ABSTRACT
Social scientists have traditionally maintained that as capitalist economies develop, reliance on informal economic activities undergo concomitant decline. In this view, as the process of modernization advances, markets for labor, goods, and services in industrial and postindustrial economies increasingly occur within the legal and regulatory confines of the “formal economy.” Meanwhile, those markets outside the auspices of state control, the “informal economy,” are assumed to become increasingly marginal and to disappear with continued economic development.
