Determinants of energy use in the informal food sector

Although enterprises in the informal food sector require energy to transform, cook and process food, energy-use patterns in this sector are not well understood by policymakers and the local-level authorities who regulate their trading activities. This paper reviews relevant literature and presents empirical data collected in Rwanda, Senegal and South Africa on the use of traditional and modern energy sources by informal food sector operators. Our sample includes male- and female-operated enterprises in the urban centres of three African countries where the informal food sector is important, not only for providing the convenience of affordable and readily prepared meals, but also as a source of income for women and men in developing countries. Multiple fuel-use and energy-stacking strategies are common among informal food enterprises and policy needs to acknowledge this if it is to intervene in ways that will benefit both enterprises and regulators.     

Service provision for street-based traders in Pietermaritzburg,KwaZulu-Natal: comparing local findings to lessons drawn from Africa and Asia

South Africa's informal economy absorbs approximately one-quarter of the labour force of 15 million people and is therefore the fastest growing sector of employment. Street-based trading constitutes a major subsector within the informal economy and is continuously expanding through unrelenting proliferation of survivalist micro-enterprises. However, few organisations that support enterprises are accessible or appropriate to survivalist and informal sector micro-enterprises. Interviews were conducted with 98 Pietermaritzburg street-based traders and ten KwaZulu-Natal service providers to determine service provision requirements. The results are compared with findings of four international studies. The findings suggest that for survivalist enterprises to benefit from entrepreneurial education and training services, obstacles with regard to South African traders' understanding of entrepreneurship and cultural limitations to enterprise growth should be overcome. Service institutions also require incentives to serve the informal sector, as well as the capacity to design and deliver appropriate services.     

Recession and the informal sector in South Africa

Despite the recent avalanche of writings investigating the informal sector, scant consideration has been accorded to the impact of an economic recession upon the growth and complexion of the informal sector.The object of this paper is to reflect upon the likely consequences of economic recession upon the South African informal sector in light of the extant international literature. Two different sets of processes are identified as impacting upon the growth and composition of the informal sector. The first suggests that the growth of the informal sector is the consequence of the lack of expansion of the formal sector. The second argues that much of the expansion in the informal sector is directly linked to its integration with formal sector enterprises. Under recessionary conditions, it is suggested that the growth of the informal sector may occur as a refuge from destitution but that the complexion of the informal economy will shift and be dominated by activities of a more ‘socially unacceptable’ nature.     

Informal retailing through home-based micro-enterprises: The role of spaza shops

The informal trade sector constitutes an important part of the South African economy, with estimated sales of R32 billion in 2002. Its emergence is largely attributed to the divergence between the growth in population, especially the urban population, and employment growth in the formal economy. Growth of informal enterprises, especially in the retail sector, is also thriving on the demand of less affluent households, whose household needs for unsophisticated and affordable products are aptly supplied by the informal sector. The aim of this article is to focus on one of the prominent sub-sectors of informal retailing, namely spaza or tuck shops, defined as small retail businesses which operate from a residential stand or home. Particular attention is paid to the size, role and characteristics of spaza trade in South Africa, which is estimated to account for nearly 3 per cent of South Africa's retail trade.     

GLOBAL MARKETS,FARMERS AND THE STATE: SUSTAINING PROFITS IN THE INDONESIAN COCOA SECTOR

The rapid expansion of cocoa farming among Sulawesi smallholders since 1980 has transformed the island into a hub within the global cocoa industry. It hosts a number of multinational trading firms and has an expanding grinding sector. In recent years, however, the cocoa sector has been struck by severe pest, disease and quality problems, which are undermining the long-term sustainability of one of Eastern Indonesia's most important rural industries. Some form of intervention is needed if the cocoa industry is to avoid steady decline. This paper examines the role of informal institutions, cocoa multinationals and government in attempts to maintain farm profits in Sulawesi.     

