Informal Economy Dynamics in the Global South
Summary
The informal economy in the Global South encompasses a vast and varied array of livelihood strategies that operate beyond formal regulation, taxation or labour protections. It ranges from street vending and home‐based enterprises to digital platform work and unregistered service provision. These activities are shaped by rapid urbanisation, limited formal employment opportunities, constrained social protection systems and evolving technologies. The informal sector often acts as a buffer against economic shocks, adapting through flexible labour arrangements and social networks. Yet it also reproduces vulnerabilities linked to gender, class and spatial inequality. Recent events—from commodity price fluctuations to the Covid-19 pandemic—have revealed both the resilience of informal actors and the precariousness of their livelihoods, prompting calls for more inclusive policy frameworks that integrate social protection, urban planning and digital regulation without undermining the autonomy and innovation inherent in informal practices.
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Informal Economy Dynamics in the Global South publication trend
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Technical terms
Informal economy: Economic activities and enterprises that operate without formal registration, regulation or social protections.
Bottom of the pyramid: Market segment comprising low-income populations targeted by businesses seeking growth through goods and services adapted to constrained resources.
Gig practices: Flexible, short-term work arrangements often mediated by digital platforms, typically lacking standard employment benefits and job security.
Institutional voids: Absence or inadequacy of formal market institutions such as legal frameworks, credit systems or regulatory bodies, often navigated by informal actors through alternative mechanisms.
References
- Crisis Narratives and the African Paradox: African Informal Economies, COVID‐19 and the Decolonization of Social Policy. Development and Change (2022).
- Remote (Dis)engagement: Shifting Corporate Risk to the ‘Bottom of the Pyramid’. Development and Change (2021).
- Network marketing and state legitimacy in China: Regulating trust from physical workplaces to virtual spaces. Economic Anthropology (2021).
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