Dr. Racky Balde

Essays on informal versus formal economy choices

Year: 2021

Pierre Mohnen and Théophile Azomahou


The informal economy is largely dominated by vulnerable and poor workers. Evidence also suggests that a large informal economy negatively affects formal firms’ innovation and creates a loss of resources for governments. Whereas these have led to an enormous number of policies or reforms aimed at reducing the size of the informal economy, there is no conclusive evidence of their success. Some policies opt for a stricter stance towards informality. While emerging voices advocate for an increase in formalisation advantages. Much of the evidence in the literature is limited to South America or Asia. Sub-Saharan Africa has its specificities, and policies adopted in other regions may not entirely apply and produce similar results. Careful attention needs to be paid to the potential consequences of each approach because most of the population in Sub-Saharan Africa have their livelihoods in the informal economy. The dissertation’s main objective is to examine the main determinants of the informal economy to inform policymakers on the best approach to tackle it.

Selected publications by Racky Balde