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Informal Economies  

Ernest Aryeetey

The expressions, “informal economy,” “informal sector,” and “informal employment” reflect statistical terms and definitions used to describe various aspects of informality. They are the result of several decades of work to develop a framework that adequately represents the multifaceted nature of informality as it applies not only to developing countries, but also to other transition and developed economies. The informal sector is generally viewed as the set of activities of small unregistered enterprises, while informal employment refers to employment within the formal or informal sector that lacks any form of protection, whether legal or social.1 The informal economy is a broader concept that encompasses all of these elements in their different forms, including their outputs and outcomes. The many different views about the drivers and composition of the informal economy in Africa have influenced various prescriptions and policy responses. On the one hand, some have viewed informality as being inimical to investment and growth, given that the activities undertaken usually fall outside of official regulation and control. The policy response has, therefore, often been to clamp down on or formalize the activities and relationships within the informal economy. On the other hand, informality is sometimes viewed as critical for growth and poverty reduction, given that the informal economy is inextricably linked to the formal economy while also serving as an important source of livelihood for millions of people. As a result of this, some effort has recently gone into providing a more supportive environment to enhance productivity within the informal economy and minimize its inherent vulnerabilities in the last decade. In the face of increasing globalization and access to new technologies that will drive the future of work, there is concern about the future of informal economic activities. Whether new technologies lead to a decline or upscaling of the informal economy in Africa will depend on several elements. Technology will not only shape how informality in Africa is viewed, but will influence the kind of activities undertaken, its links with the formal economy, and ultimately, the public policy response, which will itself be shaped by advances in technology.

Article

Informal Work  

Mahima Saxena

Informal work refers to a variety of nontraditional work and employment arrangements. It is different from to work in the informal economy, even though the terms are often used interchangeably. In the extant literature, terms such as precarious work, gig or freelance work, and nontraditional work are also used to describe informal work. Informal work is a ubiquitous phenomenon, found globally, across all or most nations in the world. The majority of research on informal work has occurred within the fields of economics, sociology, labor law, policy, and related disciplines. It has been recognized that not enough attention in the field of psychology, specifically Industrial and Organizational psychology, has been paid to informal work. For the research that does exist in different scholarly and applied disciplines, there is often terminological overlap and confusion with regard to different forms and formats of alternative work arrangements. In addition, the study of informal work is often plagued by negative stereotypes and colonially inspired schools of thought that consider traditional, generational, and nonorganizational work of a lower standard and quality than professionally driven office-going jobs. The latter are mainly a by-product of the Industrial Revolution in Western Europe and fail to account for the multitude of work and work formats found around the world. Further research and policy attention on informal work is needed to provide conceptual clarity on informal work arrangements and informal workers. Psychology can contribute toward an in-depth understanding of informal work, specifically by focusing on a person-centric, first-person experience of work that is often characterized as informal. Industrial and Organizational psychology can also shed light on the themes and characteristics of work that is typically considered informal. Ultimately, taking a decolonized, international, and boundaryless approach to the psychological study of informal work can contribute both to science and to key policy initiatives surrounding inclusive, global, and sustainable development and human flourishing that leave no one behind.

Article

Trade Liberalization and Informal Labor Markets  

Lourenço S. Paz and Jennifer P. Poole

In recent decades, economic reforms and technological advances have profoundly altered the way employers do business—for instance, the nature of employment relationships, the skills firms demand, and the goods and services they produce and export. In many developing economies, these changes took place concurrently with a substantive rise in work outside of the formal economy. According to International Labour Organization estimates, informal employment can be as high as 88% of total employment in India, almost 50% in Brazil, and around 35% of employment in South Africa. Such informal employment is typically associated with lower wages, lower productivity, poorer working conditions, weaker employment protections, and fewer job benefits and amenities, and these informal workers are often poorer and more vulnerable than their counterparts in the formalized economy. Informal jobs are a consequence of labor market policies—like severance payments or social security contributions—that make the noncompliant informal job cheaper for the employer than a compliant formal job. Each model has a different benefit (or lack of punishment) for employing formal workers, and a distinct mechanism through which international trade shocks alter the benefit-cost of these types of jobs, which in turn results in a change in the informality share. The empirical literature concerning international trade and formality largely points to an unambiguous increase in informal employment in the aftermath of increased import competition. Interestingly, increased access to foreign markets, via liberalization of major trading partners, offers strongly positive implications for formal employment opportunities, decreasing informality. Such effects are moderated by the de facto enforcement of labor regulations. Expansions toward the formal economy and away from informal wage employment in the aftermath of increased access to foreign markets are smaller in strictly enforced areas of the country.

Article

The Minibus-Taxi Industry in South Africa  

Timothy Gibbs and Ofentse Mokwena

South Africa’s barely regulated, murderously competitive, contemporary minibus-taxi industry dates to the turn of the 1980s. It is synonymous with the sixteen-seat (latterly twenty-two- and thirty-two-seat) minibuses, which forced their way onto bus routes and soon displaced government-subsidized public transport services. Nonetheless, the minibus-taxi industry traces its roots to the Black-owned informal transportation sector that first developed on the fringes of South Africa’s segregated cities in the early decades of the 20th century. Heroic stories of these pioneering guerrilla entrepreneurs—who successfully ran unlicensed “pirate” transport operations, while dodging the heavy hand of state regulation and White racism—remain potent memories in parts of South Africa. Academics might pay more attention to the tangled relationship between patterns of urban change, racial segregation, political economy, and public-transport provision. In one sense, South Africa’s minibus-taxi sector shares striking parallels to Kenya’s matatus and Tanzania’s daladalas. At the same time, the distinctive history of South Africa’s minibus-taxi sector is perhaps best understood when placed into the longue durée of urban segregation and transport apartheid, which shares many similarities with the more tightly planned, racially segregated cities of the Americas.

