Narrow Results

This paper highlights the presence of a hidden enterprise culture in the Indian informal economy (versus a necessity driven view) and draws a developmental framework to harness micro-enterprise owners. Policy research has typically taken a welfare approach toward studying the informal sector in the developing countries. Therefore, the agenda has been to create a favorable environment for survival instead of cultivating entrepreneurship and facilitating their growth. Conversely, this paper explores a strategic orientation for the informal sector. The proposed framework balances entrepreneurial spirit of the individuals, market dynamics of the economy, and socio-economic imperatives of a developing nation. Implications for research and policy are also drawn.

Until now, few studies have evaluated whether there are geographical variations in the extent and character of off-the-books entrepreneurship. The aim of this paper is to evaluate whether and how the prevalence and nature of off-the-books entrepreneurship varies across deprived and affluent neighborhoods in an advanced economy. To do this, face-to-face interviews were conducted with 511 households in English affluent and deprived urban neighborhoods, and are reported here. The finding in both communities surveyed is that wholly legitimate enterprises represent just the tip of the iceberg. Beneath the surface in all areas is a large hidden enterprise culture composed of both registered businesses trading off-the-books as well as unregistered wholly off-the-books enterprises. However, the preponderance of both early-stage entrepreneurs as well as the established self-employed to trade off-the-books is greater in deprived than affluent urban communities, as is the tendency for entrepreneurs to operate business on a wholly off-the-books basis, intimating that deprived urban communities are perhaps relatively more enterprising and entrepreneurial than is currently recognized. The paper thus concludes by contending that across all localities, but especially in deprived urban neighborhoods, legitimizing the hidden enterprise culture could be an important but so far untapped means of promoting enterprise and economic development.

In recent decades, the field of entrepreneurship studies has become increasingly interested in the relationship between entrepreneurship and the informal economy. This paper reviews this burgeoning sub-field of entrepreneurship studies that recognizes how entrepreneurs do not always conduct their business affairs wholly by the rulebook. Evaluating this rapidly growing body of literature, it reviews the findings regarding the preponderance of entrepreneurs to engage in the informal economy, the nature of such informal entrepreneurship, the characteristics of informal entrepreneurs and the motives underpinning participation in such endeavor, along with the competing theories that have sought to explain engagement in this type of entrepreneurship. The tentative finding is that there are marked socio-spatial variations in the prevalence and nature of informal entrepreneurship, the characteristics of informal entrepreneurs and their rationales. The implication is not only that different theorizations of informal entrepreneurship apply more in some populations than others, but also that some populations usually seen as lacking in entrepreneurial spirit are perhaps more enterprising and entrepreneurial than currently recognized. Consequently, legitimizing this hidden enterprise culture could be an important means of promoting enterprise and economic development in such populations. The paper concludes by highlighting future avenues for research on this subject.

Despite a widespread recognition in the mainstream entrepreneurship literature that many legitimate entrepreneurs do not pursue purely profit-driven commercial goals, the small but burgeoning literature on entrepreneurship in the informal economy has assumed entrepreneurs operating wholly or partially on an off-the-books basis are commercial rather than social entrepreneurs. To evaluate critically this assumption, evidence is reported from a survey involving face-to-face interviews with 70 informal entrepreneurs located in deprived and affluent urban and rural English localities. The finding is that informal entrepreneurs range from those pursuing purely commercial ends through to purely social entrepreneurs pursuing solely social logics, with the majority situated somewhere in-between combining both commercial and social objectives. The outcome is a call to recognize that not all informal entrepreneurs are purely commercial entrepreneurs and that the commercial versus social entrepreneurship dichotomy will need to be transcended if the multifarious goals underpinning informal entrepreneurship are to be better understood.

The aim of this paper is to evaluate critically the gender variations in informal sector entrepreneurship. Until now, a widely-held belief has been that entrepreneurs operating in the informal sector in developing nations are lowly paid, poorly educated, marginalized populations doing so out of necessity as a survival strategy in the absence of alternatives. Reporting an extensive 2003 survey conducted in urban Brazil of informal sector entrepreneurs operating micro-enterprises with five or less employees, the finding is that although less than half of these entrepreneurs are driven out of necessity into entrepreneurial endeavor in the informal economy, women are more commonly necessity-driven entrepreneurs and receive lower incomes from their entrepreneurial endeavor than men despite being better educated. The outcome is a call to recognize how the gender disparities in the wider labor market are mirrored and reinforced by the participation of men and women in the realm of informal sector entrepreneurship.

When seeking to harness entrepreneurship and enterprise culture, governments often seek to transfer policy measures successful in another country to their own. Until now however, governments have often lacked a practical evaluation framework for selecting policy measures and then appraising the feasibility and transferability of such measures. The aim of this paper is to fill that gap. Reviewing the literature on cross-national policy transfer, this paper provides a pragmatic evaluation framework for selecting policy measures and appraising their feasibility and transferability from one country to another. This details how successful policy transfer and cross-national policy learning must be informed by prospective policy analysis and testing the features of the specific policy initiative against the specifics of the national context and circumstances, and then establishes the criteria and processes through which potential policy adopters can identify promising policies used elsewhere to tackle similar problems in their own country and assess their 'goodness of fit' prior to transfer to national realities.

Informal entrepreneurs have been viewed variously as reluctant participants in such endeavors doing so out of economic necessity because of their exclusion from formal work and welfare (structuralist theory), or as willing entrepreneurs who voluntarily exit the formal economy either as a rational economic decision (neo-liberal theory) or as social actors who do not agree with the formal rules and regulations of the state (neo-institutional theory). The aim of this paper is to evaluate these competing theorizations of entrepreneurs’ motives for participating in the informal sector. Reporting evidence from a 2019 Eurobarometer survey involving 27,565 face-to-face interviews in 28 European countries, the finding is that five percent are reluctant participants, twenty percent are willing participants doing so as a rational economic decision, 21 percent are willing participants doing so because of their disagreement with the rules and 54 percent do so for a mixture of these motives. A logistic regression analysis reveals who is more likely to engage in informal entrepreneurship and who is significantly more likely to do so for each motive. The theoretical and policy implications are then discussed.

This paper reviews the policy options and measures available for tackling informal sector entrepreneurship. Four possible policy options are critically reviewed: doing nothing, eradicating informal entrepreneurship; eradicating formal entrepreneurship and formalizing informal entrepreneurship. Concluding that the latter is the most feasible option, policy measures for formalizing informal entrepreneurship are then reviewed. On the one hand, the range of policy measures that can be used by enforcement authorities (tax authorities, labor inspectorates and social security institutions) responsible for tackling informal entrepreneurship are evaluated. On the other hand, and to tackle the broader structural determinants of informal entrepreneurship, macro-level reforms are identified by evaluating critically the validity of the purported determinants proposed in the modernization, political economy, neo-liberal and neo-institutionalist theories. The outcome is an understanding of the full range of policy initiatives required by governments seeking to formalize informal sector entrepreneurship.