DV433      Half Unit
The Informal Economy and Non-State Governance

This information is for the 2013/14 session.

Teacher responsible

Dr Kathleen Meagher CON.711


This course is available on the MSc in Development Management, MSc in Development Studies, MSc in International Development and Humanitarian Emergencies, MSc in Urban Policy (LSE and Sciences Po) and MSc in Urbanisation and Development. This course is available with permission as an outside option to students on other programmes where regulations permit.

Course content

Contrary to standard development theory, the informal economy has been expanding in the face of liberalisation and globalisation, and now creates more jobs than the formal economy in most developing countries. The sheer size of the informal economy, and its impact on poverty, social exclusion, governance and entrepreneurial development have brought economic informality back onto the agenda of international development. In a globalising environment, are large informal economies a poverty trap or an engine of growth?  Do they stimulate entrepreneurship and popular empowerment, or promote criminality and exploitation?  This course will explore the impact of economic informalisation on governance and economic development in the global south. It will take a comparative institutional approach to the study of informal economies in a range of regional contexts, including Africa, the Middle East, South and East Asia, and Latin America, highlighting variations in activities, relations with the state, global integration and development outcomes. After an introductory overview of the changing role of informality in liberalising and globalising economies, the course will focus on the institutional role and development impact of contemporary informality in a range of empirical contexts. Key issues to be covered in the course include the impact of the informal economy on labour markets, weak states, gender empowerment, urban service provision, social enterprise, social policy, taxation and governance, and popular politics. Attention will be focused on the potential as well as risks of large informal economies in the face of contemporary development challenges, drawing on empirical evidence and comparative case studies from across the developing world.


15 hours of lectures and 15 hours of seminars in the LT. 1 hour and 30 minutes of lectures in the ST.

Formative coursework

Formative coursework will involve a 2,000 word essay during the term and at least one presentation.

Indicative reading

1. Portes, Alejandro, Manuel Castells and Lauren A. Benton, eds. 1989. The Informal Economy: Studies in Advanced and Less Developed Countries. Baltimore: John Hopkins University Press.

2. Perry et al. (2007) Informality: Exit and Exclusion, World Bank (available on Google Books)

3. ILO (2001) Decent Work and the Informal Economy, Geneva.

4. Guha-Khasnobis, Basudeb, Ravi Kanbur and Elinor Ostrom. 2006. Linking the Formal and Informal Economy: Concepts and Policies. London: Oxford University Press.

5. Meagher, K. (2010) Identity Economics: Social Networks and the Informal Economy in Nigeria, Oxford: James Currey.

6. Fernandez-Kelly, P. and J. Shefner, eds. (2006) Out of the Shadows: Political Action and the Informal Economy in Latin America, Penn State UP.

7. Lund, Christian, ed. (2006) Twilight Institutions: Public Authority and Local Politics in Africa,Wiley-Blackwell.

8. Cooper, Neil and Michael Pugh, with Jonathan Goodhand, War Economies in a Regional Context: The Challenges of Transformation. (Boulder: Lynne Rienner.

9. Chen, M. et al. 2005.  Progress of the World’s Women:  Women, Work, and Poverty.  New York:  UNIFEM.  Available at: http://www.un-ngls.org/orf/women-2005.pdf

10.  Elyachar, J. (2005) Markets of Dispossession: NGOs, Economic Development, and the State in Cairo (Durham, N.C.: Duke University Press.

11. Levy, Santiago (2008) Good Intentions, Bad Outcomes: Social Policy, Informality and Economic Growth in Mexico, Brookings Institution.

12.Lindell, I. (2010) Africa’s Informal Workers: Collective agency, alliances and transnational organizing in urban Africa, Zed Books.


Exam (70%, duration: 2 hours) in the main exam period.
Essay (30%, 3000 words) in the ST.

Student performance results

(2011/12 combined)

Classification % of students
Distinction 6.2
Merit 77.1
Pass 16.7
Fail 0

Teachers' comment

This is a new course for students who wish to understand how developing economies really operate by deciphering the ways in which burgeoning informal economies unleash unanticipated effects on development processes.  It is a challenging course that opens up new perspectives on processes operating under the radar of conventional development thinking, and has been rewarding for students of all ability levels.  It is a multi-disciplinary course with no particular requirements in terms of quantitative skills, though students with a background in economics will also find the course illuminating.

Key facts

Department: International Development

Total students 2012/13: 45

Average class size 2012/13: 11

Value: Half Unit

Guidelines for interpreting course guide information

Personal development skills

  • Self-management
  • Problem solving
  • Application of information skills
  • Communication
  • Specialist skills

Course survey results

(2011/12 - 2012/13 combined)

1 = "best" score, 5 = "worst" score

The scores below are average responses.

Response rate: 90.4%



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