Informal Economies and Human Rights: Towards Universal Policy Standards

Despite the centrality of informal economic activity in the lives and livelihoods of much of the world’s population, its human rights dimensions remain poorly understood. This paper seeks to explore these by interrogating the complex ways in which informal economies are governed and considering the implications that different forms of governance have for the rights of the poor. Focusing on the Global South, it discusses six common features that characterize the governance of informality: (1) exploitation, where informal economies are incorporated into strategies of accumulation that produce and perpetuate inequality at the local, national and/or global level; (2) repression, where the state seeks to eradicate informal economic activities and employs punitive measures against those who engage in them; (3) neglect, where protections and forms of livelihood support that the poor can access are limited or non-existent; (4) co-option, where politicians, often taking advantage of the precarity and vulnerability that regularly accompanies informality, engage in forms of clientelism for political purposes; (5) support, where various policies are adopted and programs introduced that aim to provide benefits for those who engage in informal economic activity; and (6) formalization, where the state seeks to bring informality into the formal economy and enforce relevant legal and regulatory standards. It then considers what insights understanding these human rights implications can offer in relation to policy approaches to informality that aim to protect the rights of workers, with a particular focus on the International Labour Organization’s (ILO) Recommendation 204. It concludes by considering what obstacles remain to developing universal policy standards for protecting rights in informal economies in theory and practice, and by outlining a research agenda that is aimed at achieving this goal.