ABSTRACT
Since the turn of the millennium, a growing body of literature has begun to highlight how many entrepreneurs operate in the informal economy both in the global South (Bhatt 2006; Bhowmik 2007; Charmes 1998; Cross 2000; Cross and Morales 2007; Das 2003; Gurtoo and Williams 2009; Unni and Rani 2003) and the global North (Llanes and Barbour 2007; Small Business Council 2004; Venkatesh 2006; Webb et al. 2009; Williams; 2006; 2009). To understand the reasons for informal entrepreneurship, various competing perspectives have emerged which variously represent informal entrepreneurs as an historical legacy (the modernization perspective), necessity-driven (structuralist perspective) or voluntary entrants doing so either as a rational economic decision (neoliberal perspective) or as a lifestyle choice (poststructuralist perspective). This chapter critically evaluates the validity of these competing explanations of informal entrepreneurship through a discussion of a study of the motivations behind informal entrepreneurship in Brazil. The rationale for doing so is that different explanations tend to be associated with different policy approaches, so how one explains informal entrepreneurship has direct consequences for how one seeks to tackle it. By adopting a single explanation, as most commentators appear to do, the danger is that simplistic policy solutions that are applicable only to one group of entrepreneurs might be adopted. To develop more nuanced policy approaches that are tailored to different types of entrepreneurs, therefore, an appreciation is required of the heterogeneous motives of entrepreneurs.