Sri Lanka’s Rural Non-Farm Economy: Removing Constraints to Pro-Poor Growth

We use a survey of rural enterprises from Sri Lanka to explore characteristics of the informal non-farm sector and identify obstacles to its expansion and productivity. Value added in this sector amounts to 80% of agricultural GDP participating households’ incomes are significantly higher than those of households who do not participate. Barriers to entry are low and the impact of non-farm development on inequality modest, implying a large potential contribution to growth and poverty reduction. Infrastructure constraints negatively affect new startups, investment in, and productivity of existing enterprises, with small enterprises being particularly affected.     

The efficiency of small and medium enterprises in informal metal manufacturing in Zimbabwe: Implications for stakeholders in the agricultural sector

This study uses the structure–conduct–performance framework to examine the structure and efficiency of small and medium enterprises in the informal metal manufacturing sector in Zimbabwe. Small and medium enterprises provide a lifeline to the country's resource-poor farmers, whose numbers increased exponentially after the agrarian reform in 2000. The study utilises nationally representative, enterprise-level data from five major towns (Harare, Chitungwiza, Bulawayo, Mutare and Rusape) in Zimbabwe. Various performance measures are applied at the industry level to assess efficiency, profitability and competitiveness; these include the Herfindahl–Hirschman index, concentration ratios, average yearly profits and Tobin's q ratio. The results indicate that small and medium enterprises in Zimbabwe are modestly efficient, profitable and competitive. These findings highlight the need to integrate informal metal fabrication activities into Zimbabwe's national economic development plans.     

A quantitative perspective on the informal sector in Southern Africa

This research note forms part of an on‐going study on the informal sector entitled ‘A quantitative and qualitative assessment of the informal sector’. Attention is directed here at the employment and income generating capacity of informal sector activities in Southern Africa. A need for data revealing this potential contribution of the informal sector exists because no country‐wide study has so far been conducted. The note is published in the expectation that it will generate comments which could provide added insight on an important aspect of development in Southern Africa.     

The informal sector in selected residential areas of Port Elizabeth

The Employment Research Unit undertook three surveys on the informal sector during 1985 and 1986, two among Blacks and one among Coloureds. The aim of the surveys was to establish the composition and nature of the sector in the Port Elizabeth/Uitenhage area. It was found that in both these sectors most of the respondents were involved in trading and that very few were involved in manufacturing. Incomes earned by most of the respondents were low. and compared to subsistence level incomes only, It also appeared that the employment creation spin‐off was low. Similar problems inhibited the growth and development of this sector for both Blacks and Coloureds. They were: short‐ and long‐term loans, accommodation, poor infrastructure, and legal restrictions.     

Tax Policies and Informal Employment: The Asian Experience

This paper develops and estimates a model linking tax policies to the size of the informal sector. Our results suggest that informal employment responds to the strength of enforcement and, to a lesser extent, to tax rates. Looking across sectors, we find service sector informal employment responds to both changes in tax rates and enforcement, while manufacturing sector informal employment responds only to enforcement. Quantitatively, changes in enforcement affect the manufacturing informal sector more than the service sector. These results are robust to various measures of informal employment and hold for other countries outside of Asia as well. Since informal employment (and hence output) is related to a country's GDP, these results suggest that policy makers should consider the effect of their policies on the size of the informal sector.
JEL classification : O 17; O 53; H 26     

Operating characteristics of rural non-farm enterprises in Central Province,Kenya

The ILO has identified seven characteristics which describe the operation of informal sector enterprises. These operating characteristics are assessed using survey data on rural non-farm enterprises located in market centers in Central Province, Kenya. Two characteristics (family ownership and small scale of operation) appear to be entirely true, but the remaining five are in need of qualification. Not all activities use labour-intensive technologies, indeed some require fairly large capital inputs. Indigenous resources are not important in many rural non-farm activities. Some important business skills are acquired inside the formal school system. There are not insignificant barriers to entering the more profitable non-farm enterprises. And these barriers, in conjunction with other factors, limit competition in some activities in many of the market centres. It appears that the operators of the more profitable and technically more advanced enterprises are forming a rural petty bourgeoisie. Thus contrary to the ILO interpretation, growth of the rural non-farm sector may be associated with greater income inequalities.     

