Tackling enterprise in the informal economy: an introductory overview

Abstract

This paper introduces this special issue by providing an overview of the various policy options and approaches available for tackling enterprise in the informal economy. It firstly reviews four possible hypothetical policy options, namely doing nothing, eradicating informal sector enterprise, moving formal enterprises into the informal economy, or formalizing enterprise in the informal economy. Displaying that formalizing informal sector enterprise is the most viable and most commonly adopted approach, it then reviews the two approaches of using either direct 2 controls, which increase the costs of operating informally and/or the benefits of operating formally, or indirect controls that seek greater self-regulation. Following this, the ways in which these approaches can be combined is then reviewed. The outcome is a comprehensive introductory overview and conceptual framework for contextualizing the arguments of the papers in this special issue.

How firms strategically navigate informal and formal copyright practices: insights from Nollywood

“…This is also the first known study that uses copyright practices as an analytical lens to explore the interaction between informality and formality. The finding about diverse configurations of interactions also supports the view that there are degrees of informality (Williams et al , 2016). Therefore, formality and informality are not bi-polar but rather mutually-reinforcing concepts (Boanada-Fuchs and Boanada Fuchs, 2018).…”

“…Some scholars argue that the supposed dichotomy between informality and formality is simply misleading and inadequate (Kiggundu and Pal, 2018). These scholars contend that the studies largely have negative and biased notions about informality and frequently call for the complete substitution of formal arrangements (Peng, 2003; Rajan and Zingales, 1998; Williams, 2016; Ulyssea, 2020). There is also the mistaken notion that informality is simply an unsustainable and makeshift response to failed state regulations (Igwe et al , 2020; Hack-Polay et al , 2020; Bothello et al , 2019; Ge et al , 2019; Murithi et al , 2020; Puffer et al , 2010; Sutter et al , 2013).…”

“I’m a stay at home businesswoman”: an insight into informal entrepreneurship in Jordan

“…For example, women are more likely to spend a higher percentage of their earnings on their family and especially the education of their children (Jalbout, 2015). While many studies have associated informal entrepreneurship with poor and marginalized groups who resort to this activity out of necessity (Williams, 2015), our mixed group showed that women from all walks of life and with varying socio-economic backgrounds can turn to informal entrepreneurship both out of necessity and out of a desire to exploit a market opportunity. For these women, making money and contributing to household expenses was the main motive for starting their business.…”

“…Rezaei et al (2013, p. 65) view the informal economy as “a sociological phenomenon which is contextual, situational, gradual and conditional”. Also referred to as a “grey” or hidden economy (Smallbone and Welter, 2006; Williams, 2015), businesses participating in such activities are usually unregistered and their incomes are not reported, taxed or monitored by the government (Rezaei et al , 2013; Williams, 2011), and are often confused with the family income (Thi Thanh Thai et al , 2013). Micro-enterprises, family businesses and own-account operations are units within the informal economy, which can employ fixed, temporary or unregistered workers.…”

“…Informal entrepreneurship also provides stability, opportunity and wealth creation for women, disadvantaged groups and minorities and is a way to strike a better balance between family and work life obligations (Hattab, 2012; Ratten, 2014), especially when they take the form of home-based projects (Al-Dajani and Marlow, 2010). Most entrepreneurs that operate in the informal sector in developing countries are considered to be necessity-driven (Hattab, 2012; Henry et al , 2014; Maritz, 2004; Rosa et al , 2008), yet a growing body of knowledge seems to show that this may not always be the case (Williams and Round, 2007; Williams, 2015; Williams et al , 2012). Sometimes, informal entrepreneurs may be driven solely by opportunity or the co-existence of both necessity and opportunity (Williams, 2008; Williams and Williams, 2014).…”