4. Policies and approaches to tackle the Informal Economy
The present section 4 is focused on the review of policies designed to tackle the informal economy with special reference to major actors in the field (governments, international organisations and donors).
The section 4.1 analyses the relationship between the informal economy and a number of context descriptors (such as, for example, level of development, socio-political systems, and regions), with a special focus on the potential causality among these descriptors and the degree of informality. The existence of a causal relationship between the informal economy and other key characteristics could be used in policy formulation. We proceed to discussing normative versus empirical approaches to policy formulation. Finally, explicit versus implicit focus on the informal economy is illustrated.
The section 4.2 is focused on the discussion of the main general or global approaches used in the framework of policies targeting the informal economy. These include in particular taxing the informal activities, upgrading the informal activities within the value chain, and organising the populations dependent on the informal economy.
Finally, the section 4.3 deals with the analysis of three main sectoral approaches for policies targeting the informal economy to ensure the transition towards the formal economy. These include social protection, technical and vocational skills enhancement), and finance.