Gateway for Researchers & Policymakers

Resources for researchers and policymakers interested in the nexus of law and informal employment.

Law and the Informal Economy: An Area of Expanding Policy Innovation

The relationship between law and the informal economy is an area of growing academic interest. The informal economy accounts for the majority of employment in developing regions (see Statistical Picture).

Scholars from disciplines including law, sociology, economics, and urban planning have recognized the need for increased documentation and analysis of regulatory frameworks for informal occupations. Workers in professions such as street vending, home-based work, domestic work, and waste picking are often among the most vulnerable workers. They are also frequently excluded from regular employment, labour, and social security laws.

Existing laws may be unevenly enforced, conflicting, overlapping, or even contradictory. They may be in languages or formats that are not accessible to many informal workers.

Even when an effective regulatory framework is on the books, significant power imbalances between informal workers and other stakeholders can make it difficult for informal workers to protect and enforce their rights. At the same time, the informal economy provides exciting opportunities for innovative policymaking.

WIEGO aims to offer researchers and policymakers the resources to develop further data on effective policymaking in the informal economy, and to highlight examples of regulatory frameworks from around the world that successfully regulate and enable a thriving informal economy.

Resources for Researchers and Policymakers

Despite the size of the informal economy in many countries, the regulatory frameworks (or lack thereof) that govern it are relatively understudied. It may be the laws are difficult to access and categorize. Many informal activities, particularly waste picking and street vending, are governed largely at the local levels.

In order to improve access to information, WIEGO has created a Law Observatory, where visitors can access laws, court cases, policies, and other legal documents on law and the informal economy in specific sectors and countries, and policymakers can learn from, identify, and share best practices in informal economy regulation.

Through projects in Colombia, Ghana, India, Peru, and Thailand, project partners have developed a series of Country Studies that provide in-depth, country-specific analyses of issues in informal economy regulation.

WIEGO Working Papers provide further empirical and theoretical information on the informal economy, with an emphasis on the information that will help to inform more effective policy development.

In 2013, WIEGO launched a Legal Briefs series. Academics and practicioners describe the legal environment facing informal workers, and analyze legal strategies and precedent-setting cases that may lead to more secure livelihood. The first three briefs analyze the legal and policy tools developed through informal worker advocacy in India, the right to information challenges facing informal workers worldwide, and the experience of street vendors who successfully organized to combat evictions in São Paulo, Brazil.

Finally, researchers may be interested in this bibliography of selected academic research on law and the informal economy.

Developing the Literature on Law and the Informal Economy: Documentation, Analysis, Recommendations

In WIEGO's work with informal workers' groups, scholars, and lawyers, it remains clear that there is a continuing need for further research into the relationship between law, the informal economy, and the ingredients necessary to develop an enabling regulatory framework that protects informal workers and promotes the development of a robust economic environment that supports a grassroots entrepeneurial spirit. Informal workers, legal practicioners, and advocates have identified three particular areas that would benefit from further study:

(1) continued documentation of existing laws, enforcement practices, and features of the informal economy;

2) analysis of patterns and trends in informal economy regulation, what works and what doesn't, underlying sociopolitical and legal challenges, and advocacy and case studies; and

(3) identification of good practices in lawmaking (i.e., what creates an enabling regulatory framework) and in advocacy (i.e., what strategies workers' groups and their advocates can use to improve existing laws and enforcement practices).