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- Herausgeber: ibidem
- Kategorie: Geisteswissenschaft
- Serie: Soviet and Post-Soviet Politics and Society
- Sprache: Englisch
This book illustrates why and how informality in governance is not necessarily transitory or temporary, but a constant in most systems of the world. The difference between various administrative structures is not whether informality is present or not, but where, in which areas, it is located. The essays gathered in this volume demonstrate that, in some cases, informal mechanisms are self-protective, while, in others, they are perceived as ‘normal’ responses and a set of tactics for individuals, classes, and communities to respond to unusual demands. Where expectations—of the state, a company, or some commission—are too far from citizens’ existing models of normative behavior, informal behavior continues to thrive. Indeed, new tactics are adopted in order to cope with disjunctions between theory and reality as well as to serve as contrasts to values imposed by a center of power, such as a central state, a city administration, or the management board of a large company. The focus of the papers contained in this book is two-fold and rests on an analysis of phenomena manifesting themselves “beyond” and “in spite of” the state. The first part deals with areas where the state is not always, or only marginally, active whilst the second analyzes activities performed in conflict with state regulations, i.e. behavior often studied from a criminal and legal standpoint.
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Seitenzahl: 419
Veröffentlichungsjahr: 2016
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ibidemPress, Stuttgart
Table of Contents
Acknowledgements
In our frenetic rush to satisfy our national ranking systems, mostly based on quantitative criteria, social scientists have been hearing with increased frequency that many journal articles can be regarded as evidence of academicquality. Keen to emulate a model that has been widely accepted in science and in countries where a book is considered slightly better than an article and thus not worth the effort, we have been indoctrinated that we need to publish “more” with little or no incentive to publish “better”. I have to admit that I have not been immune to this pressure and, whilst this being my seventh book in six years it is my first, and sole, monograph.
In my attempts to publish a plethora of articles every year, I had little or no time for a book. However, I was faced with a double necessity, from which the idea for this book arose. On the one hand, I had to adjust to the formal criteria when competing for positions in some countries, including my own, where a lack of a monograph could be used as a reason to exclude you from a job panel. On a more positive none, there was the necessity to make the point of showing what over ten years of my research on informality has found. My initial attempts to challenge a too normative framework on corruption have gradually expanded into attempts to find the place for informality in a number of aspects related to theory and practice of governance, understanding social and cultural change.
The result was a hybrid work, containing some reprinted articles for which I thank the original publishers for their permission to reprint and some parts that were written ex novo for this book. This was partly due to the limitations in reusing my own material, which I was not aware of when I started thinking of a collection of articles. However, given the speed at which I was able to produce the new parts, or update the old ones, I am no longer afraid to write a monograph.
This book was also my first attempt to go beyond the geographical area that has “adopted me” since 2002. I was born (academically speaking) as an area study specialist and I initially saw myself as such. I think it is now time to go past this classification. Most of my empirical work has been focussing on post-USSR spaces from a number of perspectives. The most interesting result has been, so far, that political scientists see me as an anthropologist and anthropologists see me as a political scientist with an interest in ethnographic methods. I am neither, and this inspired me to search for employment in a geography department at the University of Edinburgh. My colleagues studied stones, fossils, soil but also development, medical geography and were interested in the accounts of the first geographical expeditions. I am grateful to each and every one of them for intriguing me with many different pieces of something that we all like, knowledge. It is in the same period that I was accepted to join the Scottish Crucible, which brings together the 30 most promising researchers of Scotland (well, we were 31 that year) from any discipline. I befriended colleagues from engineering, ICT, history, psychology, medical and nutritional sciences and I was even invited to give a talk in the School of Medicine at the University of Glasgow (thanks to Emilie Combet for believing in my idea on “food democracies” and to Ruth Neiland for her support many years after the Crucible).
While most of the material contained in this book draws from examples from post-USSR spaces it has to be said that if my academic work has been focusing on the region, my practical work on development, capacity building of NGOs, and empowerment of marginalised and vulnerable groups has happened mostly elsewhere. Since 2007 I regularly work in Vietnam; I have also had the chance to work extensively in Cambodia, China, Laos, Myanmar and, more recently, India and Nepal, visits that have helped me put things in perspective.
