The nature of the Informal Economy
Now that the empirical findings have been presented in the three preceding chapters, this chapter brings some of the most relevant ones together in order to make statements about the regulation and the nature of the informal economy. It begins by discussi
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Introduction Now that the empirical findings have been presented in the three preceding chapters, this chapter brings some of the most relevant ones together in order to make statements about the regulation and the nature of the informal economy. It begins by discussing the usefulness of responsive regulation theory for regulating the informal economy. Subsequently, some main characteristics of the informal economy are discussed on the basis of the empirical results, which will in turn lead to a re-conceptualisation of the informal economy.
egulating the Informal Economy: R The Usefulness of Responsive Regulation Theory Application of the Regulatory Pyramids In the empirical chapters, I applied the regulatory pyramids incorporated in responsive regulation theory as developed by Ayres and Braithwaite © The Editor(s) (if applicable) and The Author(s) 2016 D. Boels, The Informal Economy, DOI 10.1007/978-3-319-43123-9_6
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The Informal Economy
(1992). In this theoretical application, the markets (and the people in them) are the analysis unit: I studied how the markets are regulated and how enforcement is manifested (Gill 2002). Here, in this section, some conclusions regarding this application are offered, together with a discussion of the usefulness of responsive regulation theory for regulating the informal economy. It appears that the pyramids of regulatory strategies have exactly the same shape in the cases on street selling and prostitution, although the content differs. Furthermore, self-regulation was present in all three cases, but not always in the way Ayres and Braithwaite (1992) meant it. The self-regulation at the individual level, which was found in the three cases, entailed establishing agreements or arrangements by several individuals instead of by representative organisations. These agreements were not enforced on the whole market and did not necessarily influence it. The self-regulation at the sector level corresponded more to the voluntary self-regulation proposed by Ayres and Braithwaite (1992). The absence of enforced self-regulation in all three cases was remarkable but is in line with the acknowledgement of Ayres and Braithwaite (1992, 106) that this strategy is mostly applicable to big firms that can afford their own compliance managers. Government regulation was found at several levels (federal, regional, provincial, local), which is typical for the Belgian governmental structure. Regulation at lower levels needs to be congruent with that at higher levels. As such, this process follows an inverted pyramid structure: from the top to the bottom. A main assumption of the pyramid is that law enforcers should be responsive to how effectively citizens or corporations regulate themselves before deciding whether to escalate intervention1 (Braithwaite 2006). The three cases only demonstrated this principle to a certain extent. Federal regulation was not responsive to lower levels of regulation as higher levels had not been established as a ‘stick behind the door’. They are not necessarily
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