Towards a new model of the Philippine political economy III

Posted: March 28, 2015 in Uncategorized

bong mendoza's blog

The informal economic sector

The informal sector includes economic activities that are quite similar to those undertaken within the formal economic sphere.[1] One can also acquire legal goods and services such as food products, clothing, and footwear within the informal sector.  The legal nature of the goods and services and the voluntary nature of the exchanges and transfers are shared features of formal and informal economic activity.  However, informal economic activity is technically illegal since informal entrepreneurs usually do not register with state authorities or pay income taxes and relevant registration fees and licenses.  Yet such illegality, according to De Soto (1989), is not antisocial in intent, like drug trafficking, theft, kidnapping, and murder.  If informals were to live, trade, manufacture, transport, or consume, they may have to do so illegally.  State regulations are often complex and cumbersome and are too difficult or expensive to comply with.  Thus, informals

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