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The nature of the Informal Economy

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The Informal Economy

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Abstract

Now that the empirical findings have been presented in the three preceding chapters, this chapter brings some of the most relevant ones together in order to make statements about the regulation and the nature of the informal economy. It begins by discussing the usefulness of responsive regulation theory for regulating the informal economy. Subsequently, some main characteristics of the informal economy are discussed on the basis of the empirical results, which will in turn lead to a re-conceptualisation of the informal economy.

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Notes

  1. 1.

    This reflects the cumulative nature of the pyramid.

  2. 2.

    This proposition is in line with responsive regulation theory and also, in fact, with risk-based regulation (Tombs and Whyte 2013).

  3. 3.

    Not for the social inspectorate services and tax office, but for the local and federal police.

  4. 4.

    Insofar this can be seen as a sign of effectiveness.

  5. 5.

    I use the word ‘seem’ to highlight the hypothetical nature of this premise as this book did not aim at studying the effectiveness of regulation and enforcement.

  6. 6.

    See RQ 3 for a discussion of the income portfolio of workers in the three cases.

  7. 7.

    To be fully correct: the sexual activities themselves are not visible, but the advertisement for the services (by women sitting or standing in front of windows in particular clothing and make-up) is visible. Thus, there cannot be any misunderstanding as to the activities that take place inside the premises.

  8. 8.

    Fiscal fraud can be defined as infringing on stipulations from different fiscal codes with deceptive intention or intention to cause harm (De Nauw 2007, 3, in Pacolet and De Wispelaere 2009, 36).

  9. 9.

    The idea of representing the relation between the formal, informal and criminal economies in this way is based on Coletto (2010).

  10. 10.

    Of course, if detection is followed by sanctions (administrative or penal), some rectifications are possible.

  11. 11.

    Surprisingly, one author (Martha Chen) considers the criminal economy as part of the informal economy in one paper (Chen 2004) but not in another one (Chen et al. 2001). General statements are made in both papers: it is not the case that in one paper a working definition is presented only for empirical purposes.

  12. 12.

    According to Ponsaers (2013), this concept refers to a variety of individuals interacting in marketplaces, where goods and services are bought and sold without making a difference between their legal and illegal nature. Applied to contemporary cities, the concept refers to the coexistence of legality and illegality.

  13. 13.

    For instance, is not providing compulsory safety helmets—which is an infraction on occupational health and safety regulation and an aspect of special criminal law—part of the informal economy? It is not certain that all researchers on the informal economy will perceive this as informality.

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  1. Faculty of Law, Ghent University, Ghent, Belgium

    Dominique Boels

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Boels, D. (2016). The nature of the Informal Economy. In: The Informal Economy. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-43123-9_6

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