Incorporating Informality: 
Spatial interventions in informal markets as economic policy indicators

In recent years, an expanding range of formal-informal linkages, such as the taxation of the informal sector and the creation of informal jobs by state institutions, has increasingly focussed attention on the networked operations of informal markets. Often triggered by political upheaval, economic destabilisation, migratory movements and new labour situations, informal markets shape a form of alternative economic governance wherever and whenever institutional protocols have come to a deadlock. With the informal sector estimated to account for more than half of all economic activity worldwide, a more decisive engagement with economic informality by the world’s governing bodies is increasingly being seen as critical to achieving a more sustainable form of global development. However, current policy approaches are still torn between framing informality as the root problem – as a “drag on growth”, as a recent World Bank report put it – and attempts to recognise people involved in the informal economy as valid economic actors and to tap into their entrepreneurial capacities.

The research project hypothesises that these differences are indicative of the current tensions around the development of novel forms of formal-informal linkages, especially around new forms of economic governance that go beyond state-oriented notions of how to generate political order and economic growth. Its key aim is to gain a clearer picture of the different motivations, practices and effects of these divergent approaches to economic informality. Based on the findings of a global survey study of the political pressure on informal markets carried out by Helge Mooshammer and Peter Mörtenböck between 2010 and 2015, the project investigates how the spectrum of policy engagement with informal trade is applied to different physical marketplaces. With the help of local experts, the research team conducts case studies of twelve marketplaces selected from the previous research project, including amongst others, Bangkok’s Saphan Lek, Luanda’s Roque Santeiro, São Paulo’s Feirinha da Madrugada and Brčko’s Arizona Market.

The findings of these field studies are documented and analysed through a newly developed multidimensional mapping matrix that classifies four distinct strategies of engagement with informal markets, ranging from the forced closure or relocation of marketplaces to the infrastructural improvement of market facilities or appropriation of entrepreneurial undertakings. Using maps, charts, diagrams and texts, the project studies distinct incorporations of informality – both in the sense of absorbing the economic capacities of informal activities and in the sense of adopting informal methods in the conduct of the formal. These findings are expected to provide a vital contribution to public debates about emergent forms of hybrid economic governance.

Project director:
Dr Helge Mooshammer
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Funded by:
Austrian Science Fund (FWF): P 30232