I have to thank Chris Schoen and Andreas Umland for believing in this project and giving me all the freedom I needed. My gratitude also goes to all the people and institutions that have offered their support by hosting me, giving me the chance to discuss my ideas or simply informally and formally discussed and criticised my ideas. First and foremost, the institutions I am currently affiliated with. At the School of Law and Governance of Dublin City University I am grateful to my oldfriend and colleague Donnacha ÓBeacháin but also to John Doyle, Eileen Connelly and Karolina Stefanczak. At Tallinn University I wish to thank all my colleagues from the School of Governance, Law and Society and especiallyEmilia Pawlusz and Raivo Vetik, the latter being the main reason why I ended up working in Estonia. I also thank Peeter Muursepp at Tallinn University of Technology for his constant support since my early Estonian days. I wish to thank Firouzeh Nahvandi who has adopted me at the Centre for International Development at the Free University of Brussels, to which I became affiliated with recently, and Sarah Murru who was the main initiator of the collaboration.
My initial idea was that this book would be written, at least partly, at the Jawaharlal Nehru University in Delhi. Unexpected, but welcomed, opportunities made this impossible but I have still benefited of the hospitality and support of my colleagues in the School of International Studies and in particular my friend Rajan Kumar, for whom I have no words to express my gratitude. Most of my understanding of Vietnamese informal practices, Vietnamese society and Vietnam in general is due to the hospitality and friendship of Don Tuan Phuong, his wife Que and his staff at the Centre for Sustainable Development Studies, where I have always been welcomed as part of the family. The list of people to thank is long and includes Thazin and Chan Aung at Charity Oriented Myanmar; Borith, Kalyan and Sitha at the Khmer Youth for Sustainable Development; Cui Shoujun at Renmin University of China. A special thank goes to Colin Williams at the University of Sheffield, who has always been supportive of my ideas and has kindly accepted to write the foreword to this book; to Sally Cummings for all herencouragementsand help,to my friend and partner in crime Jeremy Morris at the University of Birmingham who has had a role in virtually anything that I have written on informality since 2011to Oleksandra Seliverstova, who had a role in anything I have written on informality before that and on many other things after that, and to Sergey Seliverstov, to whom I owe some of the best insights on informality I have had.
In the course of the last fewyears I have also been lucky enough to find more and more amazingly nice people with whom I share the informality approach and that I wish to thank. Bori Kovacs and Lela Rekhviashvili, Nicolas Hayoz, Tanya Stepurko(whom I also with to thank for her help with the figures in this book), Christian Giordano, Gul Berna Ozcan, Ioana Ursachi, Rodica Ianole, Ida Harboe, David Jancsics, Alena Ledeneva, Huseyn Aliyev, Bettina Bruns, Olga Sasunkevich, Lale Yalçın-Heckmann, Kristine Müller, Judith Miggelbrink, Ida Harboe, David Karjanen, Ioana Ursachi, Anna Cieślewska, Aet Annist, Karla Koutkova, Anna Danielsson, Thom Davies, Jingqing Yang and Aleksandr Prigarin. May I be forgiven by the ones I have forgotten here.
Finally, I am thankful to a number of people who do not necessarily study informality but make me realise, every time I meet them, how lucky I am to have the chance, thanks to my work, to meet such amazing people: Raquel Freira and Licinia Simao at Coimbra, Heiko Pleines at Bremen, Bruno De Cordier at Ghent, Simon Tordjman at Toulouse, Ilona Baumane at Riga, Markku Lonkila who is now in Jyvaskula, Jan Kohler in Berlin, Filippo Menga at Manchester, Rick Fawn at St Andrews; Pal Kolsto at Oslo, Rico Isaacs at Oxford Brookes University. Finally, I wish to thank Gina Mzourek for proofreading most of the manuscript and the editorial team at Ibidem and in particular Florian Boiter and Valerie Lange who have been extremely helpful with editing and support. The encouragements and moral support are to be credited to them. Else, for anything you might not like in the book I am the one to blame.
Morelia,April2016
Foreword
All societies develop a way ofproducing, distributingand allocatingthe goods and services required by its citizens.In consequence, all societies have an economy of some type. Economies, however, cantake different forms. Tounderstand how aneconomycan be structured,it is common to differentiate betweenthree modes ofproducing, distributing and allocatinggoods and services, namely the'market'(private sector), the'state'(public sector) and the'informal'sector, even if different labels are sometimes attached to these realms.In recent decades, the widespread view has been not only that there has been a transition to the use of the 'market' in post-Soviet societies, but that globally the market is increasingly becoming hegemonic.In other words, there is firstly a view that in all economiesgoods and services are being increasingly produced and delivered through the formal (market and state) sphere rather than through the informal sphere (known as the'formalization'thesis) and secondly, that this formal production and delivery of goods and services is increasingly occurring through the market sector, rather than by the public sector, (the'marketization'thesis).
