
Colin C. Williams ◽  
Junhong Yang
Keyword(s):  
Policy Implications ◽  
Future Research ◽  
Face To Face ◽  
Income Groups ◽  
Personal Connections ◽  
Values And Beliefs ◽  
The Unemployed ◽  
Formal Procedures ◽  
Reporting Data

AbstractThe aim of this paper is to evaluate the prevalence and distribution of the use of personal connections to circumvent formal procedures by soliciting favours for and from others, known as vruzki, and how this can be explained and tackled. Reporting data from 2,005 face-to-face interviews conducted in late 2015 in Bulgaria, the finding is that 30 per cent of respondents had used vruzki in the 12 months prior to the survey, particularly when accessing medical services and finding a job. Estimating a logit model and then calculating the marginal effects, the population groups significantly more likely to have used vruzki are those whose norms, values and beliefs are not in symmetry with the formal laws and regulations, perceiving the penalties and detection risks as higher, those reporting their financial situation as very comfortable, and the highest income groups, but also younger people, the unemployed, and those living in larger households. The paper concludes by discussing the theoretical and policy implications along with the future research required.

ENTREPRENEURIAL DRIVE AND THE INFORMAL ECONOMY IN CAMEROON

2014 ◽  
Vol 19 (04) ◽  
pp. 1450024 ◽  
Author(s):  
CHRISTOPHER F. ACHUA ◽  
ROBERT N. LUSSIER
Keyword(s):  
Informal Economy ◽  
Developing Economies ◽  
Policy Implications ◽  
Future Research ◽  
Structured Interviews ◽  
Face To Face ◽  
Formal Economy ◽  
Curve Effect ◽  
Street Corner ◽  
Do So

There is a growing appreciation for the value and impact of the informal economy on the lives and livelihood of many in developing economies. A key question for researchers has been whether those operating in it do so out of necessity or voluntarily as opportunity seekers? Unlike previous studies that have examined the informal economy as one large block, this paper took a slightly different tangent. First, we analyzed and identified three distinct sub-groups within the informal entrepreneurial sector — the street walker (st. walker), the street corner (st. corner) and store owner (st. owner) — and then examined each group's motives. Reporting the results of face-to-face structured interviews with 200 informal entrepreneurs in Cameroon (West Africa), the finding is that the majority, especially st. walker and st. corner informal entrepreneurs, are predominantly necessity-driven while st. owner entrepreneurs are predominantly opportunity-driven. Our study also revealed a progression pattern whereby st. walkers do progress to st. corner and ultimately to st. owner entrepreneurs. The assumption is that this does create a learning curve effect in the entrepreneurial abilities and effectiveness of store owners. This is an area for future research. There are policy implications for institutional support that can grow the informal economy into the formal economy.

scholarly journals Evaluating policy approaches for tackling informal entrepreneurship

2019 ◽  
Vol 26 (4) ◽  
pp. 595-611 ◽  
Author(s):  
Ioana Alexandra Horodnic ◽  
Colin C. Williams
Keyword(s):  
Informal Economy ◽  
Small Businesses ◽  
Social Actor ◽  
Actor Model ◽  
Tax Morale ◽  
Content Type ◽  
Face To Face ◽  
Economic Actor ◽  
Informal Entrepreneurship ◽  
Eastern European Countries

Purpose When tackling the informal economy, an emergent literature has called for the conventional rational economic actor approach (which uses deterrents to ensure that the costs of undeclared work outweigh the benefits) to be replaced or complemented by a social actor approach which focusses upon improving tax morale. The purpose of this paper is to explore the effectiveness of these two policy approaches in reducing informal sector entrepreneurship. Design/methodology/approach To evaluate this, data are reported from a 2015 representative survey involving 1,384 face-to-face interviews with owners or managers of small businesses in three South-Eastern European countries, namely, Croatia, Bulgaria and FYR Macedonia. Findings The findings provide support for the “social actor” approach and display that small businesses have a greater propensity to perceive competitors as operating informally when the level of tax morale is lower. Meanwhile, no support for the deterrence measures of the “rational economic actor” model is reported. Research limitations/implications The major limitation of the study is that the paper is not able to display the reasons for the low level of tax morale and horizontal trust. Therefore, further in-depth qualitative research is necessary to explain whether and how the low levels of trust are determined by the failures of various formal institutions. Originality/value This is the first known study on small businesses which analyses simultaneously two distinct policy approaches that aim to reduce participation in informal entrepreneurship.

