Abstract
The alleged confusions surrounding the definition of the informal sector (IS) have proved creative. They point to the family mode of production (FMP) as the concept that bridges the gaps among the confused ideas. FMP, the core of IS, is substantial (Section II). It can prosper to the extent that it is concentrated in products, sectors and spaces where FMP’s central advantage — fungibility — can be combined with self-provisioning and advantages of small scale (Section III). This paper stresses the internal, survival-oriented strengths of family productions. Elsewhere, I review its alleged growth-inhibiting, external weaknesses — its supposedly inevitable marginalisation or exploitation by big capital. In practice, FMP’s success-even in appropriate product lines-depends not only on sturdiness due to fungibility (which may go so far as the selection of a spouse for flexibility between producer and consumer activities) but also on location. For demographic, geographic and economic reasons, FMP’s prospects are best in rural areas (Section IV) yet an urban-biased pro-formal state, if it stimulates IS at all, will stress urban ‘small industry’ rather than rural FMP (Section V). This implies that, if IS (or petty commodity production and distribution, PCPD) survives and accumulates,1 it will be due to the sector’s internal economics, rather than to State action.
I am grateful to Drs S. Epstein, M. Howes, H. Schmitz and R. Wade for comments on an earlier draft. Responsibility for errors remains my own. I have not been able to take account of some important works published since this paper was prepared, notably M. Piore and S. Berger, and P. Kriedte et al., Industrialisation before industrialisation (Cambridge, 1982). This paper is complementary to another, under preparation, in which the relationship between FMP, big capital and the State will be reviewed, allowing for these works and other recent evidence.
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Notes
For a provocative (but ultra-deterministic) argument that ‘self-employed petty producers’ can be a source of growth, let alone transformation, only by replication and self-reproduction as the subordinates of larger-scale capitalism, see C. Gerry, ‘Petty production and capitalist production in Dakar: the crisis of the self-employed’, World Development, 6 (September–October 1978) esp. 1150–6.
Compare the model of Indonesian agriculture in C. Geertz, Agricultural Involution: The Process of Ecological Change in Indonesia (Berkeley, 1965).
S. Epstein, South India: Yesterday, Today, Tomorrow (Macmillan, 1973, pp. 207–11
e.g. in a ‘mode of reproduction rather than production’ as in C. Meillassoux, Jnl. of Peasant Studies, 1, 1, 1973
M. Schmink, ‘Women and urban industrial development in Brazil’, mimeo for IDS Conference on ‘Women, The Working Poor and the Informal Sector’, IDS, Brighton, 1980, pp. 9–10
Sharecropping may be somewhat less ‘attractive’ than owner-occupancy; for a review of the Marshall-Cheung debate and important recent evidence, see C. Bell, ‘Alternative Theories of Sharecropping: Some Tests Using Evidence from Northeast India’, Jnl. of Dev. Studies, 13, 4 (1977).
The evidence on the size-yield relationship is reviewed in R. A. Berry and W. R. Cline, Agrarian Structure and Productivity in Developing Countries (Johns Hopkins University Press, Baltimore, 1979), especially Appendix A by S. S. Bhalla.
See inter alia M. Lipton, ‘Inter-farm, inter-regional and farm-nonfarm income distribution: the impact of the new cereal varieties’, World Development, 6, 3 (1978).
M. Lipton, ‘Towards a theory of land reform’, in D. Lehmann (ed.), Agrarian Reform and Agrarian Reformism (Faber, 1974).
F. Engels, The Peasant Question in France and Germany, republished in K. Marx and F. Engels, Selected Works (Foreign Languages Publishing House, Moscow, 1951), Vol. 2, pp. 392–4
K. Kautsky, Die Agrarfrange (Dietz, Stuttgart, 1899), pp. 7–10.
N. Heyzer and K. Young, ‘Women, the working poor and the informal sector: towards a framework of analysis’, mimeo for IDS Conference, IDS, Brighton, 1980, pp. 7–8.
R. Bromley, ‘Introduction: the urban informal sector: why is it worth discussing?’, World Development, 6, 9/10, (1978), 1034–5, claims nine defects of the IS concept, but they are reducible to the three listed by Heyzer and Young.
On ‘concepts with blurred edges’, see L. Wittgenstein, Philosophical Investigations, 2nd edn (Oxford, 1958), p. 34 (I. 71).
On the concept-object relationship without ‘blurred edges’, see G. Frege, ‘On concept and object’, in P. Geach and M. Black (eds), Translations from the Philosophical Writings of Gottlob Frege, 2nd edn (Oxford, 1966).
B. Harriss, ‘Quasi-formal employment structures and behaviour in the unorganised urban economy, and the reverse: some evidence from South India’, World Development, 6, 9/10, (1978), 1077.
P. R. Souza and V. E. Tokman, ‘The informal urban sector in Latin America’, International Labour Review, 114, 3 (November–December 1976), 356–7, and 359, fn. 1.
This is avoided, and the methodology thereby much improved in V. E. Tokman in Institute of Social Studies (The Hague) Developing Societies: the Next Twenty-five years (Nijhoff, 1979), where the IS-poverty overlap is shown empirically to be large.
S. V. Sethuraman, ‘The informal sector: concept, measurement, policy’, International Labour Review, 114, 1 (July–August 1976), 76
M. P. van Dijk, ‘Success of small enterpreneurs in the informal sector of Ouagadougou (Upper Volta)’, mimeo, IEDES Seminar, Paris, 1979, p. 2, measures it by deducting formal employment and unemployment from the active urban population.