Given the dominance of this discourse regarding the trajectory of economies, it might be assumed that avoluminous evidence-baseexistssupporting thisview of the direction of economies. However,the worrying anddisturbing finding once one starts searching for evidence is that hardly any is ever provided.Put simply,it is such a widely accepted canon of wisdom that evidence isall true frequentlydeemedunnecessary. Indeed, perhaps the growing hegemony of theformalmarket economy is so obvious and uncontroversialto allthatevidence is not required. Perhaps, however, it is not. No other idea in the social sciences is accepted withoutan evidence-baseandthere areno grounds exist for exempting this meta-narrative regarding the totalising shift towards a formal market economy.
The importance of this book by Abel Polese is that it begins tocontest the belief that there is anirreversible,inevitableandinescapable shift towards a formal market economy in post-Soviet societies by re-evaluating the role of informal economies in this region of the worldand the limits of the state and market. In doing so, it provides a seminal contribution to the much wider scholarship on post-Soviet spaces that addressesthe recurring question of'transition'in order to dispute not only the past hegemony of the command economy system butimportantlyalso the notion that there is a universal linear trajectory of development in post-Soviet spaces towards a hegemonic ideal-type formal market economy system as some end point.What this book reveals through its in-depth analysis of informality is the need fora more nuanced argument to be adopted that allowsrecognition ofhow there has been a transformation of post-Soviet economies in varying ways from different starting points and along different economic development trajectories.
On the issue of thepast hegemony of the command economy system, this book through its rich and nuanced understanding uncovers that this was never the case and that the 'second economy' was a pervasive force in such systems. More importantly however, and on the inevitability of a formal market economy,thisbookmakesit very clear that a future where the formal market economy becomes hegemonic isfar from beingcast in stone. Instead,it reveals thatto assert that the formal market economy isinescapable and inevitable would beto fly in the face of the empirical evidencepresented hereonnot onlythe trajectories of post-Soviet economiesbut also the lived practices in post-Soviet societies.
By revealing how the advent of a formal market economy isnota natural process,but has to befacilitated with massive intervention and encouragement, and how informality sometimes replaces the formal market economy and renegotiates and reshapes the role of the state and state intervention, this book begins to make readers questionquite how expansive the formal market realm would have been if left to its own devices.The outcomeisa rethinking of the'economic'and amove beyond a closed view of economic development as a transition towards market hegemony. Instead, it reveals thateconomic developmentis an open-ended, heterogeneousandtransformative process.This book in other wordsdeconstructstheall toofamiliarand comfortablenotion of economic development as a transition to a formal market economy by revealing that formal market economic practices are just one of a plurality of economic practices in post-Soviet spaces. In doing so, itthereby decentresthe formal market economyfrom its pivotal position andrecoversalternative futures for economic development so as to disruptthosedominant economic discourses about the future of post-Soviet economies as beingone in which theformal market economyis hegemonic, totalising and universal.
However, the intentionin doing so is not simplyto replace one universal conceptualisation of the trajectory of economic development with another alternative universal. Instead,the contribution of the chapters in this book is to revealthat the informal economymay bepersistent and even growing in many post-Soviet spaces (negating the formalization and marketization theses) but also that the roleit playsin contemporary post-Soviet spaces is not always the same and that it varies according to both the type of informal work being considered and the population groups and places being evaluated.In doing so, this book brings out of the shadowsthe importantand varyingrole that informal economies play innot onlypeople's livelihood practicesbut also renegotiating and shaping governance and the role of state in post-Soviet spaces.In doing this, readers are being asked tore-think not only the discourse of'transition'in the post-Soviet world but also the meanings of the'economic'and'economy'.
At the heart of this book isthereforea critique of the notion that economic transition is at an end inpost-Soviet societiesand that the move from the command system to the market economy is complete.Through examining the lived experiences of people and the everyday,this book revealsthatpost-Soviet societiesare composed of a diverse repertoire of practices and that if the'economic'and'economy'are to be understood, it is necessary to move beyond such simplified accounts where one mode of production or another assumes a hegemonic status and all other systems of exchange disappear. Rather,it revealsthattheprocesses of transformationare abouta shift in the balance afforded to different systems of exchange and that these transformationsare in different directions in different populations, places and sectors.
This book thus unpacks the diverse relationships that can exist between the market, state and informal economy across the post-Soviet world and unravels how these relationships vary in different contexts. The outcome is a very rich and nuanced understanding of the multifarious nature of the relationships that can and do exist between informality, the state and the market in contemporary post-Soviet societies. I hope that you enjoy reading it.
