Interest Group Structure and Organization in Kenya's Informal Sector

Abstract

Much of the academic and policy discourse on the African informal sector assumes that the people who populate the informal economy have a distinct set of economic and political interests. The sector's participants are supposed to support policies different from those advocated by governments that seek to tax informal enterprises, by smallholders who seek higher prices for the crops they grow and thereby contribute to rising food prices, and by modern sector manufacturing that sells inputs used by informal enterprises for high prices and buys goods and services at low prices. This research suggests that patterns of interest group formation vary according to the extent to which entrepreneurs diversify their income portfolios and according to the perception of mobility within and between sectors. It uses this understanding to explain differences in patterns of interest formation between entrepreneurs in capital cities and in secondary towns. It offers data from a survey administered in three Kenyan secondary towns.