WP 12 - Politico-economic institutions and the informal sector in Albania
AbstractWhen formal institutions are unfavorable for the development of a free market economy, one reaction in many countries is a spontaneous development of informal economies. This study analyzes the conditions for the informal sector to emerge in a transition country, to wit, Albania. The consequences of these conditions are reflected in the various appearances of the informal sector in this country, only two of which are analyzed in this paper. These are the occurrence of financial pyramid schemes and street vending. The analyses are based on the existing scarce evidence with respect to both aspects of the informal sector in Albania. These two examples provide evidence of the importance of the informal sector in a country in transition. This study concludes that overall, the negative implications dominate the positive ones, and argues that the informal sector should be formalized. Finally, it recognizes that this formalization can only be done in an environment with the relevant and efficient institutional framework and enforcement mechanisms.
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Bibliographic InfoPaper provided by AIAS, Amsterdam Institute for Advanced Labour Studies in its series AIAS Working Papers with number wp12.
Date of creation: Jan 2003
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- Bezemer, Dirk J, 2001.
"Post-socialist Financial Fragility: The Case of Albania,"
Cambridge Journal of Economics,
Oxford University Press, vol. 25(1), pages 1-23, January.
- Dirk J. Bezemer, 1999. "Post-Socialist Financial Fragility: the Case of Albania," Tinbergen Institute Discussion Papers 99-045/2, Tinbergen Institute.
- Klarita G�rxhani & Arthur Schram, 2002. "Tax Evasion and the Source of Income," Tinbergen Institute Discussion Papers 02-098/1, Tinbergen Institute.
- Edgar L. Feige, 2003. "Underground Activity And Institutional Change: Productive, Protective And Predatory Behavior In Transition Economies," Development and Comp Systems 0305001, EconWPA.
- Christopher J. Jarvis, 1999. "The Rise and Fall of the Pyramid Schemes in Albania," IMF Working Papers 99/98, International Monetary Fund.
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