A panel data analysis of the formal-informal sector labour market linkages in South Africa

This study explores the labour market linkages between the informal and formal sectors, using the first four waves of the National Income Dynamics Study data. The main focus is on three groups of employed: worked in the formal sector in all waves; worked in the informal sector in all waves; moved between the two sectors across the waves. Only 27% of informal sector workers in wave 1 transitioned to the formal sector in wave 4; 38% remained in the informal sector while 33% had their status changed to either inactive or unemployed. The econometric analysis indicates that older and more educated individuals living in urban areas and coming from households with fewer old-age grant recipients are significantly more likely to work in the formal sector, whereas more educated white males are associated with a significantly greater likelihood of transitioning from informal to formal sector employment.     

Nature and Determinants of the Linkages between Informal and Formal Sector Enterprises in Nigeria

This paper provides a quantitative analysis of the nature of the informal sector's linkages with the formal sector in Nigeria. The informal sector has both backward and forward linkages with the formal sector. The backward linkages involve the flow of raw materials, equipment, finance and consumer goods from the formal sector to informal sector enterprises. Two types of forward linkages are identified. These are subcontracting agreements with large domestic companies, government agencies and foreign companies on the one hand, as well as the supply of consumer goods from informal sector enterprises to the formal sector on the other. The empirical analysis based on a logit regression model reveals that key variables accounting for the extent of backward linkages with the formal sector pertain to registration of the informal sector enterprise, level of investment, annual income of the entrepreneur, number of employees, entrepre‐neur's previous work experience and the education of employees. In the case of forward linkages with the formal sector, the most important variables are registration on the part of the informal sector enterprise, investment expended to date, annual income of the entrepreneur, level of profitability of the enterprise, vocational training and education of employees. Le présent document fait une analyse quantitative de la nature des liaisons existant entre le secteur informel et le secteur formel au Nigeria. Le secteur informel a des liaisons aussi bien en amont qu'en aval avec le secteur formel. Les liaisons en amont impliquent l'existence d'un flux de matières premières, d'équipe‐ments, de finances et de biens de consommation, du secteur formel vers les entreprises du secteur informel. On a identifié deux types de liaisons en aval: il s'agit, d'une part, des accords de sous‐traitance avec les grandes sociétés nationales, les agences gouvernementales et les sociétés étrangères, et, d'autre part, de la fourniture de biens de consommation par les entreprises du secteur informel au secteur formel. L'analyse empirique faisant appel à un modèle de régression avec variables logit montre que les variables clés représentant le rôle que jouent les liaisons en amont dans le secteur formel de l'économie concernent l'enregistrement des entreprises du secteur informel, du niveau des investissements, du revenu annuel de l'entrepreneur, du nombre des employés, de l'expérience professionnelle antérieure des entrepreneurs et du niveau d'instruction des employés. Dans le cas des liaisons en aval avec le secteur formel, les variables les plus importantes sont l'enregistrement pour le compte des entreprises du secteur informel, les investissements dépensés jusque‐là, le revenu annuel de l'entrepreneur, le niveau des bénéfices de l'entreprise, la formation professionnelle et l'instruction des employés.     

Counting the Invisible Workforce: The Case of Homebased Workers

This paper illustrates the limitations of offical statistics on the informal sector with the case of homebased women workers: this is, women who work from their homes as own-account producers or subcontract workers. After noting that official statistics in most countries do not classify homebased subcontract work as such, the authors review the available data on both types of homebased work. The available evidence suggests that homebased work is an important source of employment throughout the world, especially for women, and that homebased workers comprise a significant share of the workforce in key export industries. The evidence also shows that the informal sector often has direct ties to the formal sector and is growth-promoting. The case of homebased workers, the authors conclude, illustrates the need for improved informal sector statistics as well as a better understanding of the impact of policies on the informal sector and the contribution of the informal sector to national economies.     

