The informal economy or sector has become the preferred term for unregulated economic activities, in both rich and poor countries. Based on Weber’s theory of rationalization, it was coined during the early 1970s in response to proliferating self- employment and casual labour in Third World cities. Now its range of reference is very wide, embracing everything from high-level political corruption to home improvement. The phenomenon is real enough and of some antiquity, but its definition remains elusive. Operating beyond the rules of bureaucracy, the informal economy may be understood dialectically as division, content, negation or residue.
KeywordsBureaucracy Capital accumulation Economic development in the long run Exploitation Informal economy Labour surplus economies Poverty Protection Rational enterprise Rule of law Rural–urban migration Self-employment Weber, M.
- Bromley, R., ed. 1978. The urban informal sector: Critical perspectives. World Development 6(9–10).Google Scholar
- Davis, M. 2006. Planet of slums. New York: Verso.Google Scholar
- De Soto, H. 2000. The mystery of capital: Why capitalism triumphs in the west and fails everywhere else. London: Bantam.Google Scholar
- Geertz, C. 1963. Peddlers and princes. Chicago: University of Chicago Press.Google Scholar
- Hart, K. 2006. Bureaucratic form and the informal economy. In Linking the formal and informal economy: Concepts and policies, ed. B. Guha-Khasnobis, R. Kanbur, and E. Ostrom. Oxford: Oxford University Press.Google Scholar
- ILO (International Labour Organization). 1972. Incomes, employment and equality in Kenya. Geneva: ILO.Google Scholar
- Lewis, O. 1964. La Vida: A Puerto Rican family in the culture of poverty – San Juan and New York. New York: Random House.Google Scholar
- Mayhew, H. 1861–2. London labour and the London poor, 4 vols. London.Google Scholar
- Pahl, R. 1984. Divisions of labour. Oxford: Basil Blackwell.Google Scholar
- Weber, M. 1981. General economic history. New Brunswick: Transaction Publishers.Google Scholar