One's view of it changes depending on where you sit and who you are. For many western economies, it is still seen as something to be repressed and/or eradicated, not least to reduce the tax gap. At the very best, it is seen by western governments as something to be transformed into formal work using various incentives. It is seldom seen as something to be tolerated and left toits own devices. This is very different in the 'third world'/majority world where a rather different perception exists of the shadow economy. The interesting question of course is why the informal sector is so little studied when it is so sizeable as a proportion of the world's work and why the formal economy remains seen as the dominant form of work which is extensive, growing and all-pervasive. the reality, of course, is very different

Yes I agree to you point Dr. Williams, but I fear there is a substantial portion of Shadow Economy representing informal sector comprising of street vendors and bazaars existing and still flourishing in the Western World itself. Repressing or eradicating would mean driving those people, even in the developed world, out of their business and livelihood, without any proper recourse to other alternative arrangements.

So, what incentives do you think the government should extend to transform informal sector into formal one. It is easier said than done, when at a time western governments are preaching the doctrines of austerity measures?

Yes, the perception in the developing world is entirely different, since most of the business being conducted in less developed world consists of the shadow economy. Organization of those into more coherent, and transforming those into more organized retail/wholesale format is perhaps a better answer than repression and eradication.

(Your words specifying "repression" and "eradication" much echoes 'Ghetto Economy'). I am against such boycotting informal sector outright.

Ghetto Economic Development: A Survey - JStor

www.jstor.org/stable/2721862by B Harrison - 1974

Sincerely,

Sidharta

Some examples suggest that Informal Economy is being encouraged in many developed countries across Europe. But indeed, their organization is different from the organization of informal economies in the developing world.

[PDF]

Informal workers across Europe: Evidence from 30 European ... - IZA

www.iza.org/conference_files/InfoETE2011/hazans_m1142.pd

Informal Economy Pulls Migrants to Europe

www.policyinnovations.org › Ideas › Commentary

A report which reviews the enabling measures being used to transform undeclared work into declared work in European nations can be found in the following link.

http://www.eurofound.europa.eu/publications/htmlfiles/ef0813.htm

I agree with you that repressiona nd eradication is not the way forward.

Also look at

http://www.eurofound.europa.eu/pubdocs/2008/13/en/1/ef0813en.pdf

Much Thanks for your reference Dr. Williams. Yes, the point perhaps you meant is exploitation of labor in the informal sector, illegal jobs, wage exploitation (underpaid), child labor, and workers rights which are not enforced in the informal sector, when compared to the formal sector. The paper you suggested is interesting and seems to highlight these issues, I am going through it in some detail.

Regards,

Sidharta