Colin C.Williams, June 2015
Sheffield
Introduction: where is informality?
July 2015, Cambodian-Vietnamese border. People are waiting in a line to get their passports stamped. From time to time some people enter the room, skip the line and go directly to the passport window. They handed their passport to the border guard and get it back stamped almost immediately. When bypassed the first two or three times I felt outraged by the lack of formal rules and this apparent favouritism. However, after a few more of them passed I thought I understood the typology of the person and the secret pattern behind it. The border control was equipped with two indistinctly separate lines: tourist and business track. Many airports and other busy hubs have it. You pay for the privilege to be passed through customs, passport or security control thanks to an annual subscription fee. It is an exclusive club only for a few fortunate and busy people. At that border this was not an option. Instead, customers were subscribed to a pay-as-you-go service. They would pay only when they needed the service.
Corruption is often defined as the use or abuse of a public function for a private benefit. The border guards were using their position to earn some extra cash. However, I would ascribe this, and other situations presented in this book, to a broader category where individual and state morality diverge, or simply do not overlap (Polese 2008, 2014). In a market-like fashion this gap between supply and demand could be seen as the beginning of a new business. There is a demand by a significant number of customers that is not matched from the supply side. There are a number of people who need to regularly get through border control quickly but there is no mechanismor practice allowing this. I would expect that one day someone approaches the head of the post with a proposition to train and pay extra staff, which would allow for a designated passport control for business customers and thus formalise this informal practice.
In a standard situation, the state would welcome a private initiative as long as it does not invade its competencies or challenges the symbolic order, which it is based upon. At other times the state decides to outsource a service to cut down on fees but, until this happens, any intrusion into state-regulated areas can be seen as an infraction. Therefore, state rules and state morality are not static and immutable things. They evolve along with the state, its people and institutions so that new generations, products, systems of productions and dynamics generate new moral standards, or stretch current ones. In general, innovation generates new challenges, new demands and new needs. Initial views on informality would, at least in some cases, tolerate these informal practices. Transitionalists would see them as the starting point, slowly evolving into formal institutions (Geertz 1963, Lewis 1959) while ultra-liberals would see it as a way to make things work better in transitional countries (Leff 1964). This book certainly shares the vision that informality may be seen as a starting situation, a mechanism that may then be formalised and be used to propose new formal rules; it argues, however, that formalisation of an informal practice is not the end of a story but a phase in a cycle that might bring informality back in or might not.
If we take an area that is unregulated or under-regulated (that is, where the state has only started adopting formal rules to manage a particular aspect of a community life or of society) most habits and rules will be informal. If we take a country where migration is only a recent phenomenon, most of the services delivered will be managed by non-state actors (sometimes NGOs, sometimes informal groups or personal connections with no regularity and on a case-by-case basis) since institutions are busy regulating what they see as more urgent needs. How migrants gain access to education, healthcare and a number of other services and opportunities is outsourced to the people themselves, and can remain like this for a long time, even if the migrant population grows exponentially. At some point the state will feel the need to regulate certain aspects, create new services, obligations, prohibitions and opportunities. If they address all the urgent needs then informal rules will be gradually sided by formal rules, regulating most aspects, and might be swallowed by them. However, any inelastic and dysfunctional aspects of the new system, sets of rules and institutions will rely, for a solution, on informal renegotiations, person-to-person interaction and the use of a human agency. Assuming that the new set of rules and institutions perfectly fit the current situation and lead to a total formalisation of all aspects of management of migrants and their integration, the ideal situation will be limited to "here and now" that is fitting to the number of migrants present in a given moment within a given territory (they will have a certain educated/non-educated ratio, a given ethnic and gender distribution). Whilst small changes in the migrant population (in terms of gender, age, occupation, ethnic and religious background) are likely to be absorbed by the system, more significant changes will generate new needs, new issues and new challenges.
In a democratic state, newly introduced rules have to be proposed, evaluated, voted, adopted and then implemented. This means that, even in the most effective state, there will be a fair delay between the moment a new phenomenon or tendency manifests itself, the moment it is perceived and the moment new measures are adopted. Institutions will have to identify a new problem, propose solutions, debate them, adopt and test them, before something starts changing. Even assuming that the first proposed solution turns out to be "the perfect one", the decision chain is likely to bring institutions to address, today, yesterday's problems.
From this point of view, informality originates in existing formal rules and structures to complement them. As such, the definition used in this book is that informality is the space between two formal rules. We can visualise this as a surface covered with dots that represent formal rules. The more the state is regulated the more there will be dots and the smaller the distance will be between them. But dots cannot cover the entirety of the surface. There will always be some unregulated space and informality is here to fill it.
