The formal-informal economy dualism in a retrospective of economic thought since the 1940s

Clement, Christine

The formal-informal economy dualism in a retrospective of economic thought since the 1940s

dc.contributor.author	Clement, Christine	de
dc.date.accessioned	2024-04-08T08:51:00Z
dc.date.available	2024-04-08T08:51:00Z
dc.date.created	2015-03-05
dc.date.issued	2015
dc.description.abstract	Central to the scientific debate about the ‘informal sector’ and the validity of the concept used to be a twofold challenge. The crux laid not only in the objective to explain the widely visible persistence of the informal economy in developing countries, but also in the identification of its roots and the proliferation conditions to be met ex ante. The present paper aims at establishing a link between the theories on informality and marginalization which is another important issue that has arisen within the discussions on the causes of persistent poverty a few years ago. Both concepts are interlinked and self-enforcing. On the macroeconomic level, any economy – be it formal or informal – consists of a set of different economic sectors and any of these sectors basically consists of an accumulation of people on the microeconomic level. Every time one looks at the macro level where political and economic conditions frame the dynamics of the formal and the informal economy, one has at the same time to look at the micro-level where the social and economic conditions determine the incentives for every actor to participate either in the formal, the informal or in both economies. Informality has multiple sources depending on whether the agent took a voluntary choice or had to involuntary opt-out from an institutional system. In this paper, the connection between informality and involuntary exclusion shall be examined in a retrospective of economic thought since the 1940s. The roots of the intertwined concepts of informality and economic exclusion have been laid in the dual economy theories of the 1940s-1950s. Recapitulating the works of Julius BOEKE, Arthur LEWIS, John HARRIS & Michael TODARO, Albert HIRSCHMAN and other socio-economists of that time, it will be argued that one of the necessary reasons for the persistence of the informal economy in developing countries is the dualism in institutional frameworks that leads to the marginalization of social groups and their subsequent exclusion from formal economic activities. By referring to the groundbreaking Africa studies of Keith HART (1971) and the INTERNATIONAL LABOUR ORGANIZATION (1972), special emphasis will be given to the causal reciprocity between informality, marginalization and economic exclusion. The paper closes with a brief overview of current schools of thought that deal very differently with the issue of informality and economic exclusion.	en
dc.identifier.swb	427201527
dc.identifier.uri	https://hohpublica.uni-hohenheim.de/handle/123456789/5886
dc.identifier.urn	urn:nbn:de:bsz:100-opus-10572
dc.language.iso	eng
dc.relation.ispartofseries	Schriftenreihe des Promotionsschwerpunkts Globalisierung und Beschäftigung; 43
dc.rights.license	publ-ohne-pod	en
dc.rights.license	publ-ohne-pod	de
dc.rights.uri	http://opus.uni-hohenheim.de/doku/lic_ubh.php
dc.subject	Economic dualism	en
dc.subject	Informal sector	en
dc.subject	Informal economy	en
dc.subject	Informality	en
dc.subject	Marginalization	en
dc.subject	Economic exclusion	en
dc.subject	Involuntary exclusion	en
dc.subject	Institutions	en
dc.subject.ddc	330
dc.subject.gnd	Wirtschaftlicher Dualismus	de
dc.subject.gnd	Schattenwirtschaft	de
dc.title	The formal-informal economy dualism in a retrospective of economic thought since the 1940s	de
dc.type.dcmi	Text	de
dc.type.dini	WorkingPaper	de
local.access	uneingeschränkter Zugriff	en
local.access	uneingeschränkter Zugriff	de
local.bibliographicCitation.publisherPlace	Universität Hohenheim	de
local.faculty.number	3	de
local.institute.number	520	de
local.opus.number	1057
local.series.issueNumber	43
local.series.title	Schriftenreihe des Promotionsschwerpunkts Globalisierung und Beschäftigung
local.university	Universität Hohenheim	de
local.university.faculty	Faculty of Business, Economics and Social Sciences	en
local.university.faculty	Fakultät Wirtschafts- und Sozialwissenschaften	de
local.university.institute	Institute for Economics	en
local.university.institute	Institut für Volkswirtschaftslehre	de

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