Understanding the Informal Economy and its Challenges in Urban Planning

URBAN PLANNING PROCESS 1
URBAN PLANNING PROCESS
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URBAN PLANNING PROCESS 2
Number 1
An informal economy refers to the part of the economy which deals income generating activities
that are not regulated or protected by the state (Selling & Work, 2009). This economy is
characterized by illegalities such as lack of business permits, tax evasion and even violation of
labor rights which may lead to extortion of workers by their employers.
Number 2
i. The dualist approach
ii. The structuralist approach
iii. The legalist approach
Number 3
The dualist perspective holds that the informal economy originated from insufficient
development of the economy. It provided a way to earn a living for the unskilled or rather the
low-skilled rural to urban migrants hence providing them with a means of survival.
Number 4
The structuralist view argument is that the formal and the informal economies are inter-related
but the informal economy is exploited by the formal economy. The informal wage workers are
hired on informal basis by the formal enterprises which may not pay them or may be reluctant to
adhere to the legislated labor laws. Majority of the self-employed in the small economy sell on
commission or are just dependent workers who have connections to the multi-national, large,
medium or small-sized businesses. They vend their products.

URBAN PLANNING PROCESS 3
Number 5
The legalist approach views the informal economy as the playground of emerging entrepreneurs
subject to constraints brought about by the unnecessary legislation. It focuses on the self-
employed formally and semi-formally. It argues that those in the informal economy are
rebellious of the mercantilist state legislation that tends to be in favor of the elites and hence
concludes counter-hegemony is one of the features of the informal economy. Self-employment
and its relationship with the state are highly investigated.
Number 6
i. Basic rights
ii. Civic rights
iii. Survival rights
iv. Security rights
Number 7
Basics rights consist of proscriptions on child labor, involuntary servitude and physical coercion.
These rights are under-written by the global consensus.
Civic rights are composed of freedom of expression and association and collective
representation. These rights are mostly embraced by those nations which are democratic.
Survival rights are composed of living wage rights, accident compensation rights and rights to
limited work of the week.