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

The Long Road of Economic and Democratic Reform: Marking Ten Years of CIPE in Pakistan

On the occasion of the 10th anniversary of its Pakistan office, CIPE seeks both to celebrate its accomplishments and learn from the challenges of its projects. CIPE is committed to deep engagement, supporting private sector- and civil society-led programs that can advance reforms to unleash the country’s vast economic potential.

Article at a glance:

  • Policy reform must be rooted in the business community and can be sustained by strong think tanks capable of monitoring and assessing government performance.
  • Strengthening Pakistan’s democratic institutions must involve support for economic journalism to improve citizens’ access to information about reforms.
  • Building links among Pakistani women entrepreneurs, and including them in broader regional networks, is a key factor in improving women’s lives in the country.

CIPE

Center for International Private Enterprise
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