Sethuraman, p. 77, states that the ILO samples excluded banking from IS (despite the large informal urban banking sector: T. Timberg, Informal Credit Markets in India (World Bank, August 1979)
G. Garrido-Leca and G. T. O’Mara, The Urban Informal Credit Market in a Developing Country under Financial Repression: the Peruvian Case, Univ. of Texas, 1974) and selected IS enterprises only from ‘manufacturing, construction, transport, trade and services’
See N. Heyzer, ‘Urban poverty, women and the informal sector in selected Third World countries: an overview’, mimeo, IDS, 1979, pp. 7–8.
ILO, Employment, Incomes and Equality: a strategy for increasing productive employment in Kenya (Geneva, 1972).
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D. Mazumdar, ‘The urban informal sector’, Staff Working Paper No. 211, World Bank, 1975.
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A. Middleton, ‘Petty enterprises and relations of production: some inferences from Ecuadorean data’, mimeo, Development Studies Association Conference, Reading, September 1979.
C. Moser, ‘Informal sector or petty commodity production: dualism or dependence in economic development?’, World Development, 6, 9/10, 1978
ILO, Employment, Incomes and Equality: a strategy for increasing productive employment in Kenya (Geneva, 1972), p. 6
ILO, Employment, Incomes and Equality: a strategy for increasing productive employment in Kenya (Geneva, 1972), p. 6
ILO, Employment, Incomes and Equality: a strategy for increasing productive employment in Kenya (Geneva, 1972), p. 6
H. W. Singer, H. Lubell, V. Tokman and P. R. Souza, ‘Policies for the urban informal sector in Brazil’, mimeo (Consultants’ Memorandum for ‘Mesa Redonda sobre Politicas de Emprego para o Sector Informal Urbano’, Brazilia, Feb. 1976), ILO, Geneva, 1976, pp. 5–6.
For an overview of State action, often with collusion from established IS enterprises, to keep IS newcomers off prime sites, see J. Linn, Policies for Efficient and Equitable Growth of Cities in Developing Countries, Staff Working Paper no. 342, World Bank, 1979, p. 62.
Moser, pp. 1060–1, citing and supporting F. Bienefeld and M. Godfrey, ‘Measuring unemployment and the informal sector’, Bull. Inst. Dev. Studies. 6, 3 (1975).
To grasp the unviability of these narrow exclusions-by-definition of wage-labour from FMP, consider the practice, in parts of Northern Nigeria, of cash payments between husband and wife for labour on the family farm: P. Hill, Rural Hausa: a village and its setting (Cambridge, 1972).
P. Marris and A. Somerset, African Businessmen: a Study of Enterpreneurship and Development in Kenya (Routledge, 1971), pp. 16–17, 139–140.
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See F. Dovring, ‘The share of agriculture in a growing population’, FAO Monthly Bull. Ag. Ec. Stat., VIII, 8–9 (1959).
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cp. P. Marris, ‘Social perspectives’, in D. Seers and L. Joy (eds), Development in a Divided World (Penguin, 1971), p. 90
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and several studies discussed in J. Connell, Labour Utilisation: an Annotated Bibliography of Village Studies (IDS, 1975)
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See also H. Barnum and L. Squire, A Model of an Agricultural Household, Staff Occasional Paper no. 27, World Bank, Washington, 1979
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In Bombay, only 15.5 % of sampled factory workers were immigrants with below 10 years’ residence — as against 46.4 % of ‘small-scale’ and 61.6% of casual workers (mutually mobile groups, of employees only in this sample, but largely in the IS): Mazumdar, Paradigms in the Study of Urban Labor Markets in LDCs: A Reassessment in the Light of an Empirical Survey in Bombay City Staff Working Paper No 360, World Bank, Washington DC, 1979 p. 26.
R. Mohan, Population, Income and Employment in a Developing Metropolis: a Spatial Analysis of Bogota. Colombia, Urban and Regional Reports, no. 79-11, World Bank, Washington, 1979, pp. 84.
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Among recent espousals of higher labour-productivity as the main objective for FMP are F. Bienefeld, ‘The informal sector debate: much ado about something’, mimeo, IDS Seminar on ‘Women, the Working Poor and the Informal Sector’, Brighton, 1980, pp. 1–3
M. Greeley, ‘Rural technology, rural institutions and the rural poorest’, Jnl of Devel. Studies (1980).
Compare B. Harriss, ‘Paddy milling: problems in policy and choice of technology’ in B. Farmer (ed.), Green Revolution? (Macmillan, 1977).
For evidence for the propositions in the last two paragraphs, see M. Lipton, ‘Agricultural finance and rural credit in poor countries’, World Development, 4, 7 (1976)
and ‘Agricultural Risk, Rural Credit and the Inefficiency of Inequality’, in J. Boussard et al.. (eds.), Risk, Uncertainty and Agricultural Development SEARCA/ADC, Manila/New York, 1976)
van Dijk, ‘Success … Ouagadougou’, p. 9; All-India Debt and Investment Survey 1971–2 (Reserve Bank of India, 1976), pp. 166–9
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© 1984 International Economic Association
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Lipton, M. (1984). Family, Fungibility and Formality: Rural Advantages of Informal Non-farm Enterprise versus the Urban-formal State. In: Amin, S. (eds) Human Resources, Employment and Development Volume 5: Developing Countries. International Economic Association Series. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-17461-4_10
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