This view suggests that there are two ways to limit informality in a system, either quantitatively or qualitatively. The first one rests on a drastic reduction of the amount of informal transactions. By filling our surface with dots one leaves an agency so little space that it becomes virtually impossible not to play by its formal rules. Theoretically possible, this is a bit utopian and impossible to achieve without any damage. Most repressive systems, striving to regulate and limit individuality and initiative, have high amounts of informality and overregulated countries are often seen as suffocating people's initiative so to make economic or social development almost impossible (interestingly enough, evidence shows that informality, in both situations, blossoms). The second one is to limit informality qualitatively. Informal transactions, in other words, are tolerated or even encouraged as long as they do not affect the way a system works. This means not to fill the surface with dots but to place the dots in the right place so to leave a clear message: play informally with anything, but with this particular aspect. This more liberal approach is likely to give better results as people still feel that they have their freedom, can express their creativity, initiative and entrepreneurship while working together with the state towards common goals. It is, at least in my view, the way more effective states give the impression to have gotten rid of informality. They have not. But they have substantially reduced the role of informal practices in some aspects of life that are crucial to good governance. After all, it makes little sense to measure state, institution, or even individual performances by scoring them against an ideal theoretical model. It is perhaps more beneficial, and realistic, to measure how much better a state performs against other similar states, measuring this empirically. Which country may claim to collect taxes on a hundred percent of taxable incomes? There are countries whose collection is very low and those whose is higher but, the more we near the ideal figure of a hundred percent, the more costly it becomes to locate undeclared income and force people to pay taxes. Control has a price and extensive control a higher one. In the end, each government shall find the balance between how much to spend in tax collection (including positive and negative incentives) and how much tax is brought back into the state budget.
It is important to highlight that there is no lack of informality in the Western world but there seems to be a double standard when referring to informality. Informality may be seen as negative, neutral or even positive depending on where informal practices are noticed. In some areas informality is tacitly acceptable, and accepted, whereas in some other aspects of a society this is stigmatised. This is possibly based on the assumption that regulation, and formalisation, in the Western world has happened to a sufficient extent confined it to practices that are unharmful to the state or not sufficiently relevant to be tackled (Dixit 2007; Helmke and Levitski 2004). As such, informality on the job market, in neighbour relations or in some spheres where trust and personal connections are crucial, are treated as either exceptions or, borrowing from maths, a discrete case that has nothing to see and does not affect the standard functioning of a system. Informality is seen, in many respects, as the cartilage that keeps solid bones together and allows them to function together. Only when informality invades areas that are perceived as being state competencies, or when its presence and influence cannot be denied, then it is treated as something evilto eradicate.
How much of this book is about Ukraine?
I started reflecting about informality during my PhD fieldwork in Ukraine, where I was studying something apparently unrelated: the reaction of a Russian speaking city (Odessa) in attempt to construct a homogeneous Ukrainian identity over the whole territory of the country. Having lived in Ukraine between 2002 and 2006, I became increasingly allergic to corruption reports and analyses claiming that it was endemic to the country and present in all spheres of life. My starting point was that it is normal to have deviant behaviours that need to be corrected. If there are some rules, and a few people do not play by them, then coercion might be used to bring people back onto the right behaviours to use. However, when there is a rule and more than half of a community, or of a country, ignores it then there must be something wrong with the rule, rather than with the country. By force of this, if offering a doctor a little amount of money (1–2 EUR equivalent in local currency) was a widespread practice, would tough control and anti-corruption campaigns hit the weak spots and convince people not to engage in the supply/demand mechanism that alimented these transactions? I doubted it and I doubt it today.
Starting from this assumption, I started exploring some alternative interpretations of informality, the most provoking of which was that hospitals in Ukraine are de facto private (Polese 2006). I suggested that if a public worker's salary is not sufficient to pay for basic living expenses the person should not be considered a full-time public worker (Polese 2009) and that the meaning of a transaction cannot be given in absolute terms but depends on the relationship between the individual and the state. A state should not only be there but, to be respected as a state, should act as a state (Polese 2007) and engage in a balanced give and take relationship with its citizens, rather than just taking.
