ABSTRACT
The concept ‘informal sector’ has been employed with a range of senses by authors writing about economic and social change in the Third World (Tokman 1978). Whilst doubts have sometimes been expressed about its analytical utility because of this very imprecision and some have also drawn attention to an empirical overlap between the formal and informal sectors of an economy, for others it has considerable value in referring to that wide range of roles of somewhat dubious legality which soak up much of the ‘underemployed residue’ one finds in the service sector in countries undergoing rapid urbanisation and modernisation (Davis 1978:303). With reference specifically to tourism, for instance, whilst people are employed in the formal sector in the hotels as room boys, waiters, receptionists, and so on, outside on the pavements there are hawkers, black market profiteers, beggars, pimps, prostitutes and thieves who try to interact with tourists. In the formal sector are guides trained by the Ceylon Tourist Board or possessing municipal guide licences, whose activities are to conform to certain standards; in the informal sector are numerous individuals, normally referred to as touts, 1 who try to escort and advise tourists, who are trained by no-one and who are regulated by no set of rules. Likewise, alongside the formally registered guesthouses which have to meet certain standards set by the Tourist Board and whose operators pay taxes and charges appropriate to running a commercial operation, many people try to offer rooms to foreigners, but without substantially improving their facilities and probably not declaring any income either. Informal sectors commonly operate with no government sanction or registration procedures (Bromley 1979; Wahnschaft 1982:431); in some countries, the activities within them are strictly illegal, falling outside the regulations that protect the formal, approved sector (Davies 1979:91, 101). While some might regard such activities as ‘marginal’ in the sense of being on the fringe of approved and regulated operations, the informal sector can generate considerable employment and income, little of which shows up in the official statistics of the country concerned.
