chapter  1
ByColin C. Williams
Pages 18

What share of all enterprises start up on an unregistered basis, and how many continue to operate in the informal sector once they become more established? Does the tendency of entrepreneurs to start up and operate in the informal sector vary across countries? If so, how can one explain these variations? What, moreover, should be done to tackle entrepreneurship in the informal sector? Should governments adopt ever more punitive measures to eradicate such entrepreneurship? Should a laissez-faire approach be adopted? Or should governments recognise that this is a hidden enterprise culture and seek to facilitate its formalisation? If so, what policy approaches are required? Are these entrepreneurs purely rational economic actors whose behaviour can be changed by increasing the costs and reducing the benefits of operating in the informal sector and by reducing the costs and increasing the benefits of operating in the formal sector? Or should these entrepreneurs be seen as social actors whose norms, values and beliefs are not aligned with the rules of formal institutions? If they are social actors, is it simply a case of changing these informal entrepreneurs’ attitudes towards compliance? Or do the formal institutions also need to change, and if so, how?