As in many other cases, my research on informality emerged as a hobby, or a lateral project, beside my main project, that I believed being identity. It soon took most of my time and energy so that I first applied it to my identity research, suggesting that identity formation mechanisms created and alimented by a central government can be renegotiated locally and most of these negotiations are informal. I then turned full time to informal mechanisms and practices thanks to a Marie Curie fellowship that allowed me to collect more material and systematise my findings from 2008 through 2011. In total, I can claim almost a decade of systematic data collection on Ukraine, to which one could add the surveys that I commissioned and the further engagement with the country up to today (2016). The natural consequence of this commitment is that, as one could imagine, most of the material I collected is coming from that part of the world.
This is not to say, however, that Ukraine was the only place where I had the chance to observe informality. Since 2005 I have spent a good amount of time in other countries such as Georgia, Poland, Russia and Turkey (where I also conducted a survey on informality) and, since 2007, I have increased my engagement with development projects in South East Asia. In addition to regularly visiting Vietnam for several weeks a year, I have also worked intensively with Cambodia, China, Myanmar and, to a lesser extent, Indonesia and Laos.
I gradually started seeing some of the patterns I had observed in Ukraine elsewhere. My post-Soviet field experience helped me to better understand other situations, but also showed me that a lot of what I had seen was in no way unique to one single geographical area. There are, of course, practices that belong to a particular place because of historical, geographical or cultural specificities but I increasingly believe to have identified a common denominator to all these transactions.
So, is this a book about Ukraine? I would not claim so. In spite of my devotion to the country I believe there are people who can take much more credit than I can for being Ukrainian experts. I am certainly aware of its evolutions and peculiarities but claiming to be an expert on Ukraine would not be an honest statement, if one compares me to people who have spent their life only in that country. Am I am expert in any other country? I would not claim so either. My Vietnamese language skills are limited and so my knowledge of all underlying facts and events of the countries I work with. I recently found myself, however, at an Irish Aid funded event in central Vietnam where I realized that few people had lived in the country for as long as I had. A fair statement would be that I know these places better than the average person but (much) worse than anyone with a monogamous long-term relationship with the country. What makes this book special and what might make my contribution worth reading, at least in my view, is my capacity to connect events, tendencies and phenomena beyond one single region and the attempts to find a common pattern that could be then theorised for a better understanding of how governance works. I have observed a growing interest in issues of real, informal, participative, local governance and my wish is that this book may help by identifying and understanding some underlying mechanisms so to help improve governance at the local, international and global level.
What is informality?
The word informality has been used to refer, since its identification, to several different, although related, phenomena. Keith Hart was possibly the first scholar to identify, and study, a number of informal economic practices (1973). However, ILO's increased interest in informal labour from 1972 on ignited a variety of debates concentrating on the same issue but from different viewpoints. Initially, informality was seen as a transitional phenomenon that would be wiped out by modernity (Lewis 1959; Geertz 1963). Some seminal works, however, led to reconsider a number of paradigms and discussed them from a different angle. Scott was one of the major frontrunners, initiating both the debate on moral economy (1976) and then looking at how informal economic practices had a major impact on power relationships between peasants and their landlords (1985), which has then been continued in major economic anthropology works (Hann and Harth 2009; Hann 2010). It is in the same period that other social facts started being challenged and scholars discovered the dynamic nature of objects (Thomas 1991) and even money (Parry and Bloch 1989) that changes according to the situation and context. Informal economies became an object of interest also for policy makers and political scientists and the subsequent debates found common issues with the debates on effective governance of post-colonial states (Leff 1964; Palmier 1983; Rose-Ackman 1978).
The nineties, with the opening up of post-socialist spaces, saw a revitalisation of the debates on development, governance and corruption (Harboe 2014, 2015; Humphrey 2002; Millington et al.2005; Jancsics and Javor 2012; Temple and Petrov 2004; Smith and Stenning 2006; Urinbojev and Svensson 2013, 2014, 2014b; Wamsiedel 2013). Critical works, however, challenged what had been the mainstream approach, which is the use of a transitional paradigm using Western experiences to align the non-West with the industrialised world in terms of practices, mechanisms and institutions.
Indeed, most of the critics of this approach have highlighted the questionable approach of installing prefabricated structures and institutions that are allegedly working properly in the West into new countries. By importing know-how and practices, they are confident that the new country will, in the end, work in the same way the model country was. Only after Stieglitz (2002) have economists started questioning the "out of the box" macro approach used indistinctly for diverse realities and only after Gibson-Graham (1996) have critics of the capitalist model seriously engaged in thought-provoking debates suggesting that there are alternatives to the neoliberal capitalist model, which is taken for granted almost everywhere. These voices have been echoed by social scientists showing that diverging ethos (Gill 1998), social acceptability (Van Schendel and Abrahams 2005) or simply limited or different intellectual skills (Morrison 2007) prevent policies and reform to be accepted, understood or implemented into as a whole package, sometimes suggesting the use of institutions, procedures and practices that do not exist, or do not function properly, in the West itself (Carothers 2002).
