In the early 1990s, a consensus emerged among the leading experts in the field of small and micro business finance. It is based on three elements: The focus of projects should be on improving the entire financial sector of a given developing country; a commercial approach should be adopted,...

Researchers have incorporated labor or credit market frictions in isolation within simple neoclassical models to open up a role for institutions, inject realism into their models and examine the impact of these distortions on output and employment. We present an overlapping generations model...

Informality has long been a salient phenomenon in developing country labor markets, thushas been addressed in several theoretical and empirical research. Turkey, given its economicand demographic dynamics, provides rich evidence for a growing, heterogeneous andmultifaceted informal labor market....

We study the impact of tax and minimum wage reforms on the incidence of informality. Togauge the incidence of informality, we use measures of the extent of tax evasion, the extentof minimum wage non-compliance, and the size of the informal workforce. Our approachallows us to examine (i) the...

Using data from the Philippines, this paper seeks to understand how households in thestudy area apparently manage to avoid falling in a debt trap in spite of frequent borrowing.Findings suggest this is achieved via three institutional features. First, most informal debtcarries no interest. As we...

This chapter develops a unified analytical framework, drawing on and extending the existing literatureon the subject, for studying the role of property rights in economic development. Itaddresses two fundamental and related questions concerning the relationship between propertyrights and...

This paper analyzes how group lending programs use joint liability to utilize localinformation that borrowers have about each other’s projects through self-selection of groupmembers in the group formation stage. These schemes are shown to lead to positiveassortative matching in group...

The European Social Survey data are used to analyze informal employment at the main jobin 30 countries. Overall, informality decreases from South to West to East to North. However,dependent work without contract is more prevalent in Eastern Europe than in the West,except for Ireland, the UK and...

Two stylized representations are often found in the academic and policy literature oninformality and formality in developing countries. The first is that the informal (or unregulated)sector is more competitive than the formal (or regulated) sector. The second is that contractenforcement is...