The Informal Economy as a Path to Expanding Opportunities

What is it about?

Is the informal economy a help or a hindrance to expanding the opportunities of the poor? Conventionally, it has been deemed a hindrance; an unproductive sphere that is deleterious to wider economic development and growth. Recently, however, a more positive depiction has emerged viewing it as a useful means of expanding the opportunities of the poor. This report reviews the arguments and evidence for viewing it more positively and how it might be harnessed in order to help expand the opportunities of the poor.

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Why is it important?

A comprehensive evaluation is required of the various purported negative and positive impacts of the informal economy. Until these are understood, it cannot be known whether the informal economy has a net positive or negative impact on expanding the opportunities of the poor. What is certain, however, is that eradicating the informal economy can no longer be assumed to be the way forward. Not only is a wider consideration required of the potential positive impacts of this sphere on expanding opportunities of the poor but also more creative approaches regarding how informality may be harnessed to that end.

Perspectives