This critical view has also inspiredednew terminology in development studies, as the term "developing countries" is now sometimes skeptically looked at. The very word "transition" seems to imply that a country or a sector is inevitably moving from point A (pre-transition) to point B, where point B means being like a certain model (or country). In other words, it sounds that it is all clear and pre-determined that we know, from the very beginning, where a country should head and we exclude all possible variations and different paths of development that are not the one we can imagine. This also challenges the expression "international standards", being unclear what standards one should refer to. Germany is not France or Japan but the three are often seen as models for development. They have little in common but the fact to be considered is their success stories along with a relatively high degree of satisfaction of their citizens.
The influence of informality has been found to be wider than generally acknowledged. Inspired by Granovetter's works (1984), informality is seen now as embedded in social phenomena (Gudman 2001; Yelcin-Hackman 2014) but also in other spheres of action of a state (Helmke and Levitsky 2004, Isaacs 2011, 2013, Ledeneva 1998, 2013; Misztal 2001, Morris 2011, 2012, 2013). They have also grown partially away from the original understanding of a mostly monetary logic (Williams 2005) and they permeate both societies in the Global South and North. In addition, whilst class and social status may influence the way informal practices are conceived and perpetuated, the studies have in common that they exist among all segments of a society, with many similarities between both winners and losers of transitions (Morris 2012, Morris and Polese 2014b).
Informality here is not considered as something merely economic or monetary but affecting potentially all aspects of a society, of a state and its governance. This brings into question the difference between informal and criminal activities. It becomes more complex since the boundary between what is criminal and what is not may be very subjective so two reflections are called upon. The first is the matrix legal/illegal licit/illicit by Van Schendel and Abrahams (2005) where licit can be considered as socially acceptable and is a sub-portion of illegal. There are things that are illegal by local criminal codes but people do not perceive them as "bad" (Fogarty 2005; Rasagayam 2011), they are socially acceptable and, thus licit. There are even things that are perfectly legal but a population, or part of it, does not accept them, at least in the short term, as licit.
Table 1:The relationship between legality and licitness (adapted from Van Schendel and Abrahams 2005)
Legal
Illegal
Licit
State and society norms overlap
The society allows something that is forbidden by state institutions or codes
Illicit
The state does not punish actions that are stigmatised socially (by one or more communities)
State and society norms overlap
There is a second notion that I have based on direct and indirect harmfulness (Polese 2009). Murder harms a society, since it deprives it of its labour force, but also harms directly a fellow human being. Trafficking, kidnapping and theft, follow the same logic. However, fiscal noncompliance harms first the state and then, only indirectly, fellow citizens. A lower fiscal income either puts more pressure on honest tax payers or lowers the amount available for the population of a state. Non-transparent hiring practices rarely harm a single person directly (unless this person was given a job and then a last minute change took it from him), but indirectly harms the society by placing incompetent people in key positions.
Table 2:Direct (affecting fellow citizens), indirect (affecting a society) harmfulness and legality
Direct harm (mostly illicit)
Indirect harm (might be licit)
Illegal
Murder, trafficking, heavy drug dealing, ethnic violence (might be licit in some cases)
Fiscal fraud, nepotism, ethnic or religious discrimination
Legal
Use legal action against unaware people to extort money or property; clauses written in a smaller font at the end of a contract
Laws that favour one (ethnic, religious) group over others (are licit for the favoured ones)
The above matrix can be used to circumscribe the scope of this book and suggest what kind of informality we will be looking at, that is the area of activities that are not regulated by the state (Routh 2011) but are either socially acceptable or do not harm directly a fellow human being. This definition excludes, to a certain extent, activities by organised criminal organisations and activities punished by both criminal codes and people's moral standards in most of the world.
Main themes of this book:(Over) Regulation and informality
The study of informality, at least as it is intended here, is meant to engage with the attitude of two main actors: the first is called an overarching entity (this is generally a state but can be a company or any other entity claiming to regulate the relationship between two or more of its subordinates); the second is a community of people whose life, or some aspects of it, is regulated by this entity. The formal overarching entity is the one delivering instructions and creating the formal role that regulates a system. Since informality is the way not to pass through that entity, and the formal rules that it has established to regulate a system, absence of a formal overarching entity means that everything is regulated informally. In such case, it makes little sense speaking of informality since, de facto, everything is informal.
