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"Informelle Wirtschaft"
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The state of labour : the global financial crisis and its impact
This book analyses the adverse effects of globalisation and liberalisation - manifest in the increased financialisation of capital and the concomitant global financial crisis - on the labour force in different countries, especially the developing ones. It also critically re-assesses the role of informal sector in providing employment, and the potential of trade unions in protecting workers' interests.
Book
Hidden Potential
Informality remains widespread in South Asia despite decades of economic growth. The low earnings and high vulnerability in the informal sector make this a major development issue for the region. Yet, there is no consensus on its causes and consequences, with the debate polarized between a view that informality is a problem of regulatory evasion and should be eradicated, and another that equates informality with economic exclusion. Recent advances in analyzing informality as the outcome of firm dynamics in distorted economic environments can help reconcile them. Building on these advances, the approach adopted in this volume clarifies that there are different types of informality, with different drivers and consequences. The report has four main messages that underscore the need for a multipronged strategy. First, informality in South Asia is dominated by firms that happen to be outside the purview of regulations because they are small, as opposed to those that remain small to escape regulations. Second, reforms of business regulations tend to have small direct effects on the informal sector, although they could have sizable indirect impacts on it if they succeed in removing major inefficiencies in the broader economy. Third, e-commerce platforms offer new opportunities to informal firms and workers, but many of them lack complementary skills or credit to benefit from such technologies. Fourth, a combination of contributory and non-contributory programs recognizing the heterogenous saving capacities of informal workers may be necessary to achieve more universal coverage of social insurance
Book
Firms, Informality, and Development
This paper develops and estimates an equilibrium model where heterogeneous firms can exploit two margins of informality: (i) not register their business, the extensive margin; and (ii) hire workers “off the books,” the intensive margin. The model encompasses the main competing frameworks for understanding informality and provides a natural setting to infer their empirical relevance. The counterfactual analysis shows that once the intensive margin is accounted for, firm and labor informality need not move in the same direction as a result of policy changes. Lower informality can be, but is not necessarily associated with higher output, TFP, or welfare.
Journal Article
Hidden Potential
Informality remains widespread in South Asia despite decades of economic growth. The low earnings and high vulnerability in the informal sector make this a major development issue for the region. Yet, there is no consensus on its causes and consequences, with the debate polarized between a view that informality is a problem of regulatory evasion and should be eradicated, and another which equates informality with economic exclusion. These views are at odds with the heterogeneity observed among informal firms. Recent advances in analyzing informality as the outcome of firm dynamics in distorted economic environments can help reconcile them. Building on these advances, the approach adopted in this volume clarifies that there are different types of informality, with different drivers and consequences. Using this approach, the papers in this volume revisit old questions about the relationship of informality to regulation and taxation, and also pose new ones, such as how digital technologies and multi-faceted policy designs can improve prospects in the informal sector. They have four main messages. First, informality in South Asia is dominated by firms that happen to be outside the purview of regulations because they are small, as opposed to those that remain small to escape regulations. Second, reforms of business regulations tend to have small direct effects on the informal sector, though they could have sizable indirect impacts on it if they succeed in removing major inefficiencies in the broader economy. Third, e-commerce platforms (and similar technologies) offer new opportunities to informal firms and workers, but many of them lack complementary skills or credit to benefit from such technologies. Fourth, a combination of contributory and non-contributory programs recognizing the heterogenous saving capacities of informal workers may be necessary to achieve more universal coverage of social insurance. A multi-pronged strategy is needed to tackle the developmental challenges presented by informality
Book
Informality and Development
In developing countries, informal firms account for up to half of economic activity. They provide livelihood for billions of people. Yet their role in economic development remains controversial with some viewing informality as pent-up potential and others viewing informality as a parasitic organizational form that hinders economic growth. In this paper, we assess these perspectives. We argue that the evidence is most consistent with dual models, in which informality arises out of poverty and the informal and formal sectors are very different. It seems that informal firms have low productivity and produce low-quality products; and, consequently, they do not pose a threat to the formal firms. Economic growth comes from the formal sector, that is, from firms run by educated entrepreneurs and exhibiting much higher levels of productivity. The expansion of the formal sector leads to the decline of the informal sector in relative and eventually absolute terms. A few informal firms convert to formality, but more generally they disappear because they cannot compete with the much more-productive formal firms.
Journal Article
Corruption and New Product Innovation: Examining Firms' Ethical Dilemmas in Transition Economies
Corruption as a non-market strategy for firms has gained increasing attention in the field of strategy management. However, the effect of corruption on innovation is unclear, especially in the context of transition economies. Using institutional theory, we examine the relationship between corruption and new product innovation and identify the contextual conditions of the relationship. Using the World Bank Enterprise Survey data from China, our empirical results show that corruption has a positive effect on firms' new product innovation. Moreover, we find that policy instability and competitive threats from the informal sector positively moderate the relationship between corruption and new product innovation. Using post hoc analysis, we find that the potentially positive effect of corruption on new product innovation is the consequence of inherent institutional weaknesses in transition economies; as the level of institutional development increases, the effect of corruption on firms' new product innovation will gradually decrease. Overall, our findings provide new insights into understanding corrupt behaviors in transition economies and present managerial implications for firms' ethical dilemmas in a transition economy context. We argue that the key to overcoming these ethical dilemmas lies in promoting pro-market institutional reform to reduce the potential benefits of corruption.
Journal Article
Mechanisms of invisibility
In the mid-1980s, Daniels coined the term ‘invisible work’ to characterize those types of women’s unpaid labour – housework and volunteer work – which had been culturally and economically devalued. Scholars have since applied this term to many types of labour, yet there is little clarity or consensus as to what ‘invisibility’ means and what mechanisms produce it. Through an in-depth analysis of this far-reaching literature, the present article seeks to reconstruct ‘invisible work’ as a more robust analytical concept. It argues that work is made invisible through three intersecting sociological mechanisms – here identified as cultural, legal and spatial mechanisms of invisibility. Though they differ in function and degree, each of these mechanisms obscures the fact that work is performed and therefore contributes to its economic devaluation. Ultimately, this revised concept of invisible work offers scholars a new analytic tool to untangle the systems that produce and reproduce disadvantage for workers.
Journal Article
Economic and political institutions and entry into formal and informal entrepreneurship
We investigated the influence of economic and political institutions on the prevalence rate of formal and informal entrepreneurship across 18 countries in the Asia-Pacific region during the period 2001–2010. We found the quality of institutions to exercise a substantial influence on both formal and informal entrepreneurship. One standard-deviation increase in the quality of economic and political institutions could double the rates of formal entrepreneurship and halve the rates of informal entrepreneurship. The two types of institutions had a complementary effect on driving entry into formal entrepreneurship, whereas only direct effects were observed for informal entry.
Journal Article
Wages and Informality in Developing Countries
We develop an equilibrium wage-posting model with heterogeneous firms that decide to locate in the formal or the informal sector and workers who search randomly on and off the job. We estimate the model on Brazilian labor force survey data. In equilibrium, firms of equal productivity locate in different sectors, a fact observed in the data. Wages are characterized by compensating differentials. We show that tightening enforcement does not increase unemployment and increases wages, total output, and welfare by enabling better allocation of workers to higher productivity jobs and improving competition in the formal labor market.
Journal Article