DV433      Half Unit
The Informal Economy and Development

This information is for the 2021/22 session.

Teacher responsible

Dr Kate Meagher CON 7.11


This course is available on the MSc in Development Management, MSc in Development Studies, MSc in International Development and Humanitarian Emergencies, MSc in Political Economy of Late Development, 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.

Students will be allocated places to courses with priority to ID and joint-degree students.  If there are more ID and joint-degree students than the course can accommodate, these spots will be allocated randomly.  

Non-ID/Joint Degree students will be allocated to spare places by random selection with the preference given first to those degrees where the regulations permit this option.

Course content

The expansion of the informal economy, which now employs more than 60% of the world’s workers, represents a central paradox of contemporary economic development. COVID-19 has further exposed the pervasive role of informal employment across the globe.  Practitioners, policy makers and academics seek a clearer understanding of its impact on poverty, employment, governance and inclusive 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? How does a greater understanding of the size and organization of informal economies affect policy on urban service provision, social protection or taxation? What are the implications of the informal economy for social cohesion and popular politics in developing countries?


This course will explore how high levels of informality in developing countries are shaping processes of growth and governance in the Global South. The effect of informality on new policy narratives of inclusive growth will be a central theme in the course. Using a comparative institutional approach, we will examine 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. Key issues covered in the course include the impact of the informal economy on labour markets, weak states, gender empowerment, urban services, social enterprise, social protection, taxation, 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.


This course is delivered through a combination of lectures and seminars in the LT. Seminars will be at or upwards of 45 minutes duration and lectures will be at or above 60 minutes duration. There will also be a revision session in the ST.

Student on this course will have a reading week in Week 6.

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 (2018) Women and men in the informal economy: a statistical picture (third edition) / International Labour Office – Geneva: ILO.


4. Breman, J. (2013). At work in the informal economy of India: a perspective from the bottom up. OUP Catalogue.


5. Chen, M., & Carré, F. (2020). The Informal Economy Revisited: Examining the Past, Envisioning the Future (p. 326). Taylor & Francis.


6. Cooper, Neil and Michael Pugh, with Jonathan Goodhand (2004) War Economies in a Regional Context: The Challenges of Transformation. Boulder: Lynne Rienner.


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


8. Kabeer, Naila (2008) Mainstreaming Gender in Social Protection for the Informal Economy. London: Commonwealth Secretariat.


9. Kinyanjui, Mary Njeri (2014) Women in the Informal Economy in Urban Africa:  From the Margins to the Centre. London: Zed Books.


10. Kraemer-Mbula, E., and Wunsch-Vincent, S. eds.(2016) The Informal Economy in Developing Nations: Hidden Engine of Innovation? Cambridge UP.


11. Kuruvilla, S., Lee, C. K., & Gallagher, M. (2011). From iron rice bowl to informalization: Markets, workers, and the state in a changing China. Cornell University Press.


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


13. Lindell, I. (2010) Africa’s Informal Workers: Collective Agency, Alliances and Transnational Organizing in Urban Africa. London: Zed Books.


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


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

Course selection videos

Some departments have produced short videos to introduce their courses. Please refer to the course selection videos index page for further information.

Student performance results

(2017/18 - 2019/20 combined)

Classification % of students
Distinction 12
Merit 66
Pass 20
Fail 2

Important information in response to COVID-19

Please note that during 2021/22 academic year some variation to teaching and learning activities may be required to respond to changes in public health advice and/or to account for the differing needs of students in attendance on campus and those who might be studying online. For example, this may involve changes to the mode of teaching delivery and/or the format or weighting of assessments. Changes will only be made if required and students will be notified about any changes to teaching or assessment plans at the earliest opportunity.

Key facts

Department: International Development

Total students 2020/21: 47

Average class size 2020/21: 15

Controlled access 2020/21: Yes

Value: Half Unit

Guidelines for interpreting course guide information

Personal development skills

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