Lack of formal rules does not mean that there are no rules. In a primordial, or pre-state, society there are rather clear rules and norms that regulate the behaviour or a population in a given territory. Rules are not necessarily accepted by everyone but, in a small society, social control may be sufficient to ensure compliance, coercion and punishment of deviant actors. When the community enlarges some members might not agree with all the rules and act by sub-mechanisms and rules that are either tolerated or repressed by the community. The conflict or, better, friction between them becomes more evident when formal institutions step in. An overarching entity is then established, institutions are created and mechanisms initiated to regulate the society and this goes in parallel with the de-personification of a community. Informal mechanisms and unwritten rules may result effective only as long as the community to which they are applied is "personal". I refer to the fact that the community is small enough to know who does what and individually-tailored pressure can be applied to ensure compliance (this includes the use of community solidarity that is the pressure to behave correctly to the rest of your kin). In both cases individual desire and the good of the community might not overlap and some mediation is needed. Individuals are prone to think short-term and for their personal gain. The role of community chiefs, or its ground rules, is to ensure that individual desires and needs are mediated to come up with rules that benefit the whole community (or society). This is relatively a straightforward thing in a small community, where feedback mechanisms are direct, relationships are personal and communication between decision makers and decision takers happens with little distortion (Ledeneva 2006, 2013; North 1990).
In larger systems, decision makers are selected (directly or indirectly) and they (claim to) represent the society. However, even in the best cases, the feedback mechanisms are usually slow and not always direct. In addition, critics of representative democracies have pointed out the possibility to have a minority deciding for the majority or lack of overlap between the ruling class and the desires of the population (De Mesquita 2005). If the first party in a country gathers 30 or 40% of the votes, that is does not represent even half of the country and a new law adopted by 51% of the parliament is potentially leaving out 49% of the electorate's needs, which may mean several tens of million. Finally, the effects of the adopted policy will not necessarily benefit the majority of a population (think, among others, of a case where a policy was informed by wrong assessments or assumptions). If we consider that these people might belong to the same geographical area, or segment of the population, one can imagine that the gap between the state and the people may be quite significant for several reasons. One is that there is a gap between what the people expect to get and what they get in reality. This is endemic to all societies since individual desires, needs and expectations are different from what the state provides. In addition, there may also be a gap between what the state promises and delivers, a thing that can be linked to the gap between what the state symbolically represents and provides and what gives in reality. Informality grows and establishes itself in areas where the state cannot or does not want to rule (Polese et al. 2014; Davies and Polese 2015).
In the course of history, a constant, if not growing, amount of people have been trying to take advantage, collectively or at the level of in-group status, of a given position so to bring material or symbolic advantages to themselves, their family or their kin. In a pre-state world, this could be limited only by a similar force opposing and limiting the power of this or this group or family. Once the state stepped in trying to regulate, competition between the state and its citizens became tougher. The state would impose a set of rules that everyone living on its territory should abide to. Entrepreneurs would look for unregulated territories or ways of playing with the rules to maximise their gain. This search will continue, until a new rule is created to regulate, and possibly limit, the influence of this or that actor in one or another sphere of life of the state. Informality may be seen as originating with one or more people or groups of people, and stems from a natural human desire to maximize one's advantages. If there's no overarching entity regulating the relations between people, groups of people and groups of interests then most of the rules are informal.
However, as soon as an overarching entity starts regulating a geographical territory or a certain sphere of life (think of entities not as powerful as the state but that have a say in human interaction, such as trade organisations acting over a given territory, tax collection organisations in the Ottoman empire, privately operating but endorsed by the ruler, see Cizakca 2011) formal and informal rule enter competition. As Hart (2009) suggested for economic phenomena, informality becomes relevant politically only once there is a state, or at least an overarching entity, trying to regulate relationships and interactions between people.
The incapacity of a system of institutions to get rid of informalityin totois thus due to at least two parallel phenomenon. One is the impossibility to regulate, once and for all, every single aspect and sphere of life of a state. Informality is the space between two formal rules and actually the ligament bringing together two or more parts of a state's formal rules, making possible to conciliate or to solve issues due to the rigidity of a system. States that are less capable to assert their control might have formal rules more distant and allow for more informality while states with good decision-making mechanisms might have enough rules to leave a little room for subjective choices. However, even the most repressive, or controlling, state can't possibly regulate people's life from dawn to dusk, or forecast all possible reactions and attitudes of their people to every single instruction. This is partly why black markets may be regarded as safety valves, unlawful habits are sometimes tolerated or ignored and their repression concentrates on some aspects while neglecting others.
