Development Of Informal Economy Research Articles

INSTITUTIONAL QUALITY, FINANCIAL INCLUSION AND SHADOW ECONOMY IN NIGERIA (1991-2020): AN ARDL APPROACH

 The study examined the dynamic link between institutional quality, financial inclusion and the informal economy in Nigeria. These were with the view to examining the institutional influence of financial inclusion on the development of informal economy. Annual data covering the period 1991 to 2020 were used for the study. The study made use of Autoregressive Distributed Lag (ARDL) as the technique of estimation. The study found a long run association between the variables and also reveal that financial inclusion and institutional quality directly has a negative but significant effect on shadow economy in Nigeria. This reveals that the development of financial sector as well as quality institutions aids formal sector participation as against the informal sector thus a decrease in shadow economy size in Nigeria. The effect of the interaction of financial inclusion and quality of institution on shadow economy is also found to be positive and significant meaning that weak institution quality has its toll effect on financial inclusion and which result to growth in informal economy in Nigeria. The study concludes that quality of institution in Nigeria is weak and must be improved to favorably promote financial inclusion and successfully mitigate the effect of shadow economy in Nigeria.           Therefore, reforms and policies that are required to improve transparency and accountability at all levels of governance as well as improvement in financial system are hereby recommended for policy makers.

Trade Openness and the Development of Informal Economy in Enugu State, Nigeria

This study examines the neoliberal thesis which contends that trade openness could support the economic recuperation and development of the peripheral states. Particularly, it reviews the current trade regimes in Nigeria with a view to understanding how they impacted the livelihood of informal economy operators in Enugu state. The study argues that the dismantling of Nigeria’s territorial borders through various trade policies of government negates the development of the informal economy in Enugu state by stifling the growth of small and medium enterprises (SMES) and leading to a general decline in the income and wellbeing of small scale business operators. It notes that trade openness is a ploy by the western capitalist states to perpetuate their dominance in the international political economy to the detriment of peripheral states, whose productive forces are still at a rudimentary stage. The theoretical foundation of the study was situated within the prismatic compass of Dependency theory while triangulation of data, involving review of official documents and other relevant literature as well as the use of questionnaire was deployed in this study. From the findings, the study recommends that Nigeria should reappraise its trade policies to stimulate the development of the informal sector and enhance the wellbeing of the indigenous entrepreneurs.

Informal Economy in Albania: Size and Consequences on Financial Deepening

The main purpose of this paper is to assess empirically the size of the informal economy in Albania over the last two decades, and its consequences on the financial deepening of the country. We will present a brief review of the informal economy development in Albania, and assess its size employing three empirical approaches: national accounts discrepancies, electrical energy consumption, and simple currency ratio approach. Previous studies on this topic and our findings suggest that the informal sector still accounts for a significant proportion of output and employment in Albania. Operating informally makes it difficult to households and enterprises to prove their creditworthiness since they cannot provide reliable documentation on their financial situation thus holding back financial deepening. Digitalization of information sources can enable better statistical reporting and provide possibilities for cross checking, better measurement of the formal economy and subsequently assessments of the informal sector.

Concentrated Urban Poverty: The Case of Izmir Inner Area, Turkey

ABSTRACT In Turkey, poverty has been a main subject of debates since 1960s. It used to be a serious problem for both rural areas and the big cities that gained migration. In Turkey and world-wide since the 1980s, however, there have been more research interests in the concentrated urban poverty, especially along with the increase in levels of impoverishment around the world. With the help of a case study in Izmir (Turkey), this paper aims to examine the process of concentrated urban poverty from different points of view in the literature. This is a case study developed at the peripheries of the traditional city centre—or inner areas—of the city of Izmir, Turkey. The paper, first, discusses the parameters of concentrated poverty according to the literature. Then it introduces the study findings of the author, which point out the macro-scale, micro-scale and ecological dynamics that are important in the development of concentrated urban poverty. The macro-scale dynamics suggest that poverty in inner areas of the city are related to the unbalanced development trends within the country, such as the overgrowth of metropolitan cities, economic restructuring processes, migration trends and the development of informal economy. The ecological dynamics address to the housing and job location preferences and invasion-succession processes in the city, which emphasize that socio-economic characteristics of inner areas of the city are different from those of other city parts. Micro-scale dynamics are related to poors' ability of developing solidarity relations among themselves, which is also related to the spatial characteristics of inner areas of the city, according to this study's findings.