A large percentage of workers and firms operate in the informal economy, outside the line of sight of governments in emerging market and developing economies. This may hold back the recovery in these economies from the deep recessions caused by the COVID-19 pandemic--unless governments adopt a broad set of policies to address the challenges of widespread informality. This study is the first comprehensive analysis of the extent of informality and its implications for a durable economic recovery and for long-term development. It finds that pervasive informality is associated with significantly weaker economic outcomes--including lower government resources to combat recessions, lower per capita incomes, greater poverty, less financial development, and weaker investment and productivity.

As Zambia plans for extending social protection coverage, this high level of informality will be an important challenge for the social protection system, in particular in terms of coordinating both non-contributory social assistance mechanisms and contributory social insurance programmes. This ...

Over the past two decades, the percentage of the world’s population living on less than a dollar a day has been cut in half. How much of that improvement is because of—or in spite of—globalization? While anti-globalization activists mount loud critiques and the media report breathlessly on globalization’s perils and promises, economists have largely remained silent, in part because of an entrenched institutional divide between those who study poverty and those who study trade and finance. Globalization and Poverty bridges that gap, bringing together experts on both international trade and poverty to provide a detailed view of the effects of globalization on the poor in developing nations, answering such questions as: Do lower import tariffs improve the lives of the poor? Has increased financial integration led to more or less poverty? How have the poor fared during various currency crises? Does food aid hurt or help the poor? Poverty, the contributors show here, has been used as a popular and convenient catchphrase by parties on both sides of the globalization debate to further their respective arguments. Globalization and Poverty provides the more nuanced understanding necessary to move that debate beyond the slogans.

Despite providing society with a set of crucial services, large groups of workers in the informal economy are subject to exclusion and discrimination, and their lives are characterised by various types of vulnerabilities and deprivations that result from the denial of social, economic, political and legal protection. Although not new to the development vocabulary, the informal economy has received renewed attention in recent years largely due to the ILO's 'decent work' agenda and various efforts to promote 'legal empowerment of the poor'. With an explicit focus on labour rights, the book focuses on a nuanced understanding of the regulatory and operational challenges and dilemmas related to implementing the two approaches in selected countries in sub-Saharan Africa. In addition to analyzing structures and relations of power between the formal and the informal economies, the book critically discusses the work of governments, civil society organizations and the poor themselves to address the daily challenges of living in the informal economy.

The Role of Trade in Ending Poverty looks at the complex relationships between economic growth, poverty reduction and trade, and examines the challenges that poor people face in benefiting from trade opportunities. Written jointly by the World Bank Group and the WTO, the publication examines how trade could make a greater contribution to ending poverty by increasing efforts to lower trade costs, improve the enabling environment, implement trade policy in conjunction with other areas of policy, better manage risks faced by the poor, and improve data used for policy-making.

This survey assembles recent theoretical and empirical advances in the literature on economic informality and analyzes the causes and costs of informality in developed and developing economies. Using recent evidence, the survey discusses the nature and roots of informal economic activity across countries, distinguishing between informality as the result of exclusion and exit. The survey provides an extensive review of recent international experience with policies aimed at reducing informality, in particular, policies that facilitate the formalization process, create a framework for the transition from informality to formality, lend support to newly created firms, reduce or eliminate inconsistencies across regulation and government agencies, increase information flows, and increase enforcement.

The multiple indicator-multiple cause (MIMIC) method is a well-established tool for measuring informal economic activity. However, it has been criticized because GDP is used both as a cause and indicator variable. To address this issue, this paper applies for the first time the light intensity approach (instead of GDP). It also uses the Predictive Mean Matching (PMM) method to estimate the size of the informal economy for Sub-Saharan African countries over 24 years. Results suggest that informal economy in Sub-Saharan Africa remains among the largest in the world, although this share has been very gradually declining. It also finds significant heterogeneity, with informality ranging from a low of 20 to 25 percent in Mauritius, South Africa and Namibia to a high of 50 to 65 percent in Benin, Tanzania and Nigeria.

The global financial crisis of recent years and the associated large fiscal deficits and debt levels that have impacted many countries underscores the importance of reliable and timely government statistics and, more broadly, public sector debt as a critical element in countries fiscal and external sustainability. Public Sector Debt Statistics is the first international guide of its kind, and its primary objectives are to improve the quality and timeliness of key debt statistics and promote a convergence of recording practices to foster international comparability and as a reference for national compilers and users for compiling and disseminating these data. Like other statistical guides published by the IMF, this one was prepared in consultation with countries and international agencies, including the nine organizations of the Inter-Agency Task Force on Finance Statistics (TFFS). The guide's preparation was based on the broad range of experience of our institutions and benefitted from consultation with national compilers of government finance and public sector debt statistics. The guide's concepts are harmonized with those of the System of National Accounts (2008) and the Balance of Payments and International Investment Position Manual, Sixth Edition.

The Urban Informal Sector is a collection of papers presented at a multi-disciplinary conference on ""The urban informal sector in the Third World,"" organized by the Developing Areas Study Group of the Institute of British Geographers in London on March 19, 1977. Contributors offer critical perspectives on the urban informal sector, with emphasis on employment and housing policies. Topics covered range from general reviews and national case studies to detailed studies of particular occupations in individual cities. This book is comprised of 12 chapters and begins by reviewing the relevance of dualist models of economic activities and enterprises, as applied to Third World countries, concentrating on the origins, diffusion, and deficiencies of the formal/informal dualist classification. Subsequent chapters explore the informal sector debate in studies of Third World poverty and employment; the nature of informal-formal sector relationships; the structure of the labor markets in the ""organized"" and ""unorganized"" sectors of urban economies in South India; and the problem of urban poverty, its relation to employment, and rising spatial inequalities in Brazil. Capitalist and petty commodity production in Nigeria is also discussed, along with John Turner's views on housing policy. The final chapter looks at the competition between the informal and formal sectors in the retail industry in Santiago, Chile. This monograph will be of interest to social and economic policymakers.

The outlook for the global economy has darkened. Global financing conditions have tightened, industrial production has moderated, trade tensions have intensified, and some large emerging market and developing economies have experienced significant financial market stress. Faced with these headwinds, the recovery in emerging market and developing economies has lost momentum. Downside risks have become more acute and include the possibility of disorderly financial market movements and an escalation of trade disputes. Debt vulnerabilities in emerging market and developing economies, particularly low-income countries, have increased. More frequent severe weather events would raise the possibility of large swings in international food prices, which could deepen poverty. In this difficult environment, it is of paramount importance for emerging market and developing economies to rebuild policy buffers while laying a stronger foundation for future growth by boosting human capital, promoting trade integration, and addressing the challenges associated with informality,