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Citation Information

Type Working Paper
Title State Failures and the Rise of the Informal Sector in West Africa: Case studies of Benin, Burkina Faso and Senegal
Publication (Day/Month/Year) 2011
URL http://eadi.org/gc2011/mbaye-618.pdf
One of the dominant features of African economies is the overwhelming share of the informal sector, both in terms of contribution to GDP and to overall employment, but also its increasing significance in those countries. Several attempts have been made to understand the determinants of informality in Africa, emphasizing mainly on socio-demographic and business climate variables. In this paper we examine the institutional environments surrounding the informal sector in West Africa. We provide an assessment of the institutional environment of informality in West Africa, emphasizing that cumbersome regulations, bad governance, and weak enforcement contribute to the spread of the informal sector. Moreover, the political and religious influence of certain influential actors promotes growth in the informal sector.

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