ISAS Working Papers

In developing economies, it is visible everywhere. It is amorphous, difficult to define, challenging to measure, generally beyond the grasp and, indeed, comprehension of the authorities. Yet the informal sector accounts for a significant share of the economy and directly impacts the lives of a majority of the population. Fifty per cent of the global workforce is estimated to be employed in the informal sector (OECD, 2009). What is the informal sector? Why does it exist? How does it impact the quest for growth and equity?