Informality and Development
Bibliographic Data
| ID | 4029802 |
|---|---|
| Authors | Rafael La Porta (Noble Foundation Professor of Finance, Tuck School of Business at Dartmouth, Hanover, New Hampshire.), Andrei Shleifer (Professor of Economics, Harvard University, Cambridge, Massachusetts. .) |
| Year | 2014 |
| Volume | 28 |
| Issue | 3 |
| Pages | 109-126 |
| Publication date | 2014-08-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | The Journal of Economic Perspectives (JOURNAL) |
| Journal identifiers | ISSN: 0895-3309 • E-ISSN: 1944-7965 |
| Publisher | American Economic Association (PUBLISHER • US) |
| DOI | 10.1257/jep.28.3.109 |
| OpenAlex | W2170353571 |
| Language | EN |
| Citations received | 268 |
| References cited | 15 |
In developing countries, informal firms account for up to half of economic activity. They provide livelihood for billions of people. Yet their role in economic development remains controversial with some viewing informality as pent-up potential and others viewing informality as a parasitic organizational form that hinders economic growth. In this paper, we assess these perspectives. We argue that the evidence is most consistent with dual models, in which informality arises out of poverty and the informal and formal sectors are very different. It seems that informal firms have low productivity and produce low-quality products; and, consequently, they do not pose a threat to the formal firms. Economic growth comes from the formal sector, that is, from firms run by educated entrepreneurs and exhibiting much higher levels of productivity. The expansion of the formal sector leads to the decline of the informal sector in relative and eventually absolute terms. A few informal firms convert to formality, but more generally they disappear because they cannot compete with the much more-productive formal firms
Agriculture · Business · Developing country · Economic growth · Economic sector · Economic system · Economics · Economy · Formality · Informal sector · Labour economics · Livelihood · Market economy · Political science · Poverty · Productivity · Innovation and Socioeconomic Development · Microfinance and Financial Inclusion · Taxation and Compliance Studies
Banks and informality
Development economics and the colonial encounter
From LinkedIn to Labor Statistics
Payroll taxes, firm dynamism, and aggregate productivity
Determinants of the spatial relationship between morphological and functional centers across different stages of economic development
Does urbanization formalize the economy? The role of local governance in Vietnam
The Pursuit of Gender Equality
The Intersectionality of Informal Employment
Informal Sector City Tourism
The Economics of Slums in the Developing World
Entre la reinvención y la reactivación
Informal Economy
Informal Work in Developing Countries
Colombia Toward a High-Income Country with Social Mobility
The Job Ladder
Integrity for Good Governance in Latin America and the Caribbean
Breaking the Vicious Circles of Informal Employment and Low-Paying Work
Justice for Resilient Development in Climate-Stressed Cities
Valuing the Global Mortality Consequences of Climate Change Accounting for Adaptation Costs and Benefits
Firms, Informality, and Development
Entrepreneurship as a solution to extreme poverty
Informality
Institutions and Entrepreneurship Quality
Trade Liberalization and Regional Dynamics
Moving to nowhere
Financial Frictions and Firm Informality
Do Capital Grants Improve Microenterprise Productivity
Rethinking the Informal Economy and the Hugo Effect
Tax Revenues in Low-Income Countries
Agglomeration economies in the formal and informal sectors
Exploring the Moderation and Mediation Effects in Addressing the Main Determinants of Income Inequalities in Supporting Quality of Life
Les villes africaines et le casse-tête du développement
Cross-Border Trade, Insecurity and the Role of Customs
Do rural roads promote inclusive entrepreneurship
Does inducing informal firms to formalize make sense? Experimental evidence from Benin
Occupational Safety and Health Staging Framework for Decent Work
Informality and social innovation
Uneven Contributions
From Informality to Green Development
Institutionalized democracy and the shadow economy in the short- and long-run
Shadow economy, financial inclusion and economic growth Nexus
Less-entrepreneurial groups reconsidered
STEM education and gender income parity in USA, 2019
Modelling the informal sector and energy consumption in Ghana
Ghana’s informal economic sector in the face of a pandemic
The Fitting Process
Understanding the drivers of informal economy of coal mining
Unboxing Entrepreneurial Motivations in Tanzania
The role of labor market frictions in structural transformation
Opportunity for informal business networking to reshape the institutional capacity of community in housing revitalization projects
Abate, bribe or quit
Does tourism activity reduce the size of the informal economy? Capturing long-term heterogeneous linkages around the world
Linking the Shadow Economy and Clean Energy Adoption
Fiscal stimulus packages to Covid‐19
Out of the shadow
Gender of a manager and firm performance in Africa
Digital divides among microenterprises
Informality, self‐employment and heterogeneous managerial ability
Can we understand the simultaneous evolution between economic and informality growth in Africa? A preliminary explanation
Covid‐19
Neo-Dualism
Pace of structural change and inter‐sectoral relative price
Remittance flows and informal economies in post‐Soviet transition countries
Informal sector and mobile financial services in emerging and developing countries
Nouvel éclairage sur la relation entre inégalités et informalité à partir de l'exemple latino‐américain
Les gagnants et les perdants de l'emploi informel en Indonésie
Les entreprises familiales en Égypte
The Jedi path to formal economy
Does competition from informal firms encourage the formal firms to obtain quality certificates
Foreign ownership and firm performance
Informality and aggregate labor productivity growth
Does corruption moderate the military spending – Informal economy nexus? The empirical evidence from Asian countries
Performance disparities in the informal sector in Ghana – gendered perspective
The role of budget imbalance in public spending–underground economy nexus
Beyond the formal/informal employment dualism
L’ODD « travail décent » versus l’emploi informel en égypte (2008-2019)
Impact of Shadow Economy on Sustainable Development in Africa
Mobile Money Adoption and Democratic Institutions
The causal effects of rule of law & property rights on fiscal capacity
Formal Firms with Bribery in a Dynamic Business Environment
Registration at founding and firm performance
The importance of the business environment for the informal economy
Agglomeration and informality
What drives the spatial wage premium in formal and informal labor markets? The case of Ecuador
Opening Up, Falling Behind
Informality-sustainable city nexus
Evaluating the relationship between marginalization and participation in undeclared work
Unmasking the shadow economy
Informality currencies
Alluvial gold mining, conflicts, and state intervention in Peru's southern Amazonia
Regional integration from “below” in West Africa
Commoning Public Spaces Towards Inclusive Urbanism in Ghana
Who opposes labor regulation? Explaining variation in employers’ opinions
Mapping hawala risks around the world
What is informality? (Mapping) “the art of bypassing the state” in Eurasian spaces - and beyond
Women in development minerals
Fertility, employment, and the demographic dividend in sub-Saharan African countries with incipient demographic transition
Addressing (in)formality
Labour informality in forestry
Moderating effects of corruption and informality on the fiscal decentralization—economic growth nexus
Human Capital and Regional Development
Microcredit in Theory and Practice
The Regulation of Entry
The Unofficial Economy and Economic Development
Income Distribution, Market Size, and Industrialization
Who Are The Microenterprise Owners? Evidence From Sri Lanka On Tokman V. De Soto
Economic Development with Unlimited Supplies of Labour
Modelling the informal sector formally
Industrialization and the Big Push
The Unofficial Economy in Transition
The Economics of Slums in the Developing World
Why Do Developing Countries Tax So Little
"The Missing "Missing Middle
| Unique citing works | 268 |
|---|---|
| Citations per year | 20,62 |
| Citation span | 2013 - 2027 (15) |
| Citation velocity | recent |
| Highly cited | Yes |
| Citation types | Neutral: 258 |