The Morality of Informality: Exploring binary oppositions in counterfeit markets

In seeking to explain the persistence of the informal economy – defined as the set of economic activities that are illegal yet legitimate to some large groups – scholars often focus on instrumental economic factors; in doing so, the role of morality is often overlooked. In response, we conduct a qualitative study of Pakistani counterfeit bazaars, to understand how market participants construct moral legitimacy in a way that justifies participation in, and thus contributes to sustaining, the informal economy. We reveal how the terms ‘counterfeit' (representing the informal economy) and ‘authentic' (representing the formal economy) function as an oppositional pair, both within the emic perspective of market participants but also within a baseline etic perspective of Western Intellectual Property regimes. Compared with this baseline, we find that market participants engage in three types of semantic transformation (invalidation, reframing and inversion) that shape moral assessments of authentic and counterfeit consumption. Through our study, we first contribute to a better understanding of how legitimacy in the informal economy is constructed. We also contribute to theory on ‘legitimacy as perception', indicating how moral legitimization can occur through a dynamic of binary opposition between what is deemed to be ‘moral' and ‘immoral'. Our final contribution is towards understanding how morality around counterfeit consumption is constructed.