Cross-country variations in the participation of small businesses in the informal economy

2016 ◽  
Vol 23 (1) ◽  
pp. 3-24 ◽  
Author(s):  
Colin C Williams ◽  
Ioana Alexandra Horodnic
Keyword(s):  
Informal Economy ◽  
Small Businesses ◽  
Informal Institutions ◽  
The European Union ◽  
Formal Institutions ◽  
Content Type ◽  
Face To Face ◽  
Cross Country ◽  
Laws And Regulations ◽  
Civic Morality

Purpose – The purpose of this paper is to advance a new explanation for cross-country variations in the participation of small businesses in the informal economy. Drawing upon institutional theory, it proposes that the greater the asymmetry between the codified laws and regulations of formal institutions (state morality) and the unwritten socially shared rules of informal institutions (civic morality), the greater is the propensity of small businesses to participate in the informal economy. To analyse this, the extent to which small businesses evade payroll taxes by paying employees an undeclared (envelope) wage in addition to their official declared salary is analysed. Design/methodology/approach – To evaluate this, data are reported from a 2013 Eurobarometer survey involving 5,174 face-to-face interviews with employees in small businesses across the 28 member states of the European Union (EU-28). Findings – The finding is that small businesses display a greater propensity to engage in this informal wage practice in countries where there is a higher degree of asymmetry between the codified laws and regulations of formal institutions (state morality) and the unwritten socially shared rules of informal institutions (civic morality). A multi-level logistic regression analysis reveals these to be countries which have lower qualities of governance, lower levels of taxation and intervention in the labour market and less effective social transfer systems. Research limitations/implications – The major limitation of this study is that it has only examined whether employees in small businesses receive informal wages. Future cross-country surveys should analyse a wider range of ways in which small businesses participate in the informal economy such as under-reporting turnover. Originality/value – This is the first known analysis of cross-country variations in the participation of small businesses in the informal economy.

scholarly journals EXPLAINING VARIATIONS IN THE COMMONALITY OF INFORMAL SECTOR COMPETITION ACROSS LATIN AMERICAN AND THE CARIBBEAN COUNTRIES

2019 ◽  
Vol 24 (01) ◽  
pp. 1950002 ◽  
Author(s):  
COLIN C. WILLIAMS ◽  
BO LIU
Keyword(s):  
Political Economy ◽  
Latin American ◽  
Informal Sector ◽  
State Intervention ◽  
Policy Implications ◽  
Liberal Theory ◽  
Probit Regression ◽  
Values And Beliefs ◽  
Latin American And Caribbean ◽  
Laws And Regulations

To advance understanding of the relationship between entrepreneurship and the informal sector, the aim of this paper is to evaluate and explain variations in the extent to which formal enterprises witness competition from unregistered or informal enterprises across Latin American and Caribbean countries. Reporting World Bank Enterprise Survey (WBES) data on 31 Latin American and Caribbean countries, this reveals that two-thirds (65.5 percent) of formal enterprises witness competition from informal sector enterprise. To explain the cross-country variations, four competing theories are evaluated, which variously view the prevalence of the informal sector to be determined by either: economic under-development (modernization theory); high taxes and state over-interference (neo-liberal theory); too little state intervention (political economy theory), or an asymmetry between the laws and regulations of formal institutions and the unwritten socially shared rules of informal institutions (institutional theory). A probit regression analysis confirms the modernization, political economy and institutional theories, but not the neo-liberal theory. Beyond economic under-development, therefore, it is too little state intervention and whether the laws and regulations developed by governments are in symmetry with the norms, values and beliefs of entrepreneurs. The paper concludes by discussing the theoretical and policy implications of these findings.

