Subject area
Any sovereign state is to some extent concerned about the existence of informality in its economy. Although the subject of informal economy is broadly presented in interdisciplinary research, it remains understudied, especially from an entrepreneurship perspective in developing context (Castro, Khavul, & Bruton, 2014). The problem is particularly up-to-date in the light of millennium development goals, first of which is eradication of extreme poverty and hunger. Poverty alleviation programs mostly rely on the increasing involvement of ‘bottom quintile’ private sector in economic activity through development programs. The effect of informality on firm productivity and growth is much debated(Castro et al., 2014). On the one hand, informal economy is one of the main factors undermining the effectiveness of reforms in private sector development, because microfinance programs and other benefits, received from formality are underutilized. On the other side, given the fact that financial systems in developing counties are not consistent with the needs of the poor, the existence of informal sector is a response to the shortcomings of the formal sector (Bakhtiari, 2006). To which extent inefficiency, created by the presence of informal sector affects the well-being of developing society? What positive effects informality brings and why informality is a persistent phenomenon in developing countries?
Literature review
When talking about poverty reduction, a growing body of literature highlights the necessity of taking into account informal economy (Hillenkamp, Lapeyre& Lemaître, 2013). Informal economy is extremely multi-faceted subject, with complex social, legal and institutional determinants. Some authors see informality and...
... middle of paper ...
...ata panels related to the subject are available and updated on a regular basis (World Bank dataset, national statistical reports/ various world ranking indexes etc.). Previous studies have shown that level of informality is a procyclical flow variable, which adapts to the current economic conditions. So the informal economy can be modelled as a dynamic system. At this stage certain characteristics (state, control variables) should be obtained through the procedure described above (establishing causal relationship) that can allow to model it with a greater level of precision. The goal of dynamic programming here is in tracking the change of the size of informal economy during business cycles and studying its impact on socioeconomic environment. The results of research could be used for the suggestion of policy for mitigating the negative effects of informal economy.
Although poverty has minimized, it is still significant poverty which is characterized by a numerous amount of things. There are two types of poverty case and insular. “Case poverty is the farm family with the junk-filled yard and the dirty children playing in the bare dirt” (Galbraith 236)Case poverty is not irretraceable and usually caused if someone in the household experiences “ mental deficiency, bad health, inability to adapt to the discipline of industrial life, uncontrollable procreation, alcohol, some educational handicap unrelated to community shortcomings” (Galbraith 236).Case poverty is often blamed on the people for their shortcomings but on some levels can be to pinpoint one person's shortcomings that caused this poverty. Most modern poverty is insular and is caused by things people in this community cannot control. “The most important characteristic of insular poverty is forces, common to all members of the community, that restrain or prevent participation in economic life and increase rates of return.
Lora Jo Foo. “The Yale Law Journal”, Vol. 103, No. 8, Symposium: The Informal Economy
The Benefits of Sweatshop Sweatshops, when left to operate without government intervention, are the most efficient way out of poverty especially in developing countries. This argument may feel far fetched, but when examined in the context of those working at sweatshops and the locations sweatshops are most often constructed in, the reason why this is true is apparent. The benefits of sweatshops can be found by examining how they increase living conditions, examining the locations where sweatshops are constructed, and looking at how government regulations on factories don’t help anyone. Sweatshops increase the standards of living for the workers and their communities.
Monetary and fiscal policy and their applications to the third world countries with a huge informal sector
Smith, R., & McElwee, G. (2015). Developing qualitative research streams relating to illegal rural enterprise. International Journal of Entrepreneurial Behaviour & Research, 21(3), 364-388. Retrieved from http://ncat.idm.oclc.org/login?url=https://search-proquest-com.ncat.idm.oclc.
We have positioned advantages and disadvantages of being formal/informal to better understand the challenges in both circumstances. However, it is necessary to closely analyse the precedence of successful formalization as well as successful informal institutions in order to challenge modern economic paradigms in development economics.
