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Tackling Entrepreneurship In The Informal Sector: An Overview Of The Policy Options, Approaches And Measures

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  • COLIN C. WILLIAMS

    (Sheffield University Management School (SUMS), University of Sheffield, Conduit Road, Sheffield S10 1FL, United Kingdom)

Abstract

The aim of this paper is to review the various policy options, approaches and measures that can be used to address informal entrepreneurship. To do this, it first reviews four possible policy options, namely taking no action, eradicating informal entrepreneurship, moving formal entrepreneurship into the informal economy, or transforming informal entrepreneurship into formal entrepreneurship. Revealing that transforming informal entrepreneurship into formal entrepreneurship is not only the most viable option but also the approach most commonly adopted by supra-national agencies and national governments, a review is then undertaken of how this can be achieved using either direct controls, which seek to increase the costs of informal entrepreneurship and/or the benefits of formal entrepreneurship, or indirect controls that seek to generate a commitment to compliance and greater self-regulation. It is then revealed how these approaches and their accompanying policy measures are not mutually exclusive and can be combined in various ways, exemplified by the responsive regulation and slippery slope approaches. The outcome is a comprehensive review and evaluation of the various policy options, approaches and measures available to policy makers for addressing informal entrepreneurship along with some recommendations regarding the way forward.

Suggested Citation

  • Colin C. Williams, 2015. "Tackling Entrepreneurship In The Informal Sector: An Overview Of The Policy Options, Approaches And Measures," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 20(01), pages 1-21.
    • Handle: RePEc:wsi:jdexxx:v:20:y:2015:i:01:n:s1084946715500065
    DOI: 10.1142/S1084946715500065
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    References listed on IDEAS

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    1. Colin C. Williams, 2014. "Confronting the Shadow Economy," Books, Edward Elgar Publishing, number 15370.
    2. Torgler, Benno & Schneider, Friedrich, 2007. "Shadow Economy, Tax Morale, Governance and Institutional Quality: A Panel Analysis," Berkeley Olin Program in Law & Economics, Working Paper Series qt26s710z8, Berkeley Olin Program in Law & Economics.
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    Cited by:

    1. Colin C. Williams, 2023. "A Modern Guide to the Informal Economy," Books, Edward Elgar Publishing, number 18668.
    2. Usman Ladan & Colin C. Williams, 2019. "Evaluating Theorizations Of Informal Sector Entrepreneurship: Some Lessons From Zamfara, Nigeria," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 24(04), pages 1-18, December.
    3. Esther Salvi & Frank-Martin Belz & Sophie Bacq, 2023. "Informal Entrepreneurship: An Integrative Review and Future Research Agenda," Entrepreneurship Theory and Practice, , vol. 47(2), pages 265-303, March.
    4. Santiago Roca & Luis Simabuko, 2023. "Informality and Tax Refund in Peru’s Intercity Passenger Ground Transport Market: An Empirical Appraisal," Transportation, Springer, vol. 50(3), pages 1103-1123, June.
    5. Amanda J. Muhammad & Alina M. Waite & Dwuena C. Wyre, 2019. "Informal Sector Retail Start-Ups In A Caribbean Context," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 24(02), pages 1-15, June.
    6. Colin C. Williams & Abbi M. Kedir, 2016. "The Impacts Of Corruption On Firm Performance: Some Lessons From 40 African Countries," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 21(04), pages 1-18, December.
    7. Colin C. Williams & Abbi M. Kedir, 2017. "Evaluating The Impacts Of Starting Up Unregistered On Firm Performance In Africa," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 22(03), pages 1-20, September.
    8. Colin C. Williams & Brunilda Kosta, 2019. "Evaluating Institutional Theories Of Informal Sector Entrepreneurship: Some Lessons From Albania," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 24(02), pages 1-17, June.
    9. Martijn A. Boermans & Daan Willebrands, 2018. "Financial Constraints Matter: Empirical Evidence On Borrowing Behavior, Microfinance And Firm Productivity," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 23(02), pages 1-24, June.
    10. Eunice Maria M. N. Dos Santos & João J. Ferreira, 2017. "Analyzing Informal Entrepreneurship: A Bibliometric Survey," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 22(04), pages 1-20, December.
    11. Eijaz Ahmed Khan, 2018. "The Voice Of Informal Entrepreneurs: Resources And Capabilities Perspective," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 23(03), pages 1-19, September.

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