Given the current focus of international development policy on pro-poor growth and poverty
reduction, the role of the informal sector in the process of economic development is again at the top
of the research and policy agenda. A key question is if pro-poor growth policies have to address the
informal sector specifically and in any particular way or if the informal sector evolves like the rest of
the economy and that therefore good growth policies are also good informal sector policies.
Therefore, it is of crucial importance to understand the linkages – in quality and magnitude –
between the informal sector and the rest of the economy. We argue that linkages between the formal
and informal sector can exist on a macro as well as on a micro level. Empirically, we analyze both
levels for urban areas in Burkina Faso using households as an observation unit. We show that in this
country macro or inter-household linkages between the formal and informal economy are rather
weak and that it is the performance of the whole economy in general which matters most for the
informal sector. In contrast, micro or intra-household linkages between informal and formal labour
supply and earnings seem more important and their understanding seems extremely useful when
thinking about pro-poor growth strategies.