Definition of Informal Economy

Bottom of the Pyramid > Forum > Definition of Informal Economy

Definition of Informal Economy
Elwin Poortman, Analyst, Netherlands, Premium Member
People that belong to the bottom part of the economic pyramid are often unable to generate income from the so-called formal economy, and therefore they aim to sustain themselves via informal economic activities. But over the last 50 years, the definition of the "informal economy", has become rather blurred, vague or even empty.
To show the difficulty of drafting a one-fits all definition, the most diverse definitions on what characterizes the informal economy, as categorized by Godfrey (2011), have been listed below:
  • The informal economy comprises unofficial economic activities that are conducted by unregistered firms or by registered firms but hidden from taxation (LaPorta & Schleifer).
  • The informal economy is unregulated by the institutions of society, in a legal and social environment in which similar activities are regulated (Castells & Portes).
  • The informal economy activities takes place largely in personal and intimate domains; reflecting t...Sign up

Special Interest Group Leader

Interested? Sign up for free.

Bottom of the Pyramid
Best Practices


About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
2019 12manage - The Executive Fast Track. V15.1 - Last updated: 22-7-2019. All names of their owners.