IDEAS home Printed from
   My bibliography  Save this article

Economic Freedom - A Vector Of Transition From The Informal To The Formal Economy


  • Corneliu-Sorin BAICU

    (PhD Student, Stefan cel Mare University of Suceava)

  • Luminita-Claudia CORBU

    (PhD Student, Stefan cel Mare University of Suceava)


This study aims to show that concerted action by the state and civil society can lead to an effective output of informality sphere by official or legal sphere. Such an action is represented by the vector concept named economic freedom. The resultant vector - economic freedom - is obtained by conjugating and composing of noneconomic factors (ownership freedom, freedom from corruption etc.) or cvasieconomic (fiscal freedom, labor freedom, investment freedom, etc.) and it is a prerequisite to a series of actions which are aimed at progressing progress and a healthy economy. If we cannot eradicate the phenomenon of informality, at least we can create a transition from the informal to the formal more efficiently and with positive effects in social and economic policy. The exit from the sphere of informality involves transitions strategies and not a simple translation from one sector to another.

Suggested Citation

  • Corneliu-Sorin BAICU & Luminita-Claudia CORBU, 2016. "Economic Freedom - A Vector Of Transition From The Informal To The Formal Economy," CES Working Papers, Centre for European Studies, Alexandru Ioan Cuza University, vol. 8(1), pages 20-32, March.
  • Handle: RePEc:jes:wpaper:y:2016:v:8:i:1:p:20-32

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Martha Alter Chen, 2007. "Rethinking the Informal Economy: Linkages with the Formal Economy and the Formal Regulatory Environment," Working Papers 46, United Nations, Department of Economics and Social Affairs.
    2. repec:iza:izawol:journl:y:2015:p:127 is not listed on IDEAS
    3. Dominik H. Enste, 2018. "The shadow economy in industrial countries," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-11, November.
    4. Edwin J. Feulner, 2002. "Homeland Defense, Individual Freedom, and the Rule of Law," Journal of Private Enterprise, The Association of Private Enterprise Education, vol. 18(Fall 2002), pages 1-15.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Floridi, Andrea & Demena, Binyam Afewerk & Wagner, Natascha, 2020. "Shedding light on the shadows of informality: A meta-analysis of formalization interventions targeted at informal firms," Labour Economics, Elsevier, vol. 67(C).
    2. Gabriela PRELIPCEAN, & Anamaria BUCACIUC, & Corneliu Sorin BAICU, 2016. "Social Economy And Informal Economy. Interactions And Effects," EcoForum, "Stefan cel Mare" University of Suceava, Romania, Faculty of Economics and Public Administration - Economy, Business Administration and Tourism Department., vol. 5(2), pages 1-12, july.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Friedrich Schneider & Mangirdas Morkunas & Erika Quendler, 2021. "Measuring the Immeasurable: The Evolution of the Size of Informal Economy in the Agricultural Sector in the EU-15 up to 2019," CESifo Working Paper Series 8937, CESifo.
    2. Meagher, Kate, 2019. "Working in chains: African informal workers and global value chains," LSE Research Online Documents on Economics 91590, London School of Economics and Political Science, LSE Library.
    3. Ligita Gasparėnienė & Rita Remeikienė & Colin C. Williams, 2022. "Unemployment and the Informal Economy," SpringerBriefs in Economics, Springer, number 978-3-030-96687-4, June.
    4. Mansour Omeira & Simel Esim & Sufyan Alissa, 2008. "Labor Governance and Economic Reform in the Middle East and North Africa: Lessons from Nordic Countries," Working Papers 436, Economic Research Forum, revised 09 Jan 2008.
    5. Adekunle Moruf Alabi & Mubarak Olatunji Lasisi & Maryam Abimbola Azeez, 2020. "The evolution of informal land use in a Nigerian market," Environment and Planning B, , vol. 47(5), pages 745-758, June.
    6. Karolis Bielskis & Andrius Ciginas, 2020. "Household Wealth and Finances. Results for Households in Lithuania for 2017," Bank of Lithuania Discussion Paper Series 19, Bank of Lithuania.
    7. Aysit Tansel & Elif Oznur Acar, 2016. "The Formal/Informal Employment Earnings Gap: Evidence from Turkey," Research on Economic Inequality, in: Inequality after the 20th Century: Papers from the Sixth ECINEQ Meeting, volume 24, pages 121-154, Emerald Group Publishing Limited.
    8. Mara, Eugenia Ramona, 2021. "Drivers of the shadow economy in European Union welfare states: A panel data analysis," Economic Analysis and Policy, Elsevier, vol. 72(C), pages 309-325.
    9. Luebker, Malte., 2008. "Employment, unemployment and informality in Zimbabwe : concepts and data for coherent policy-making," ILO Working Papers 994206943402676, International Labour Organization.
    10. Tansel, Aysit & Kan, Elif Oznur, 2011. "Labor mobility across the formal/informal divide in Turkey: evidence from individual level data," MPRA Paper 35672, University Library of Munich, Germany.
    11. Gundogan, Naci & Bicerli, Mustafa Kemal, 2009. "Urbanization and Labor Market Informality in Developing Countries," MPRA Paper 18247, University Library of Munich, Germany.
    12. Kan, Elif Oznur & Tansel, Aysit, 2014. "Defining and Measuring Informality in the Turkish Labor Market," MPRA Paper 57739, University Library of Munich, Germany.
    13. Maria Ferreira, 2016. "Informal versus precarious work in Colombia: Concept and operationalization," Progress in Development Studies, , vol. 16(2), pages 140-158, April.
    14. Chan-Yuan Wong, 2016. "Evolutionary targeting for inclusive development," Journal of Evolutionary Economics, Springer, vol. 26(2), pages 291-316, May.
    15. Joseph M. Cheer & Stephen Pratt & Denis Tolkach & Anthony Bailey & Semisi Taumoepeau & Apisalome Movono, 2018. "Tourism in Pacific island countries: A status quo round‐up," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 5(3), pages 442-461, September.
    16. Oksana Yaskal & Ihor Yaskal & Mariana Kolosinska & Svitlana Boyda, 2021. "The Informal Employment – Factors and Public Policies for Its Limitation," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 56-73.
    17. Pasovic Edin & Efendic Adnan S., 2018. "Informal Economy in Bosnia and Herzegovina – An Empirical Investigation," South East European Journal of Economics and Business, Sciendo, vol. 13(2), pages 112-125, December.
    18. William Amos Pallangyo, 2021. "The informal sector and the safety of female traders in Tanzania: A reflection of practices, policies, and legislation," WIDER Working Paper Series wp-2021-160, World Institute for Development Economic Research (UNU-WIDER).
    19. Peter D. Little & Waktole Tiki & Dejene Negassa Debsu, 2015. "Formal or Informal, Legal or Illegal: The Ambiguous Nature of Cross-border Livestock Trade in the Horn of Africa," Journal of Borderlands Studies, Taylor & Francis Journals, vol. 30(3), pages 405-421, September.
    20. Loudi Njoya & Ibrahim Ngouhouo & Simplice A. Asongu & Friedrich Schneider, 2022. "The role of economic prosperity on informality in Africa: evidence of corruption thresholds from PSTR," Working Papers 22/012, European Xtramile Centre of African Studies (EXCAS).

    More about this item


    informal economics; formal economics; economic freedom; transition strategies;
    All these keywords.

    JEL classification:

    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jes:wpaper:y:2016:v:8:i:1:p:20-32. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Alupului Ciprian (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.