A Critical Evaluation of Romantic Depictions of the Informal Economy
Review of Social Economy Vol. 66, No. 3, pp. 297-323, 2008
Posted: 13 Dec 2015
Date Written: December 12, 2008
The conventional portrayal of the formal/informal economy dichotomy endows the formal economy with positive attributes and the informal economy with negative characteristics. Recently, this hierarchy has been inverted by scholars portraying the informal economy positively as a chosen alternative and path to progress. This paper evaluates critically this emergent representation. Reporting a study of the informal economy in Ukraine conducted in 2005/06, a diverse array of informal economic practices are identified that amongst some groups represent an involuntary means of livelihood but amongst others a chosen alternative and some of which seem beneficial and others deleterious to economic development and social cohesion. The outcome is a call to transcend simplistic binary hierarchical depictions of the formal economy as “bad”/informal economy ias “good” (or the inverse) and towards towards a finer-grained and more and more nuanced understanding of the diverse forms of informal work and their varying consequences for economic development and social cohesion.
Keywords: informal sector, underground economy, economic development, Ukraine, post-socialist societies
JEL Classification: H26, J46, K42, O17
Suggested Citation: Suggested Citation