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Aspects of the Informal Economy in a Transforming Country: The Case of Romania

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  • Rainer Neef

Abstract

The informal economy has played a large part in state socialist countries and has been growing since 1989 in eastern European countries. Based on qualitative interviews and a large–scale survey carried out in Romania in 1996 and 1998, this article identifies four forms of informal household economies. In the context of a long drawn–out transformational recession in Romania, market conditions are rather unfavourable for most branches of the informal economy, which two–thirds of all Romanian households participate in. Success or failure depend largely on household potential and personal skills. A large group of households, which depend primarily on subsistence farming or on occasional manual labour, is trapped in a survival economy. Households that combine formal and informal jobs mostly manage to escape poverty, and the better off can raise their standards of living through informal activities, especially those who are independent and provide qualified services or those who carry out informal activities related to their formal employment in firms. A small group of informal entrepreneurs struggles between the two extremes of successful accumulation and a situation of dependency. Economically, subsistence farming exacerbates the crisis in agriculture, whereas in other branches of the informal economy there are more positive than negative impacts on overall economic development. L’économie parallèle a joué un rôle important dans les pays socialistes, s’intensifiant depuis 1989 dans les pays d’Europe de l’Est. En s’appuyant sur des entretiens approfondis et une vaste étude réalisée en Roumanie en 1996 et 1998, cet article définit quatre formes parallèles d’économie pour les ménages. Dans le cadre de la récession prolongée associée à la mutation roumaine, les conditions de marché sont plutôt défavorables à la plupart des branches de l’économie parallèle, laquelle concerne deux tiers des ménages roumains. La réussite ou l’échec est en grande partie liée au potentiel familial et aux compétences individuelles. Un groupe considérable de ménages, qui dépend essentiellement d’une agriculture de subsistance ou d’un travail manuel occasionnel, est prisonnier d’une économie de survie. Les ménages qui combinent des emplois officiels et officieux réussissent généralement àéchapper à la pauvreté, et les ‘plus favorisés’ peuvent élever leur niveau de vie grâce à des activités parallèles, notamment ceux qui sont indépendants et fournisseurs de prestations qualifiées ou ceux qui se livrent à des activités officieuses en relation avec leur emploi officiel en entreprise. Un petit groupe de créateurs d’entreprises parallèles luttent entre les deux extrÁmes: cumul réussi et situation de dépendance. Èconomiquement, l’autosubsistance accentue la crise du secteur agricole tandis que, dans d’autres branches de l’économie parallèle, on constate davantage d’effets positifs que négatifs sur l’expansion économique globale.

Suggested Citation

  • Rainer Neef, 2002. "Aspects of the Informal Economy in a Transforming Country: The Case of Romania," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 26(2), pages 299-322, June.
  • Handle: RePEc:bla:ijurrs:v:26:y:2002:i:2:p:299-322
    DOI: 10.1111/1468-2427.00381
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