Comparative capitalism and emerging economies: formal-informal economy interlockages and implications for institutional analysis

Research in comparative capitalism has seen an increasing interest in emerging economies and has made attempts at integrating the informal economy as a distinct and significant feature of the institutional configuration and reproduction of contemporary capitalisms. The way this has been achieved, however, is problematic as it has mainly worked with a dualist notion of the formal and informal economies, thereby making it difficult to conceptualise any interlinkages. This article argues that the relation between the formal and informal economies needs to be conceptualised as an interlocking one in order to analyse the constitutive place the informal economy has in the dynamics of formal institutions as well as the overall institutional configuration of emerging capitalisms. A focus on interlockages helps in conceptualising diversity, by bringing the heterogeneity of social relations within the formal and informal economies to the fore. This focus also allows for a more nuanced understanding of the distribution of resources across institutions and actors, and how change is shaped by struggles within specific interlocking configurations. India serves as a useful example in this respect insofar as the centrality of the informal economy to Indian capitalism can be shown to be due to the specific interlockages as opposed to the, probably more eye catching, size of its informal economy.