Reforming formal institutions to encourage formalisation

To align the norms, values and beliefs of businesses, employers, workers and citizens with the laws and regulations of the formal institutions, policy can seek changes in the formal institutions. Three types of change are reviewed in this chapter. First, to resolve the lack of joined-up governance, four forms of coordination and institution building are highlighted, namely coordination at the level of strategy, operations, data collection, sharing and analysis, and between state authorities and social partners. Second, the changes required in the internal processes of the formal institutions regarding perceptions of procedural and redistributive justice and fairness are outlined. And third and finally, the structural inclusive transformation required at the macro-level in terms of wider economic and social developments is outlined.