ABSTRACT
Informal economic activities exist in both developed and developing countries. But their influence in the developing countries is far greater, often rivalling or exceeding that of the formal economy (Schneider and Enste 2000). A survey by the International Labour Office (ILO 2002b) found that ‘informal employment comprises one half to three-quarters of non-agricultural employment in developing countries’ (p. 7). The regional ratios were 48 per cent in North Africa, 51 per cent in Latin America, 65 per cent in Asia and 72 per cent in SSA. Moreover, if South Africa is excluded, the share of informal employment in non-agricultural employment rises to 78 per cent in sub-Saharan Africa. If data were available for additional countries in Southern Asia, the regional average for Asia would likely be much higher. In particular, it is believed that, in Africa, the informal economy accounted for over 90 per cent of new urban jobs during the 1990s (ILC 1999, p. 3). Finally, informality is related to low productivity, poverty and low levels of well-being (ILO 2002b; Fransen and van Dijk 2008). These features make the issue of the informal economy one of the most difficult to deal with in the field of economic development.
