IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/32150.html
   My bibliography  Save this paper

Regulation, enforcement and informality: an analysis based on selected countries

Author

Listed:
  • Roychowdhury, Punarjit

Abstract

It is claimed that introducing flexibility in regulation is a sufficient condition for curbing the level of informality in the developing world. This dissertation tries to test the validity of this claim using data for 46 countries over the time period 1980-2008 to explore the dynamics between regulation and informal employment. The empirical findings obtained using Panel Data regression point out that regulation does not significantly affect informality. What matters is the interaction between governance and regulation. Thus, it is established that the quality of governance and the institutions enforcing the regulation are more important in context of curbing the level of informality. In addition, the dissertation also tries to find out the most important instruments of regulation that a state can put to use in context of informality.

Suggested Citation

  • Roychowdhury, Punarjit, 2011. "Regulation, enforcement and informality: an analysis based on selected countries," MPRA Paper 32150, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:32150
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/32150/1/MPRA_paper_32150.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Friedrich Schneider & Robert Klinglmair, 2004. "Shadow economies around the world: what do we know?," Economics working papers 2004-03, Department of Economics, Johannes Kepler University Linz, Austria.
    2. R. Hirschowitz, 1989. "The Other Path: The Invisible Revolution in the Third World1," South African Journal of Economics, Economic Society of South Africa, vol. 57(4), pages 266-272, December.
    3. Bromley, Ray, 1978. "Introduction - the urban informal sector: Why is it worth discussing?," World Development, Elsevier, vol. 6(9-10), pages 1033-1039.
    4. Marty Chen, 2005. "Rethinking the Informal Economy: Linkages with the Formal Economy and the Formal Regulatory Environment," WIDER Working Paper Series RP2005-10, World Institute for Development Economic Research (UNU-WIDER).
    5. Schneider, Friedrich, 2005. "Shadow economies around the world: what do we really know?," European Journal of Political Economy, Elsevier, vol. 21(3), pages 598-642, September.
    6. Fields, Gary S., 1975. "Rural-urban migration, urban unemployment and underemployment, and job-search activity in LDCs," Journal of Development Economics, Elsevier, vol. 2(2), pages 165-187, June.
    7. Moser, Caroline O. N., 1978. "Informal sector or petty commodity production: Dualism or dependence in urban development?," World Development, Elsevier, vol. 6(9-10), pages 1041-1064.
    8. Dibyendu Maiti & Kunal Sen, 2010. "The Informal Sector in India," Journal of South Asian Development, , vol. 5(1), pages 1-13, April.
    9. Loayza, Norman V., 1994. "Labor regulations and the informal economy," Policy Research Working Paper Series 1335, The World Bank.
    10. Blunch, Niels-Hugo & Canagarajah, Sudharshan & Raju, Dhushyanth, 2001. "The informal sector revisited : a synthesis across space and time," Social Protection Discussion Papers and Notes 23308, The World Bank.
    11. Marjit, Sugata & Kar, Saibal, 2011. "The Outsiders: Economic Reform and Informal Labour in a Developing Economy," OUP Catalogue, Oxford University Press, number 9780198071495.
    12. Michael Lipton, 1984. "Family, Fungibility and Formality: Rural Advantages of Informal Non-farm Enterprise versus the Urban-formal State," International Economic Association Series, in: Samir Amin (ed.), Human Resources, Employment and Development Volume 5: Developing Countries, chapter 10, pages 189-242, Palgrave Macmillan.
    Full references (including those not matched with items on IDEAS)

