Sustainable Development and the Informal Sector: An Uneasy Relationship?

Abstract

This article offers a preliminary analysis of the influence of informal activities on the sustainability of development, as well as their policy and planning implications. Most sustainable development policies are directed toward the formal sector—activities that are regulated by the state. The role of informal activities has not been recognized, although the literature shows that informal activities are pervasive and influence significantly socioeconomic and spatial development in both developed and developing countries. The article presents the principal characteristics of informal activities based on a review of the international literature, then examines how informal activities impinge on the three criteria/objectives of sustainability: environmental protection, social equity, and economic efficiency. Various examples of informal activities are used, and their influence on sustainable development is sketched. Finally, the implications of this analysis for sustainable development policy making and planning are examined. Potential avenues to overcome the problems identified are outlined.