Informal Sector & Property Rights

The informal economy comprises half to three-quarters of all non-agricultural employees in developing countries. In countries with large informal sectors, business activities go unrecorded, taxes are not paid, opportunities for corruption are rampant, and many citizens are not able to participate in public policymaking. Informality is a symptom of underlying institutional problems. To harness the capital locked in the informal sector, governments must offer incentives that encourage entrepreneurs to formalize, such as a simplified business registration process.

CIPE and its partners have developed key solutions that can help bring entrepreneurs into the formal economy. One of the most important factors is private property rights – in many developing countries, there is a gap between what is “on the books” and what happens in real life. To effectively reduce informality, governments must ensure that property rights are clearly defined, strongly enforced, and accessible to all citizens.

Informal Sector & Property Rights Programs at CIPE

Through its programs and international partnerships, CIPE helps formalize the informal sector and improve property rights protection in these areas:

  • Raise awareness about the extent of the informal sector in economies.
  • Promote reforms to remove barriers to business that fuel informality.
  • Strengthen the legal framework for well-defined and enforceable property rights.
  • Emphasize the need for institutions that make property rights available to all citizens.
  • Empower women and other groups often excluded from formal property ownership.

Read more about informal sector and property rights programs at CIPE.

Related Publications

Future Directions of Research in the Coasean Tradition

Article at a Glance:

  • Ronald Coase’s key insights about the theory of the firm and transaction costs continue to influence the economic research agenda today.
  • Within a firm, the price system and constantly contracted tasks would be more costly than authoritative allocation of resources and labor.
  • The implication of Coase’s work for corporate governance and the imperfect aspects of prices as a coordinating mechanism in the economy require further research.

Beyond Aid: the Integration of Sustainable Development in a Coherent International Agenda

Article at a glance:

  • Successful implementation of the post-2015 development agenda will depend on the ability of the many diverse actors and stakeholders to adapt their behavior in support of local leadership, capabilities, and responsibility.
  • The Busan Partnership Declaration outlines an emerging consensus, premised on principles of local ownership, a focus on results, inclusive partnerships, and mutual transparency and accountability.
  • More than all other non-state actors, the private sector will drive the pursuit of inclusive and sustainable economic growth and job creation and the transition to sustainable patterns of production and consumption.

CIPE

Center for International Private Enterprise
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