Article

The Global Political Economy of the Informal Mining Industry: A Critical Analysis of Latin American Perspectives  

Santiago Carranco-Paredes

The traditional paradigms within International Political Economy (IPE) and International Relations (IR) have historically focused primarily on formal sectors of political and economic activities, often overlooking analyses of informal or covert realms. This approach has limited the comprehension of global power dynamics, neglecting crucial insights into phenomena occurring within the informal sector. The oversight of informal actors, considered irrelevant by conventional perspectives, hampers a holistic understanding of global relations. This research adopts a critical stance, drawing on the insights of Robert Cox and postcolonial contributions, to challenge the traditional paradigms of IPE and IR. It advocates for a more inclusive and comprehensive approach that recognizes the agency of non-state actors in transnational processes. Through a focused examination of the small and medium-scale gold-mining sector, this study seeks to transcend the state-centric approach, providing a broader understanding of global relations. The analysis delves into the intricate dynamics of this sector, shedding light on the significant role played by non-state actors in shaping transnational processes. By doing so, the research contributes to the development of a more inclusive and nuanced global political economy. It emphasizes the need to incorporate diverse perspectives and account for local realities, thereby enriching the academic discourse on global relations. In essence, this research challenges the established narratives, advocating for a paradigm shift that acknowledges the multifaceted and influential role of non-state actors in the global arena. The study’s findings offer valuable insights into the complexities of global relations, highlighting the interconnectedness of formal and informal sectors. This approach not only deepens the understanding of the small and medium-scale gold-mining sector but also fosters a more comprehensive and inclusive framework for analyzing global political and economic phenomena.

Article

Slum Politics in Africa  

Jacqueline M. Klopp and Jeffrey W. Paller

Africa’s growing slums are complex, diverse neighborhoods with their own histories. Currently, these places, characterized by spatially concentrated poverty and human rights abuses, are where large proportions and, in many cases, the majority of Africa’s growing urban populations live. These slums often have a politics characterized by clientelism and repression, but also cooperation, accountability, and political mobilization. Importantly, they must be understood within a wider political context as products of larger historical processes that generate severe inequalities in standards of living, rights, and service provision. Varied approaches (modernization vs. more critical historical and political economy approaches) attempt to explain the emergence, dynamics, and persistence of slums and the politics that often produces, characterizes, and shapes them in Africa. While raising important questions about the link between urbanization and democracy, modernization theories, which are typically ahistorical, do not fully explain the persistence and actual growth of slums in African cities. More historically grounded political economy approaches better explain the formation and dynamics of slums in African cities, including the complex, uneven, and inadequate service delivery to these areas. Whether the conditions of Africa’s slums and the social injustice that undergirds them will give birth to greater democratization in Africa, which, in turn, will deliver radical improvements to the majority, is a critical unanswered question. Will social movements, populist opposition parties, and stronger citizenship claims for the poor ultimately emerge from slum—and wider city—politics? If so, will they address the political problem of inequality that the slum represents? A focus on cities, slums, and their politics is thus a core part of growing concern for the future of African cities and democratic politics on the continent.

Article

Women in Angola  

Mariana P. Candido

European colonial powers established the contemporary boundaries of Angola during the Conference of Berlin (1884–1885). However, colonialism dates to the 15th century, when Portuguese merchants first contacted the Kingdom of Kongo along the Congo River and established early settlements in Luanda (1575) and Benguela (1617). Parts of the territories that became known as Angola in the early 20th century have a long history of interaction with the outside world, and as a result European primary sources provide much of the information available to historians. The reports, official correspondence, and diaries were produced by European men and are therefore problematic. However, by reading against the grain scholars can begin to understand how women lived in Angola before the 20th century. Some, such as Queen Njinga, had access to political power, and others, such as Dona Ana Joaquina dos Santos e Silva, enjoyed great wealth. Kimpa Vita was a prophet who led a movement of political and religious renewal and was killed as a result. Most women never appeared in historical documents but were fundamental to the economic and social existence of their communities as farmers, traders, artisans, mediums, and enslaved individuals. The end of the slave trade in the 1850s led to the expansion of the so-called legitimate trade and plantation economies, which privileged male labor while relying on women’s domestic contributions. The arrival of a larger number of missionaries, colonial troops, and Portuguese settlers by the end of the 19th century resulted in new policies that stimulated migration and family separation. It also introduced new ideas about morality, sexuality, and motherhood. Women resisted and joined anticolonial movements. After independence, decades of civil war increased forced displacement, gender imbalance, and sexual violence. The greater stability at the end of the armed conflict may favor the expansion of women’s organizations and internal pressures to address gender inequalities.