‘Informality’ in the World Development Report 2013: implications for Papua New Guinea

An enthusiasm for informal economic activity is sometimes dismissed as ‘promoting underdevelopment’. So facile a dismissal of this very important issue is rebutted by a careful reading of the latest edition of the World Development Report (WDR) which takes ‘Jobs’ as its subject. WDR 2013 adopts a broad definition of ‘jobs’, pointing out that ‘almost half of all workers in developing countries are engaged in small-scale farming or self-employment, jobs that typically do not come with a steady paycheck and benefits’. This new WDR is notable for a positive, if somewhat qualified, endorsement of the value of informal economic activity.

Asking ‘why some jobs do more for development than others’, WDR 2013 concludes that jobs with the highest ‘development payoffs’ are not found only in the formal sector. Indeed, ‘informal jobs can also be transformational’ (WDR 2013, xiii). The task for government is to ‘identify which jobs would do the most for development given their specific country context’. This implies that in some ‘country contexts’ informal economic activity could be embraced as a transformational element in a national development strategy. Such an approach has already been advocated, here and here, for the specific circumstances of Papua New Guinea (PNG) [read more].

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