Aninclusiveapproachto regulatingthesecondeconomy AtaleoffourSub-SaharanAfricaneconomies
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Date
2018-09-03
Journal Title
Journal ISSN
Volume Title
Publisher
Emerald Group Publishing Limited
Abstract
Purpose – This study aims to examine the experiences and lessons from formalisation initiatives in four sub-Saharan African countries. Drawing upon the three main theories that explain the existence of business informality – the exclusion model, rational exit model and dual economy model – the study offers an alternativepathtobusinessformalisation. Design/methodology/approach – The researchers adopted a descriptive-qualitative method, and throughthetriangulationofdata,identifiedemergingthemesandpatterns. Findings – The findings suggest that the informal sector has a small layer that responds to the simplification of regulations and a larger one that requires a different formalisation framework. This shift in paradigm, indirect or group formalisation, where business associations facilitate traceability (registration), self-regulation, access to resources and services for members was observed in all four of the economies studied:Kenya,Ghana,RwandaandTanzania. Research limitations/implications – As with every qualitative study, subjectivity and interpretation inevitably affect the replicability and generalisability of the findings. However, the rich meanings emerging fromthequalitativeanalysisofthetextarecriticallyinsightful. Practical implications – Developing countries should explore indirect formalisation. Provision of workspace and construction of business premises for informal operators should be given high priority. The model for building structures for micro enterprises should change in favour of ownership by the operators throughtheirownassociationsorotherprivatesectorinvestors. Originality/value – A pioneering study on cross-country analysis based on sub-Saharan African nations tounearthanewparadigm,ashifttowardsindirectorgroupformalisation.
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Keywords
Informalsector,Sub-SaharanAfrica,Shadoweconomy,Businessinformality, Inclusiveformalization,Indirectformalization