The Growth Barriers of Informal Sector Enterprises: Evidence from India

The present study investigates the growth barriers of informal sector enterprises in India. The empirical analysis is based on the National Sample Survey Organization's unit‐level data for three years, 2000–2001, 2005–6, and 2010–11. The results of the study reveal: proprietary and large firms survive and grow; enterprises managed by women are less likely to decline; inadequate power supply poses a severe growth obstacle to all categories of firms; and proprietary firms encounter capital shortage while large firms are constrained by the non‐availability of raw materials. We do not find evidence of sub‐contracting acting as an enabling factor in firm growth.     

Macroeconomic policy and output comovement: The formal and informal sectors in India

Is the informal sector different from the formal sector? We present an aggregative analysis of the formal and informal sectors in India to investigate the extent to which the two can be viewed as broadly homogeneous. Using a macroeconometric framework, the paper analyzes over past three decades the behavior of the two sectors with respect to each other and several government-related policy variables. It is found that the formal and informal sectors display markedly different attributes in terms of their relationship to policy variables. Furthermore, the informal sector appears to be decoupled from the rest of the economy.     

Impacts of Foreign Exchange Auctions on the Informal Market Rate in Myanmar

Since the abolition of the official peg and the introduction of a managed float in April 2012, the Central Bank of Myanmar has operated the daily auctions of foreign exchange aimed at smoothing exchange rate fluctuations. Despite the reforms, however, informal trading of foreign exchange remains pervasive. Using the daily informal exchange rate and Central Bank auction data, this study examines the impacts of auctions on the informal rate. Generalized autoregressive conditional heteroskedasticity models indicate that the auctions did not reduce the conditional variance of the informal rate returns. Overall, the auctions have only a quite modest impact on the informal exchange rate.     

Corruption and Entrepreneurship: Cross-Country Evidence from Formal and Informal Sectors

While the impact of institutional quality on formal entrepreneurial activity has been well documented in the literature, whether and to what extent corruption influences entrepreneurship in the informal sector is less forthcoming. In this article, we analyze the effect of corruption on entrepreneurship in the formal and informal sectors. Using unique cross-country data on formal and informal entrepreneurship, we find that corruption deters entrepreneurship in the formal sector and promotes informal entrepreneurship. These results remain robust even after conducting a series of sensitivity analyses.     

中国农村土地制度变迁的交易环境分析

中国农村土地制度的变迁是在特定的环境下发生的,本文通过对诺斯关于制度环境的定义,给出了交易环境的概念,并以交易环境为分析工具,分析了影响中国农村土地制度变迁的交易环境,具体包括:正式制度和非正式制度。     

PRODUCTIVE EFFICIENCY IN THE IVORIAN MANUFACTURING SECTOR: AN EXPLORATORY STUDY USING A DATA ENVELOPMENT ANALYSIS APPROACH

The African industrial structure is characterized by firm‐size heterogeneity with the coexistence of small, if not micro, enterprises in the informal sector and large formal organizations operating with modern technology. In this paper, using the Data Envelopment Analysis production frontier methodology, we investigate the technical efficiency of Ivorian manufacturing firms in four sectors of economic activity: textiles and garments, metal products, food processing, and wood and furniture. Efficiency scores are adjusted to take into account the impact of the external operating environment. These scores are then broken down into three elements: the purely managerial effect, the impact of the scale of production, and a technological effect capturing the potential gain that could result from the adoption of modern technology by small informal organizations. Not only formal activities prove to be more efficient in scaling their production but also, they greatly benefit from their modem technology.