ENTREPRENEURSHIP & EXPLOITATION: MEASURING INDEPENDENCE AND DEPENDENCE IN THE INFORMAL ECONOMY

Abstract

One of the most important debates within the literature on the Urban Informal Economy (UIE) focuses on whether self‐employed individuals operating informally are “entrepreneurs” who should be aided by development planners or “disguised workers” who are super‐exploited by firms within the formal economy. While some authors have argued that the (UIE) may include both, there is little agreement on how to distinguish “entrepreneurs” from “disguised workers” so that the policies designed to promote the former while discouraging the latter can be developed. This article proposes a set of “scales of independence” to measure the relative dependence of self‐employed informal workers on specific suppliers and clients, and proposes several different categories of dependence/independence that should improve our understanding of the economic activity within the UIE.