Partnerships and initial objectives

2In all three countries, the projects were launched mainly in partnership with their national statistical institutes: National Institute of Statistics and Informatics (Inei) in Peru, Instat in Madagascar, and the General Statistics Office (GSO) in Vietnam. This privileged partnership arises from the need for support from these institutions in measuring employment and the informal economy and from the specific nature of Dial’s mission. The objective is to invest in the implementation of specific official statistical surveys that leverage the skills of professional statisticians, which should be strengthened if necessary.

3However, as the objectives were not limited to generating data but also included an important analytical component, collaborations with university researchers or research centres were also developed in all three cases.1

4Lastly, the work was carried out with the support of or in coordination with regional or international institutions. At the regional level, the programme in Peru was linked to a project of the Andean Community of Nations (CAN),2 the Madagascar programme was extended to a larger programme conducted at the African level by Afrisat,3 while the Vietnamese programme was linked to a project on measuring the informal sector in Asia, launched by Escap.4 In all three cases, the regional projects adopted the 1-2-3 survey methodology. More broadly, at the international level, the ILO and UNDP were partner organisations, while the projects were funded through bilateral (SCAC/MAE-France, DFID) and multilateral (European Union and World Bank) cooperation agreements.

Respective role of each institution

5IRD researchers were the driving force behind the methodology. In each country, the IRD team provided technical support5 for adapting the generic methodology to the country’s specific context, for training managers, for implementing the survey, and for analysing and disseminating the results.

6The NSIs are responsible for the statistical operation: after a method appropriation and adaptation phase (adjusting certain questions and possibly adding specific questions or modules), the NSI is responsible for implementing the survey (collection in the field and first results). The NSIs are at the centre of the process: they are responsible for collecting data requests before implementation (from the potential users of the data) for the subsequent initial analysis and reporting of the results. However, in most cases, the various phases of the survey process (preparation, fieldwork and results) are conducted in collaboration with other institutions (in close partnership with IRD researchers during their assignment).

7In some cases, the research centres were involved in adapting the questionnaire to fit the local situation, but they were mainly involved in the subsequent analysis of the results in conjunction with the NSIs.

8The regional bodies provide an institutional framework and support, coordinated with the activities of IRD researchers, allowing them to obtain funding under regional programmes. To some extent, they provide and guarantee the credibility and legitimacy of the 1-2-3 survey as a harmonised research instrument that can be applied by all interested countries in the region.

9Finally, donors participate in discussions aimed at adapting the methodology or providing guidance on specific questions considered to be priorities for the analysis. More importantly, however, donors play an essential role in providing financial support, which not only ensures that the survey operations can be carried out but also strengthens the credibility and reputation of the 1-2-3 method.

10Each institution has its own role (with varying degrees of emphasis/distinctness), and while such collaborations are not without difficulties, it was possible to implement them and develop synergies.

Country-specific framework and contexts

11In Peru, the goal of the project was to integrate the measurement of the informal economy into the system of national accounts, avoiding an overly sectoral approach in order to quantify its weight in the economy as a whole and understand its relationship with the rest of the economy. As a result, the work undertaken went beyond the scope of labour market and microenterprise specialists. Accordingly, research on the informal economy was used as an input into thinking about social protection, policies to increase competitiveness, tax policies, etc.

Potato sellers, Yungay district, Ancash, Peru, 2015.

12In Madagascar, the work was part of the Madio (Madagascar-Dial-Instat-Orstom) project, whose objective was to study the conditions for the success of the dual (economic and political) transition process which unfolded in the country in the early 1990s. In 1996, one of the first findings was that, although the informal sector could play a role in cushioning the shock of the crisis, it is typified by extremely precarious working conditions and jobs (Fiche d’actualité scientifique, May 1996). Based on this finding, the aim was to identify the conditions for the growth in informal activities that are compatible with an exit from precariousness.

13In Vietnam, the request came from the GSO, which sent a delegation to France in 2003. The members of this delegation asked Insee for support in measuring the informal economy, a request that Insee delegated to Dial, which set up the collaborative project. In Vietnam, the interest in the informal economy stems primarily from concerns about trends in inequality. Vietnam is experiencing a high rate of economic growth with significant positive effects on poverty reduction. However, this raises a number of questions: Does this rapid growth also benefit those in the informal economy? Are these people marginalised or do they benefit from the spill-over effects of the formal sector?

Research topics

14In addition to describing the informal economy (its weight, the characteristics of activities, their links with the informal sector), it is important to identify its causes, its dynamics and the underlying logic. These topics have been the subject of considerable academic and political debate. For example, is the informal sector a residual component disconnected from the rest of the economy, consisting of activities created by default based on a subsistence logic (as a survival mode) because the formal economy is unable to create enough jobs (the “dualist” approach hypothesis)? Or is informality the result of the fact that formal enterprises are looking for cheap products and labour that only the informal ones can provide (the “structuralist” school)? Or, lastly, is “entry into informality” a deliberate choice to Escape regulation and circumvent the costs of legalisation linked to registering the activity (the “legalist” approach)?

15To provide answers and define policies, it is necessary to know which of these hypotheses prevails, or more precisely, since informality is a multidimensional phenomenon, it is necessary to identify the types of activities or jobs that fall under each of the approaches mentioned above.

Knowledge base

16The international statistical community has reached a consensus on the definition of the informal economy. It is structured around two key concepts: the informal sector on the one hand and informal employment on the other (Hussmanns, 2004). Broadly speaking, the informal sector is defined as all individual enterprises that are unregistered and/or operate on a very small scale (often with fewer than five employees) (ILO, 1993). Informal employment includes all unprotected employment in the informal or formal sector (lack of social security coverage or employment contracts, etc.) (ILO, 2003).

17These internationally agreed definitions have provided a formal and harmonised framework for reliable, relevant, in-depth analysis and comparison. However, initiatives to analyse the informal economy started without waiting for these resolutions on these definitions. The first efforts to measure and analyse the phenomenon (including the IRD’s work) have helped to substantiate the suitability of the standard definitions adopted. Furthermore, despite these important conceptual advances, confusion continues to reign in the academic community and more broadly in the development community. This is supported by a number of publications that purport to deal with informality in developing countries, but in which there are as many definitions as there are authors.6 The summary published by the ILO and the World Trade Organisation (WTO) on the links between the informal economy and trade openness stresses that the lack of a consistent definition in the analyses and of comparable data across countries seriously undermines the general lessons that can be drawn (Bacchetta et al., 2009). This is also illustrated, for example, by the most unrealistic estimates that were put forward on the weight of informality in Vietnam7 before the IRD project was set up using a rigorous and appropriate measurement method.