Economic Growth and Poverty: Does Formalisation of Informal Enterprises Matter?
AbstractThe informal sector (IS) in developing countries plays significant roles viz., the provision of employment, incomes and supplying ignored markets. However, the working and employment conditions in the sector are still poor. Thus, its expansion and changing structures have drawn the attention of scholars and international policy makers on factors hindering its formalisation. Among the addressed factors include high costs of formalisation and lack of incentives to operate in the formal sector. To overcome these factors, various approaches have been adopted by different stakeholders. The paper assesses these approaches, factors related to informality-formality trade-off and the question of formalisation as a solution for firms’ growth. Looking at the problems faced by informal enterprises and the literature addressing options to accelerate the formalisation of informal enterprises, the paper briefly summarises the weaknesses of these approaches.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 1456.
Date of creation: 2006
Date of revision:
informal sector; small enterprises; formal and informal institutions; informality; poverty; economic growth;
Other versions of this item:
- Esther K. Ishengoma & Robert Kappel, 2006. "Economic Growth and Poverty: Does Formalisation of Informal Enterprises Matter?," GIGA Working Paper Series 20, GIGA German Institute of Global and Area Studies.
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
- L5 - Industrial Organization - - Regulation and Industrial Policy
- O17 - Economic Development, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
- I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
- E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Loayza, Norman A., 1997.
"The economics of the informal sector : a simple model and some empirical evidence from Latin America,"
Policy Research Working Paper Series
1727, The World Bank.
- Loayza, Norman V., 1996. "The economics of the informal sector: a simple model and some empirical evidence from Latin America," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 45(1), pages 129-162, December.
- Abigail Barr, 1998.
"Enterprise performance and the functional diversity of social capital,"
Economics Series Working Papers
WPS/1998-01, University of Oxford, Department of Economics.
- Abigail Barr, 1998. "Enterprise performance and the functional diversity of social capital," CSAE Working Paper Series 1998-01, Centre for the Study of African Economies, University of Oxford.
- Jackle, Annette E & Li, Carmen A, 2006.
"Firm Dynamics and Institutional Participation: A Case Study on Informality of Micro Enterprises in Peru,"
Economic Development and Cultural Change,
University of Chicago Press, vol. 54(3), pages 557-78, April.
- A. E. Jackle & C. A. Li, 2003. "Firm Dynamics and Institutional Participation: A Case Study on Informality of Micro-Enterprises in Peru," Economics Discussion Papers 552, University of Essex, Department of Economics.
- Reinikka, Ritva & Svensson, Jakob, 2002. "Coping with poor public capital," Journal of Development Economics, Elsevier, vol. 69(1), pages 51-69, October.
- International Monetary Fund, 2004. "Serbia and Montenegro: Poverty Reduction Strategy Paper," IMF Staff Country Reports 04/120, International Monetary Fund.
- Ranis, Gustav & Stewart, Frances, 1999. "V-Goods and the Role of the Urban Informal Sector in Development," Economic Development and Cultural Change, University of Chicago Press, vol. 47(2), pages 259-88, January.
- Robert C. Feenstra, 1998.
"Integration of Trade and Disintegration of Production in the Global Economy,"
Journal of Economic Perspectives,
American Economic Association, vol. 12(4), pages 31-50, Fall.
- Robert Feenstra, 2003. "Integration Of Trade And Disintegration Of Production In The Global Economy," Working Papers 986, University of California, Davis, Department of Economics.
- Robert C. Feenstra, . "Integration Of Trade And Disintegration Of Production In The Global Economy," Department of Economics 98-06, California Davis - Department of Economics.
- Christian Morrisson, 1995. "What Institutional Framework for the Informal Sector?," OECD Development Centre Policy Briefs 10, OECD Publishing.
- Howell, Jude & Singh, Andrea, 2002. "Good practice study in Shanghai on employment services for the informal economy," ILO Working Papers 355191, International Labour Organization.
- Klein, Michael, 2003. "Ways out of poverty : diffusing best practices and creating capabilities - perspectives on policies for poverty reduction," Policy Research Working Paper Series 2990, The World Bank.
- Xaba, Jantjie & Horn, Pat & Motala, Shirin & Singh, Andrea, 2002. "Informal sector in Sub-Saharan Africa," ILO Working Papers 355190, International Labour Organization.
- Levenson, Alec R. & Maloney, William F., 1998. "The informal sector, firm dynamics, and institutional participation," Policy Research Working Paper Series 1988, The World Bank.
- Tarek, Syed Ali, 2011. "Study of Sustainable Growth Factors of SIE/ Micro-financed Business," MPRA Paper 40752, University Library of Munich, Germany.
- Fara Azmat & Ramanie Samaratunge, 2009. "Responsible Entrepreneurship in Developing Countries: Understanding the Realities and Complexities," Journal of Business Ethics, Springer, vol. 90(3), pages 437-452, December.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.