The information age is most certainly the age of technology we are currently at in society—facts and knowledge are readily available at all times, whether that would be on our computers, smartphones, or even our automobiles. It is defined by the fact that knowledge is constantly available at our fingertips. There are four main elements of the information age:
Simply put the informal economy refers to those economic activities that are neither taxed nor monitored by a government and are therefore not included in that government's Gross National Product (GNP) However in literature this phenomenon is discussed using different concepts such as informal, unofficial, irregular, parallel second underground, underground, grey markets, subterranean, hidden, invisible, unrecorded, shadow, ghosting and moonlighting. Illegal or criminal activities such as drug dealing or prostitution have been excluded from this definition, as have exchanges of unpaid work. My paper is therefore prepared with this omission in mind.
“…increasing international trade and financial flows since the Second World War have fostered sustained economic growth over the long term in the world’s high-income states. Some with idle incomes have prospered as well, but low-income economies generally have not made significant gains. The growing world economy has not produced balanced, healthy economic growth in the poorer states. Instead, the cycle of underdevelopment more aptly describes their plight. In the context of weak economies, the negative effects of international trade and foreign investments have been devastating. Issues of trade and currency values preoccupy the economic policies of states with low-income economies even more than those with high incomes because the downturns are far more debilitating.1”
Social issues are problems in the society today that are described as wrong, widespread and changeable. A category of conditions that people believe need to be changed. Poverty is a serious social issue in the society today. According to Peilin (2012), poverty brings hardships to families and individuals as well as political thereby negatively affecting the social stability and social development and posing a severe threat to human security (p. 243). This paper focuses on poverty as a social issue in today’s society. First, it gives a succinct introduction of the social issue, and then describes how it fits into the field of sociology. It also evaluates the sociological theories and terminology that relate to the social issue. The section that follows evaluates what is known and unknown about the particular social issue. This is followed by a discussion regarding the value of sociological research into the issue determining the available or possible practical implications of the sociological inquiry. The information presented here is strongly supported by the concepts and theories derived from reliable sources.
Today is an era of information explosion. In the past few years, many newly invented technological devices and software are now tightly integrated with our everyday lives. Today, people can look up almost any kind of information, make friends, communicate with others, and express ourselves with the simple touch of a button on a device we usually keep within arm’s reach. “Widespread use of technology is changing the way we work, learn, and communicate – even the way we carry out our regular, daily activities.”(Seifer and Mihalynuk) These devices not only benefit our livelihoods and increase our happiness, but they are also integral in advancing education, technology, development, and, in general, human evolution. The children of today, who have been raised in this era of information explosion, will undoubtedly reap such benefits and, in turn, advance society towards a better generation.
The importance of self-employment has been well-researched. It is contended that when the formal sector does not create sufficient employment owing to low growth rate or structural issues, the excess labour is absorbed by the informal sector of the economy which primarily comprises of self-employed . Some researchers argue that self-employment is
He cites dirty work and job creation as one of the economic functions that poverty serves (Gans 278-279). Dirty work refers to menial jobs that are important in society, but can only be performed by people with no other life options. Some professions, such as policemen and charity organisations, benefit from the existence of the poor. The author notes that, as much as these institutions claim to be in existence for the goodness of all, they would have no purpose if the poor did not
All businesses have access to a wide range of information. This information may be management skills, planning or understanding consumers’ needs. The way a business makes use of this knowledge is a strong determinant in the growth of the organization. Information in business does not only affect big organizations but also small scale enterprises. The aim of this paper is to highlight the primary sources of information that relate to entrepreneurs, workers and experts as well as identify new opportunities for small businesses. It also focuses on best practices to harness and develop any given information.
In addition, Andrei T. P. et al (2002) has agreed with their research that objective is to examine out the relationships between three key economic variables from an economy which is inflation rate, unemployment rate and the size of the informal economy during year (1998-2009). As a result the estimation of the Philips curve model parameters stressed the negative linear dependence between unemployment and inflation rate. Equally, for the period 1998-2009, is determined a value of the Some Comments Concerning Informal Economy, Unemployment and Inflation natural unemployment rate. By introducing a variable which measures the size of the informal economy into the classical model of Philips's curve allows the identification of a linear dependence between the unemployment rate and the size of the informal economy.