Jürg Schneider

The Informal Sector

In Novem­ber 2025, Bri­tish anthro­po­lo­gist Keith Hart died in Paris. He was 81 years old. Hart had many inte­rests, but sin­ce it was him who intro­du­ced the dimen­si­on of eco­no­mic “infor­ma­li­ty” into deve­lo­p­ment poli­cy deba­tes, my com­men­ta­ry is a tri­bu­te to his ori­gi­nal con­tri­bu­ti­on, loo­king back six­ty years when a field cal­led “deve­lo­p­ment eco­no­mics” was still in its for­ma­ti­ve years.

In Novem­ber 2025, Bri­tish anthro­po­lo­gist Keith Hart died in Paris. He was 81 years old.

Hart had many inte­rests, but sin­ce it was him who intro­du­ced the dimen­si­on of eco­no­mic “infor­ma­li­ty” into deve­lo­p­ment poli­cy deba­tes, my com­men­ta­ry is a tri­bu­te to his ori­gi­nal con­tri­bu­ti­on, loo­king back six­ty years when a field cal­led “deve­lo­p­ment eco­no­mics” was still in its for­ma­ti­ve years.

1965, Gha­na: Keith Hart, Ph.D. stu­dent of Cam­bridge Uni­ver­si­ty, starts his PhD field rese­arch on rural-urban migra­ti­on. He spends two years, most­ly in Accra, and gets amp­le oppor­tu­ni­ties to stu­dy the eco­no­my of poor urban hou­se­holds.

1971, Sus­sex. Back in the U.K., Hart par­ti­ci­pa­tes at a deve­lo­p­ment con­fe­rence on “Urban unem­ployment in Afri­ca” at the “Insti­tu­te of Deve­lo­p­ment Stu­dies”. The­se were times when migra­ti­on to cities and urban unem­ployment was a big topic among deve­lo­p­ment eco­no­mists.

At the con­fe­rence, Hart deli­vers a paper on “Urban employment and infor­mal inco­me oppor­tu­ni­ties”, based on evi­dence from Gha­na – instru­men­tal for the stu­dy of the “infor­mal sec­tor”. His aim is essen­ti­al­ly to show that the urban poor are not unem­ployed – to the con­tra­ry, they were con­stant­ly loo­king for infor­mal inco­me oppor­tu­ni­ties.

The importance of this seems evi­dent now, but had remain­ed in the shadow of a then domi­nant focus on “unem­ployment”. Hart never concei­ved of the infor­mal eco­no­mic acti­vi­ties as a “sec­tor” – like manu­fac­tu­ring or agri­cul­tu­re. He insi­sted that for­mal and infor­mal dimen­si­ons of an eco­no­my always have to be stu­di­ed tog­e­ther.

Today, “infor­ma­li­ty” and the infor­mal sphe­re of the eco­no­my are still very pre­sent in our deba­tes, most recent­ly after the Covid-19-shocks that cau­sed a dra­stic reduc­tion of for­mal employment in many eco­no­mies.

I have seen two ways, in which the con­cept is put to work

On the one hand, the infor­mal eco­no­my con­tri­bu­tes to the liveli­hoods of the poor – working with the resour­ces at your dis­po­sal and respon­ding to the dearth of employment in the for­mal eco­no­my. This dimen­si­on abso­lut­e­ly needs to enter into the frame­works of deve­lo­p­ment poli­ci­es, and inde­ed it has infor­med many of tho­se poli­ci­es over the last deca­des.

On the other hand, given the lack of regu­la­ti­on, social secu­ri­ty, work­place safe­ty in the infor­mal eco­no­my, poli­cy-makers often cal­led for regu­la­ti­on, effec­tively a “for­ma­lizati­on” of the infor­mal sphe­re. This can refer to busi­ness per­mits, taxes, safe­ty at the work place, access to cre­dit, and many other things.

Keith Hart has the last word.

“I had no ambi­ti­on to coin a concept…I meant my eth­no­gra­phy to per­sua­de deve­lo­p­ment eco­no­mists to aban­don the unem­ployment model. More was going on in the grass­roots eco­no­my than they ima­gi­ned.”

Refe­ren­ces

Hart, K.

1973. Infor­mal inco­me oppor­tu­ni­ties and urban employment. Jour­nal of Modern Afri­can Stu­dies. Pp. 61–89.

2022. Self in the World. Con­nec­ting Life’s Extre­mes. New York: Berg­hahn Books. Pp. 98–100.

“I had no ambi­ti­on to coin a concept…I meant my eth­no­gra­phy to per­sua­de deve­lo­p­ment eco­no­mists to aban­don the unem­ployment model. More was going on in the grass­roots eco­no­my than they ima­gi­ned.”
Keith Hart
Bri­tish anthro­po­lo­gist