Housing Policy in Developing Countries : The Importance of the Informal Economy
All countries have a formal economy and an informal economy. But, on average, in developing countries the relative size of the informal sector is considerably larger than in developed countries. This paper argues that this has important implication...
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2017
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| Online Access: | http://documents.worldbank.org/curated/en/573081468149693974/Housing-policy-in-developing-countries-the-importance-of-the-informal-economy http://hdl.handle.net/10986/28043 |
| Summary: | All countries have a formal economy and
an informal economy. But, on average, in developing
countries the relative size of the informal sector is
considerably larger than in developed countries. This paper
argues that this has important implications for housing
policy in developing countries. That most poor households
derive their income from informal employment effectively
precludes income-contingent transfers as a method of
redistribution. Also, holding fixed real economic activity,
the larger is the relative size of the informal sector, the
lower is fiscal capacity, and the more distortionary is
government provision of a given level of goods and services,
which restricts the desirable scale and scope of government
policy. For the same reasons, housing policies that have
proven successful in developed countries may not be
successful when employed in developing countries. |
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