World Underneath: The Origins, Dynamics, and Effects of the Informal Economy
Author(s)
Castells, Manuel; Portes, Alejandro
Abstract
History is full of surprises. The informal economy, long considered incompatible with advanced, institutionally rich capitalist economies, is making a comeback in developed and less developed regions. In fact, informalization appears to be characteristic of recent economic trends: horizontal networks rather than vertical bureaucracies; subcontracting rather than union contracts; and the expansion of entrepreneurship, cash economies, barter transactions, and casual labor markets. This article explores the nature of the informal economy, its causes and effects, and its integral relationship to the formal economy.
