Dr Kathleen Meagher CON.711

This course is available on the MSc in African Development, MSc in Development Management, MSc in Development Studies, MSc in International Development and Humanitarian Emergencies, MSc in Urban Policy (LSE and Sciences Po) and MSc in Urbanisation and Development. This course is available with permission as an outside option to students on other programmes where regulations permit.

Contrary to standard development thinking, the informal economy has expanded rather than contracted in the face of liberalisation and globalisation, and now creates more jobs than the formal economy in most developing countries. Accounting for more than 50% of non-agricultural employment across much of the developing world, the informal economy is attracting growing policy attention. Practitioners, policy makers and academics seek a clearer understanding of its impact on poverty, employment, social exclusion, and governance. In a globalising environment, are large informal economies a poverty trap or an engine of growth? Do they stimulate entrepreneurship and popular empowerment, or promote criminality and exploitation? How does a greater understanding of the size and organization of informal economies affect policy on urban service provision, social policy or taxation? What are the implications of the informal economy for social cohesion and popular politics in developing countries?

This course will explore how high levels of informality in developing countries is shaping processes of growth and governance in the global south. The effect of informality on new policy narratives of inclusive growth will be a central theme in the course. Using a comparative institutional approach, we will examine informal economies in a range of regional contexts, including Africa, the Middle East, South and East Asia, and Latin America, highlighting variations in activities, relations with the state, global integration and development outcomes. Key issues covered in the course include the impact of the informal economy on labour markets, weak states, gender empowerment, urban services, social enterprise, social policy, taxation, and popular politics. Attention will be focused on the potential as well as risks of large informal economies in the face of contemporary development challenges, drawing on empirical evidence and comparative case studies from across the developing world.

15 hours of lectures and 15 hours of seminars in the LT. 1 hour and 30 minutes of lectures in the ST.

There will be a ninety minute revision session in late LT or early ST.

Formative coursework will involve a 2,000 word essay during the term and at least one presentation.

1. Portes, Alejandro, Manuel Castells and Lauren A. Benton, eds. (1989) The Informal Economy: Studies in Advanced and Less Developed Countries. Baltimore: John Hopkins University Press.

2. Perry et al. (2007) Informality: Exit and Exclusion, World Bank (available on Google Books).

3. ILO (2013) The Informal Economy and Decent Work: A Policy Resource Guide, Geneva.

4. Guha-Khasnobis, Basudeb, Ravi Kanbur and Elinor Ostrom. 2006. Linking the Formal and Informal Economy: Concepts and Policies. London: Oxford University Press.

5. Meagher, K. (2010) Identity Economics: Social Networks and the Informal Economy in Nigeria, Oxford: James Currey.

6. Fernandez-Kelly, P. and J. Shefner, eds. (2006) Out of the Shadows: Political Action and the Informal Economy in Latin America. Philadelphia: Penn State University Press.

7. Cooper, Neil and Michael Pugh, with Jonathan Goodhand (2004) War Economies in a Regional Context: The Challenges of Transformation. Boulder: Lynne Rienner.

8. Kabeer, Naila (2008) Mainstreaming Gender in Social Protection for the Informal Economy. London: Commonwealth Secretariat.

9. Levy, Santiago (2008) Good Intentions, Bad Outcomes: Social Policy, Informality and Economic Growth in Mexico. Brookings Institution.

10. Lindell, I. (2010) Africa’s Informal Workers: Collective Agency, Alliances and Transnational Organizing in Urban Africa. London: Zed Books.

Exam (70%, duration: 2 hours) in the main exam period.
Essay (30%, 3000 words) in the ST.

This is a new course for students who wish to understand how developing economies really operate by deciphering the ways in which burgeoning informal economies unleash unanticipated effects on development processes. It is a challenging course that opens up new perspectives on processes operating under the radar of conventional development thinking, and has been rewarding for students of all ability levels. It is a multi-disciplinary course with no particular requirements in terms of quantitative skills, though students with a background in economics will also find the course illuminating.