Tackling enterprise in the informal economy: an introductory overview

This paper introduces this special issue by providing an overview of the various policy options and approaches available for tackling enterprise in the informal economy. It firstly reviews four possible hypothetical policy options, namely doing nothing, eradicating informal sector enterprise, moving formal enterprises into the informal economy, or formalizing enterprise in the informal economy. Displaying that formalizing informal sector enterprise is the most viable and most commonly adopted approach, it then reviews the two approaches of using either direct controls, which increase the costs of operating informally and/or the benefits of operating formally, or indirect controls that seek greater self-regulation. Following this, the ways in which these approaches can be combined is then reviewed. The outcome is a comprehensive introductory overview and conceptual framework for contextualizing the arguments of the papers in this special issue.