scholarly journals Explaining and Tackling Under-Declared Employment in FYR Macedonia: The Employers Perspective

2018 ◽  
Vol 13 (2) ◽  
pp. 19-31 ◽  
Author(s):  
Colin C. Williams ◽  
Slavko Bezeredi
Keyword(s):  
Strong Association ◽  
Probability Of Detection ◽  
Policy Implications ◽  
Social Actor ◽  
Social Contributions ◽  
Laws And Regulations

Abstract The aim of this paper is to evaluate how employers who illegally under-report their employees’ salaries to evade paying the full tax and social contributions owed can be explained and tackled. These employers have been conventionally explained as rational economic actors doing so when the benefits outweigh the costs, and thus the solution is to increase the sanctions and/or probability of detection. An alternative social actor approach, however, explains employers as under-reporting salaries because of their lack of both vertical trust (i.e., their beliefs are not in symmetry with the laws and regulations) and horizontal trust (i.e., they believe many others are non-compliant). Reporting a 2015 survey of 450 employers in FYR Macedonia, the finding is that there is no strong association between employers under-reporting salaries and their perceived level of penalties and risks of detection, but a strong significant association with both their level of vertical and horizontal trust. The theoretical and policy implications are then discussed.

scholarly journals Evaluating competing public policy approaches towards the informal economy

2016 ◽  
Vol 29 (4) ◽  
pp. 365-380 ◽  
Author(s):  
Colin C Williams ◽  
Ioana Alexandra Horodnic ◽  
Lynda Burkinshaw
Keyword(s):  
Informal Economy ◽  
Design Methodology ◽  
Social Actor ◽  
Content Type ◽  
Face To Face ◽  
Economic Actor ◽  
The Uk ◽  
Practical Implications ◽  
Do So

Purpose – Conventionally, participation in the informal economy has been explained by viewing citizens as rational economic actors participating when the pay-off is greater than the expected cost of being caught and punished, and thus tackled by raising the sanctions and risks of detection. Given that many citizens do not engage even when the benefits outweigh the costs, a new social actor approach has begun to emerge which explains the informal economy as arising when tax morality is low and seeks to foster commitment to compliance. The purpose of this paper is to provide an evidence-based evaluation of these competing policy approaches. Design/methodology/approach – To do so, the results are reported of 1,306 face-to-face interviews undertaken during 2013 in the UK. Findings – The finding is that raising the sanctions and risks of detection has no significant impact on the likelihood of participation in the informal sector. However, participation in the informal economy is significantly associated with tax morality. Indeed, the only time that increasing the sanctions and risks of detection reduces the level of participation in the informal economy is amongst citizens with very low tax morality. Practical implications – Rather than continue with the current rational economic actor approach of increasing the penalties and risks of detection, this case study of the UK reveals that a new policy approach is required that seeks to improve tax morality by introducing measures to reduce the acceptability of participating in the informal economy. Whether this is more widely applicable now needs to be tested, given the dominance throughout the world of this punitive rational economic actor approach. Originality/value – This paper provides evidence supporting a new social actor approach towards explaining and tackling participation in the informal economy.

Application of the Non-adoption, Abandonment, Scale-up, Spread and, Sustainability (NASSS) Framework to evaluate the role of technology in the Pathways to Comorbidity Care (PCC) implementation project to improve management of comorbid substance use and mental disorders

2020 ◽  
Author(s):  
MariaGabriela Uribe Guajardo ◽  
Andrew James Baillie ◽  
Eva Louie ◽  
Vicki Giannopoulos ◽  
Katie Wood ◽  
...  
Keyword(s):  
Substance Use ◽  
Clinical Supervision ◽  
Mental Health Problems ◽  
Scale Up ◽  
Structured Interview ◽  
Barriers And Facilitators ◽  
Self Report ◽  
Evidence Based ◽  
Face To Face ◽  
Drug And Alcohol

