Rising Informality - Reversing the Tide
Author: Vincent Palmade and Andrea Anayiotos Date: 8/1/2005 (PDF, 200KB)
By some estimates more than 30 percent of the developing world's GDP and 70 percent of its workers are outside the official economy. The implications: Most small firms are trapped in low-productivity operations with little access to finance, key government services, and formal customers. Workers lack safety and social protection. And bigger, better-connected firms use "unfair" informal practices to beat out more productive formal competitors. The result is slower economic growth and a growing social divide between the informal and formal parts of society.