Informal economy

The informal economy is defined compared to the official and modern economy which ensures today, in the economically developed countries, the essence of the production of the goods and the services. The expression “informal sector” (or “sector not structured”) comes from the International office of work.

The definition

Seven criteria were retained to characterize work in the Informal sector:

* accessibility to the activities;

* the use of local resources;

* the family property of the companies;

* the restricted scale of the operations;

* the use of simple techniques and the reduced number of workers;

* of the qualifications which are acquired apart from the official school system;

* of the markets escaping any payment and opened with competition.

Various informal economies

Family and domestic economy

The family economy was formerly the most important component of the economy and ensured the main part of the production activities. Its relative decline is with the development of the market economy, with the development of the social economy which should have been financed - Health insurance, retirements, Chômage, social services - and with the need for the modern economies to control the economic Flux S.

The principal work completed within the framework of the family economy is:

the transformation of the food purchases into consumer goods (meal);
lines of business, such: household and work of seam, the Gardening, Do-it-yourself and minor repairs;
lines of business with the person: keep children, keeps patients and elderly, transport of the people.

According to a study of INSEE (French organization), if it were necessary to develop with the Market price this family economy, she would represent at least a sum equal to the two-third of GDP. Moreover, supported by the high level of unemployment, and the spare time, this economy seems in full expansion.

So to his basic activities, one adds other more commercial activities or services such as the assistance with the family exploitation agricultural or artisanal (harvest of agricultural productions, small Comptabilité, reception and information of the customers, etc), the family economy would represent more of the three-quarter of the GDP.

Convivial economy

The convivial economy seems very close to the family economy, but it is turned towards the others. It is about a form of free gifts which deal with part of the social life and economic. It is thus made up essentially by activities of mutual aid, social Animation and leisures out of the family, and not giving place to any remuneration within the meaning of the formal economy.

This form of economy can take support on associative structures more or less organized (residents' association, religious, trade-union or political organizations). The principal work completed within the framework of the convivial economy is:

services rendered to neighbors or elderly or handicapped;
production of small objects and food sold at the time of festivals and knack with their organization;
the free participation in the organization and the course of cultural activities, pertaining to worship, trade-union or political.

The most recent phenomenon and most outstanding concerning this economy is the fact that it is more and more supported and encouraged by the Civil society and by the Mass-media (" the Resto du coeur " , " Sidaction ", " Operation Yellow pieces " , etc).

No study available, seems to be made on the richness generated by this economy, but it seems to be same level as that generated by the family economy, is two-third of GDP.

In certain cases, the convivial economy seems to be the most flexible solution, most effective and cheapest, to deal with certain public lines of business, such, for example:

networks of mutual aids to the people hospitalized, old or handicapped;
the development of the cultural activity(AP) of the districts;
the development of the cultural activities on Internet - as Wikipédia;
activities of Sponsorship or Public service ensured by the pensioners: associations of assistance to the small entrepreneurs or the unemployed, activities of various councils and support for the people in difficulty;
etc

Underground economy or clandestine

The underground economy or clandestine gathers three forms of very different activities:

underground economy generated by the Moonlighting;
economy generated by the economic frauds;
economy generated by the criminal activities;

but with at least three common points:

it escapes from the economic and social rules and the intervention from the State;
it does not give place to any Tax and social security deduction (tax or social);
it distorts the play of the free competition compared to the legal activities, either because of their own activity - moonlighting -, or because of integration of naps coming from criminal or criminal activities, seeking to reinvest itself - money laundering.

In certain cases the regulation makes it possible to fight effectively against some practical, even if their applications can run up against morals, for example:

the regulation of the casinos and the development of the offer of official plays at accessible prices - various lottos, lotteries and PMU - makes it possible to fight against the clandestine plays and bets;
the suppression of the prohibition laws, with the the United States had made move back the Distillerie S clandestine;
the tax amnesties encourage with the repatriation of funds invested abroad;
in France, abrogation in 1984 of the old legislation on the inscription from abroad to the Register of the trades, allowed the creation of many artisanal companies;
legalization and the catch of load by the public services of the practices of Avortement made it possible to integrate in the official economy this activity and to save many lives;
in France, the regulation of the activities of Prostitution by king Saint-Louis had made it possible to avoid the worst, whereas the law Marthe Richard of post-war period against the closed houses had like first consequence to push back this activity in the underground economy;
the legalization of the soft drugs and the free or quasi-free supply with the drug addicts of their Drug, would allow " casser" an important side of the market of the crime.

The existence of an important underground economy is before all the sign of a serious dysfunction of the formal economy or public services of the State. If the Moonlighting exists, it is that the official market of work knows rigidities which paralyze the development of the official employment or which prevents the access of them, that can as indicate as in certain fields, the real costs of work - wages more social contributions - became unbearable for the request. The dysfunction can be characterized by:

the heaviness of the tax pressure which pushes the companies to flee the tax by creating an abstract activity;
the slowness of the administrative rules which discourages any initiative of investment;
social legislation on the minimum wage, the family benefits, or the equitable charges.
the opening of the borders to the competition of the worldwide market.

It seems impossible to fight against the underground market with a guarantee of success by only repression - even in the old USSR where the economic fraud was punished capital punishment, the moonlighting and its thousand small easy ways were flourishing -, only larger a flexibility of the rules governing official employment allows an effective fight. In certain cases, only abstract work is able to ensure the services awaited by the market, for example:

clandestine workshops of the clothes industry in Paris;
street hawkers on the lines of public transport, selling objects of shoddy goods which the traditional trade do not manage any more to distribute.

Utility of the informal economy

Some believed to see in the informal economy a simple residue of the preindustrial economy - the family economy -, a lack of the Welfare state and company of the leisures - convivial economy -, the result of perversions of the modern economy - the Moonlighting. In fact, the informal economy, far from disappearing, seems to play the part of valve of safety of the standardized economies and a pledge of flexibility of our companies, within the framework of which, the performances increasingly higher than one waits there, are obtained there only at the price of a " suradaptation" , itself source of new rigidities.

See too

Internal bond

Informal sector in Senegal

External bond

Lomami Shomba - ''' the informal economy ''', Memory published with [[University of Kinshasa]] the

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