Abstract (250 words)In substance use treatment settings, there is a high prevalence of comorbid mental health problems. Yet an integrated approach for managing comorbidity, implementation of evidence-based intervention in drug and alcohol settings remains problematic. Technology can help the adoption of evidence-based practice and successfully implement effective treatment health care pathways. This study sought to examine aspects of electronic resources utilisation (barriers and facilitators) by clinicians participating in the PCC training. MethodA self-report questionnaire and a semi-structured interview was designed to measure overall satisfaction with the PCC portal and e-resources available throughout the 9-month intervention for participating clinicians. An adapted version of the ‘Non-adoption, Abandonment, Scale-up, Spread and, Sustainability’ (NASSS) framework was used to facilitate discussion in regards to the study findings. ResultsA total of 20 clinicians from drug and alcohol services responded to all the measures. Facilitators of portal use included: i. clinician acceptance of the PCC portal; ii. guidance from the clinical supervisor or clinical champion that encouraged the use of e-resources. Some of the barriers included: i. complexity of the illness (condition), ii. clinicians’ preference (adopter system) for face-to-face resources and training modes (e.g. clinical supervision, clinical champion workshops), and iii. lack of face-to-face training on how to use the portal (technology and organisation).ConclusionBased on the NASSS framework, we were able to identify several barriers and facilitators including such as the complexity of the illness, lack of face-to-face training and clinician preference for training mediums. Recommendations include ongoing consultation of clinicians to assist in the development of tailored e-health resources and offering in-house training on how to operate and effectively utilise these resources.

Evidence-based eHealth interventions for caregivers of people with dementia (Myinlife and Partner in Balance): Evaluation of implementations in municipality contexts (Preprint)

2020 ◽  
Author(s):  
Hannah Liane Christie ◽  
Lizzy Mitzy Maria Boots ◽  
Huibert Johannes Tange ◽  
Frans Rochus Josef Verhey ◽  
Marjolein Elizabeth de Vugt
Keyword(s):  
Self Efficacy ◽  
Measurement Instrument ◽  
Implementation Process ◽  
Successful Implementation ◽  
Evidence Based ◽  
Multiple Sources ◽  
Target Groups ◽  
Face To Face ◽  
People With Dementia ◽  
Implementation Context

BACKGROUND Very few evidence-based eHealth interventions for caregivers of people with dementia are implemented into practice. Municipalities are one promising context to implement these interventions, due to their available policy and innovation incentives regarding (dementia) caregiving and prevention. In this study, two evidence-based eHealth interventions for caregivers of people with dementia (Partner in Balance and Myinlife) were implemented in eight municipalities in the Euregion Meuse-Rhine. OBJECTIVE This study’s objectives were to (1.) evaluate this implementation and (2.) investigate determinants of successful implementation. METHODS This study collected eHealth usage data, Partner in Balance coach evaluation questionnaires, and information on implementation determinants. This was done by conducting interviews with the municipality officials, based on the Measurement Instrument for Determinants of Implementation (MIDI). This data from multiple sources and perspectives was integrated and analysed to form a total picture of the municipality implementation process. RESULTS The municipality implementation of Partner in Balance and Myinlife showed varying levels of success. In the end, three municipalities planned to continue the implementation of Partner in Balance, while none planned to continue the implementation of Myinlife. The two Partner in Balance municipalities that did not consider the implementation to be successful, viewed the implementation as an external project. For Myinlife, it was clear that more face-to-face contact was needed to engage the implementing municipality and the target groups. Successful implementations were linked to implementer self-efficacy CONCLUSIONS The experiences of implementing these interventions suggested that this implementation context was feasible regarding the required budget and infrastructure. The need to foster sense of ownership and self-efficacy in implementers will be integrated into future implementation protocols, as part of standard implementation materials for municipalities and organisations implementing Myinlife and Partner in Balance.

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