chapter  9
Union Power and the Formal–Informal Divide
ByGunilla Andrae, Björn Beckman
Pages 12

What makes societies capable of delivering social welfare to their members? This chapter explores the potential for organizing across the formal-informal divide to enhance welfare and its wider implications for industrialization and development. The issues are approached from the formal end, reflecting primarily our own earlier studies of trade unions that suggest that these have a special role by virtue of their insertion in the political economy (Andrae and Beckman 1998, Beckman 2004). We begin by explaining this source of union power. Formal wage workers, however, are few in comparison with those in the informal economy, especially in Africa, and trade unions depend on their ability to engage in alliances. We ask what benefits accrue to those in the informal economy from such organizing across the formalinformal divide. Some international organizations have far reaching expectations of the benefits from extending the achievements of formalization, as in the case of the ‘Decent Work’ campaign of the ILO (2002) or in the UN Commission on the Legal Empowerment of the Poor (2008). In the latter case, an overall increase in the demand for goods and a greater efficiency of production are expected from the diffusion of the gains of the formal economy. This may well be. The focus in our case, however, is the politics of influencing the state and the direction of development policies.