chapter  15
18 Pages

Of methods and findings on the informal economy 1

WithPhilippe Adair, Rainer Neef

The term 'informal economy' (coined by ILO) encapsulates activities whose common character lies in the fact that they escape social and tax regulations, as well as statistical recording, in developed, less developed and transition countries. First, the actors and the branches of industry involved in the informal economy are well identified, but scholars disagree about the magnitude and trend of the informal economy. Second, beyond their agreement on the conditions required to perform informal activities, scholars do not agree on the relevant explanatory factors. Third, despite the fact that scholars may agree on the consequences of informal activities, they advocate different remedies depending on the extent and the expansion of the informal economy within the institutional context of the various countries. The informal economy may be considered as a 'social buffer' by liberals, which legitimates an accommodating policy of tolerance, whereas for mere interventionists it is a threat which calls for a policy of enforcement.