Toward an Understanding of the Informal Economy

Abstract

After surveying some of the typical content of the informal economy, the authors argue that the most substantial amount of activity in this sector is based on family and community and may not involve an immediate expectation of financial return. It would include local barter, mutual aid and self-help networks as well as other activities such as light construction and repair work. Reliance on such networks, common in preindustrial economies, continues to serve specific needs in industrial and postindustrial societies, filling in where the conventional economy falls short or fails. By its very definition, informal activity is difficult to investigate and monitor and raises questions about the legitimate concerns of government.