Old and New: Changing Perspectives on the Informal Economy

ChentableOld_newInformalMartha Alter Chen’s table summarizing the still prevalent yet now considered obsolete view of the informal economy, against the revised perspective currently held is worth showcasing in its own right. Further food for thought comes from this little snippet from Sparks and Barnett:

Gelb et al (2009) found that the “…productivity of informal firms is virtually indistinguishable from that of formal firms in East Africa…” (although that was not the case they found in southern Africa)

This implies that location, and thus, the context of the operating environment matter when it comes to productivity of the informal sector, or the viability of its business models.

Further research is required to unpack the generalization of the informal economy, by geography and culture, as well the specific operating environment.

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