Geography Reference
In-Depth Information
a more positive interest in the 'working poor' and Keith Hart coined the
sector 'informal' in 1973 in order to highlight it as a haven for creative
entrepreneurs. While dualist perspectives have been criticized for fail-
ing to recognize the ways in which the economic sectors are inextricably
linked, the premise that economies can be broken down into two or
more segments has endured. From the 1980s onwards, the idea of an
informal-formal continuum along which all economic activities take
place has gained support.
Given its heterogeneous character, it is very difficult accurately to
define what constitutes the informal sector in any nation. One way of
understanding the huge body of literature on definitions is to differenti-
ate between traditional approaches which have focused on the 'enter-
prise' and more recent interpretations that focus on the individual
'worker' (Lloyd-Evans, 2008a).
Traditional Enterprise Perspectives - Size, Legality
and Mode of Production
In the 1970s, traditional definitions of the informal sector focused on
the nature of the business. From an enterprise perspective, definitions
of informal activities have focused on three main factors: enterprise
size, legality and the mode of production, although there is considerable
overlap between them:
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•
Size
- many enterprise definitions started with the premise that
informal operations are 'micro' or small-scale consisting of less than
five workers, although size alone is a limited characteristic given the
abundance of small-scale formal businesses and the recent surge in
larger informal enterprises.
•
Legality
-
it is the unregistered and untaxed element of the infor-
mal sector that has been at the centre of most past and present
definitions. Informal enterprises tend to exist outside the regulatory
state apparatus and they are rarely registered, licensed, taxed or
subject to statutory labour force regulations or social protection
laws. De Soto's controversial topic,
The Other Path
(1989), viewed
the Peruvian informal sector as a response by the poor to the
bureaucratic power of the state and its excessive regulatory frame-
work. He argues that the informal sector consisted of 'plucky
micro-entrepreneurs' who choose to operate informally to avoid the
costs of formal registration and legislation. Non-regulation by the
