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Supply-Side Economics of a Good Type: Supporting and Expanding South Africa’s Informal Economy

Author

Listed:
  • Zaakhir Asmal
  • Haroon Bhorat
  • Alexia Lochmann
  • Lisa Martin
  • Kishan Shah

    (Development Policy Research Unit, University of Cape Town)

Abstract

This report presents an empirical profile of South Africa’s informal sector, with an aim of understanding in empirical detail, why South Africa’s informal sector employment remains relatively low in comparison to other developing countries. We present an overview of exogenous constraints to informal activity in South Africa, accompanied by feedback from relevant national and local policy officials where appropriate. We received limited feedback from city officials – itself an indicator of how the informal sector is currently viewed within the country. We consider the limited feedback received within the context of existing data and findings in the literature concerning the informal sector of South Africa. We then provide a preliminary discussion on possible supply-side policy options for expanding the informal sector in South Africa and challenges that may be faced in this regard.

Suggested Citation

  • Zaakhir Asmal & Haroon Bhorat & Alexia Lochmann & Lisa Martin & Kishan Shah, 2024. "Supply-Side Economics of a Good Type: Supporting and Expanding South Africa’s Informal Economy," Working Papers 202403, University of Cape Town, Development Policy Research Unit.
    • Handle: RePEc:ctw:wpaper:202403
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    References listed on IDEAS

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    1. repec:cep:stieop:43 is not listed on IDEAS
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    4. Alexia Lochmann, 2022. "Diagnosing Drivers of Spatial Exclusion: Places, People, and Policies in South Africa’s Former Homelands," Growth Lab Working Papers 199, Harvard's Growth Lab.
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    7. Haroon Bhorat & Zaakhir Asmal & Kezia Lilenstein & Kirsten van der Zee, 2018. "SMMES in South Africa: Understanding the Constraints on Growth and Performance," Working Papers 201802, University of Cape Town, Development Policy Research Unit.
    8. Heinrich, Carolyn J. & Knowles, Matthew T., 2020. "A fine predicament: Conditioning, compliance and consequences in a labeled cash transfer program," World Development, Elsevier, vol. 129(C).
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    Cited by:

    1. South African Reserve Bank, 2025. "The role of household and firm heterogeneity in the South African Reserve Bank's monetary policy deliberations," BIS Papers chapters, in: Bank for International Settlements (ed.), How can central banks take account of differences across households and firms for monetary policy?, volume 127, pages 279-284, Bank for International Settlements.
    2. Bhorat, Haroon & Köhler, Timothy, 2025. "The labour market effects of cash transfers to the unemployed: Evidence from South Africa," World Development, Elsevier, vol. 188(C).
    3. Bhorat, Haroon & Köhler, Timothy, 2025. "Watts happening to work? The labour market effects of South Africa’s electricity crisis," Energy Economics, Elsevier, vol. 142(C).

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