The essential features of the different types of economic activity are summarized in the following Table 1.
Table 1
Essential Features of Different Types of Economic Activity
| Type of economic activity | Object of transaction | Nature of transaction | Tax status | Receipts/contracts | Transacts with ROTW |
| Formal | Legal goods & services | Voluntary exchange | Paying | Yes | Yes |
| Informal | Legal goods & services | Voluntary exchange | Non-paying | No | Yes |
| Criminal | Illegal/exclusive goods and services | Voluntary and involuntary “exchange” | Non-paying | No | Yes |
| War-related | Illegal/exclusive goods and service | Voluntary and involuntary “exchange” | Non-paying | No/Yes | Yes |
Interactions between the economic sectors
It is the state that determines which economic activities are criminal and which ones are not. It does so through a body of laws commonly known as the penal code. In several instances, agents of the state ‘stretch’ the law to such an extent that some patently criminal activity can be de-criminalized. In this regard, we can cite…
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