    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. Roychowdhury, Punarjit & Dutta, Mousumi, 2011. "Regulation, enforcement and informality: an analysis based on selected countries," MPRA Paper 30818, University Library of Munich, Germany.
    2. Roychowdhury, Punarjit & Dutta, Mousumi, 2011. "Regulation, governance and informality: an empirical analysis of selected countries," MPRA Paper 33775, University Library of Munich, Germany.
    3. Hanan Nazier & Racha Ramadan, 2015. "Informality and Poverty: A Causality Dilemma with Application to Egypt," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 5(4), pages 1-4.
    4. Gustavo Adolfo García, 2010. "Evolución de la informalidad laboral en Colombia: determinantes macro y efectos locales," Archivos de Economía 6449, Departamento Nacional de Planeación.
    5. Roberto Dell'Anno & Ferda Halicioglu, 2010. "An ARDL model of unrecorded and recorded economies in Turkey," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 37(6), pages 627-646, November.
    6. Arvin-Rad, Hassan & Basu, Arnab K. & Willumsen, Maria, 2010. "Economic reform, informal-formal sector linkages and intervention in the informal sector in developing countries: A paradox," International Review of Economics & Finance, Elsevier, vol. 19(4), pages 662-670, October.
    7. P R Agénor, 2005. "The Analytics of Segmented Labor Markets," Centre for Growth and Business Cycle Research Discussion Paper Series 52, Economics, The University of Manchester.
    8. Sugata Marjit & Biswajit Mandal, 2016. "International Trade, Migration and Unemployment – The Role of Informal Sector," Economics and Politics, Wiley Blackwell, vol. 28(1), pages 8-22, March.
    9. Rangan Gupta, 2005. "Endogenous Tax Evasion and Reserve Requirements: A Comparative Study in the Context of European Economies," Computing in Economics and Finance 2005 328, Society for Computational Economics.
    10. Gupta, Rangan, 2008. "Tax evasion and financial repression," Journal of Economics and Business, Elsevier, vol. 60(6), pages 517-535.
    11. Richard M. Bird & Jorge Martinez-Vazquez & Benno Torgler, 2014. "Societal Institutions and Tax Effort in Developing Countries," Annals of Economics and Finance, Society for AEF, vol. 15(1), pages 301-351, May.
    12. Roberto Dell'Anno & Offiong Helen Solomon, 2008. "Shadow economy and unemployment rate in USA: is there a structural relationship? An empirical analysis," Applied Economics, Taylor & Francis Journals, vol. 40(19), pages 2537-2555.
    13. James Alm & Jorge Martinez‐Vazque & Benno Torgler, 2006. "Russian attitudes toward paying taxes – before, during, and after the transition," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 33(12), pages 832-857, December.
    14. Bargain, Olivier & Etienne, Audrey & Melly, Blaise, 2021. "Informal pay gaps in good and bad times: Evidence from Russia," Journal of Comparative Economics, Elsevier, vol. 49(3), pages 693-714.
    15. Pius B. Simon, 1998. "Informal Responses to Crises of Urban Employment: An Investigation into the Structure and Relevance of Small-scale Informal Retailing in Kaduna, Nigeria," Regional Studies, Taylor & Francis Journals, vol. 32(6), pages 547-557, August.
    16. World Bank, 2008. "Bulgaria - Investment Climate Assessment : Volume 2. Detailed Report," World Bank Publications - Reports 7868, The World Bank Group.
    17. Dóra Benedek & Orsolya Lelkes, 2011. "The Distributional Implications of Income Under‐Reporting in Hungary," Fiscal Studies, Institute for Fiscal Studies, vol. 32(4), pages 539-560, December.
    18. Nezhyvenko, O., 2019. "Indirect or Macroeconomic Methods in Measuring the Informal Economy," Journal of Applied Management and Investments, Department of Business Administration and Corporate Security, International Humanitarian University, vol. 8(4), pages 201-215, December.
    19. Lay, Jann & Wiebelt, Manfred, 2001. "Towards a dual education system - a labour market perspective on poverty reduction in Bolivia," Kiel Working Papers 1073, Kiel Institute for the World Economy (IfW Kiel).
    20. Helio Mau-Quei & Michael P. Cameron, 2019. "The Characteristics of the Informal Sector in Timor-Leste," Working Papers in Economics 19/05, University of Waikato.

    More about this item

    Keywords

    Informality; Regulation; Enforcement; Governance; Panel Data;
    All these keywords.

    JEL classification:

    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • C40 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - General
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • L00 - Industrial Organization - - General - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    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:pra:mprapa:32150. See general information about how to correct material in RePEc.

    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: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.