Geography Reference
In-Depth Information
38
Informal sector activity in the third world
city
Sylvia Chant
nature, were arguably of dubious worth to national
development. Activities falling under this heading
included prostitution, begging, pickpocketing and
scavenging (Hart 1973). Hart's essentially positive
conceptualisation of the legitimate wing of the
'informal sector' was taken up by the Kenya
Mission of the ILO, with early definitions
encompassing ease of entry, small size, individual
or family ownership of enterprises, labour-
intensive production methods, low levels of skill,
capital and technology, and unregulated and
competitive markets (ILO 1972; see also Table
38.1).
While it remains true that informal enterprises
are often small in scale, use rudimentary
technology and are characterised by self-
employment or family labour, Roberts (1994: p.
6) asserts that the most generally accepted
contemporary definition of the informal sector is
'income-generating activities unregulated by the
state in contexts where similar activities are so
regulated'. Further noting that the formal sector is
also characterised by a growing degree of informal
labour arrangements, Roberts argues that 'The
persisting interest in the idea of an informal
economy lies not in its analytic precision, but
because it is a useful tool in analysing the changing
basis of economic regulation'
(ibid.)
.
Definitions and characterisations of the
informal sector have formed a major arena of
debate over the years and are discussed in
greater detail below. Other issues that have
INTRODUCTION
Although the term 'informal sector' has been
described as an 'unclear…but popular short-hand'
(Gilbert 1998: p. 65), it is generally used to refer to
a wide spectrum of 'precarious' or 'sub-terranean'
employment found in urban areas of developing
countries (Portes and Schauffler 1993: p. 33).
The term was first coined back in the early
1970s when, in the wake of massive rural-urban
migration and limited labour absorption in the
expanding industrial sector of developing
economies, academics and policy makers became
increasingly interested in how the swelling ranks
of the urban poor were managing to 'get by'. On
the basis of research in Ghana funded by the
International Labour Office (ILO), the
anthropologist Keith Hart found that low-income
people who were unable to find waged work in
import-substitution industries or the public sector
devised wide-ranging and resourceful ways to
generate income. From this, Hart developed the
terms 'formal' and 'informal' employment, to refer
to salaried jobs and self-employment respectively.
He further distinguished between 'legitimate' and
'illegitimate' activities in the informal economy.
The former comprised jobs that made a
contribution to economic growth, albeit in small
ways, such as petty commerce, personal services
and home-based production. 'Illegitimate'
informal activities, on the other hand, described
occupations that, if not necessarily 'criminal' in
