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Evaluating the explanations for the informal economy in third world cities: some evidence from Koforidua in the eastern region of Ghana

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Abstract

This paper re-evaluates the explanations for informal work in third world cities. Until now, informal work has been theorized either as a residue (modernisation), by-product of contemporary capitalism conducted out of economic necessity (structuralism) or an alternative to formal work chosen due to either an over-burdensome state (neo-liberalism) or for social, redistributive, resistance or identity reasons (post-structuralism). Reporting a study of 80 households in Koforidua in Ghana, this paper finds that although its depiction as a residue is not valid, the other representations of the informal economy are each valid in relation to different types of informal work and varying populations in this third world city, and that only by combining them will a finer-grained and more comprehensive understanding of the diverse nature of the informal economy be achieved. The outcome is a call for more nuanced explanations of the informal economy in other contexts.

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  1. Schulich School of Business, York University, 4700 Keele Street, Toronto, ON, M3J 1P3, Canada

    Kwame Adom

  2. School of Management, University of Sheffield, Mushroom Lane, Sheffield, S10 2TN, UK

    Colin C. Williams

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  1. Kwame Adom
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Correspondence to Kwame Adom.

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Adom, K., Williams, C.C. Evaluating the explanations for the informal economy in third world cities: some evidence from Koforidua in the eastern region of Ghana. Int Entrep Manag J 10, 427–445 (2014). https://doi.org/10.1007/s11365-012-0224-5

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