On the informal economy: the political history of an ethnographic concept

I explore here the dialectic of formal and informal economy in the context of ‘development’ discourse over the last four decades. It would not be hard, in post-colonial Africa for example, to conceive of this dialectic as a war waged by the bureaucracy on the people, allowing informal economic practices to be portrayed as a kind of democratic resistance. Yet, however much we might endorse the political value of self-organized economic activities, there are tasks of large-scale co-ordination for which bureaucracy is well-suited; and the institution’s origins were closely linked to aspirations for political equality, even if historical experience has undermined that expectation. So the task is not only to find practical ways of harnessing the complementary potential of bureaucracy and informality, but also to advance thinking about their dialectical movement. Informality may be conceived logically in terms of four categories: division, content, negation and residue. Neoliberal globalization has vastly expanded the scope of informal activities; so that we also need to examine what social forms positively organize them and how these relate to governments, corporations and international agencies. The current crisis of world economy has already begun a major swing of the pendulum back from the market to the state (wherever that may be these days). The political potential of our moment in history is well illuminated by a review of how the major development agencies have variously construed the dialectic of bureaucracy and informal economy through the state/market pair since the concept’s origins around 1970.