The Investment Climate for the Informal Economy: A Case of Durban, South Africa
This paper was prepared as a background paper to the Background Paper for the World Development Report 2005. It considers the investment climate for the informal economy by investigating the South African case. We review recent theoretical developments in understanding the informal economy, pointing to the increasing consensus that the economy needs to be viewed in its entirety with a formal and informal end. We then give a brief statistical overview of the informal economy in South Africa. Durban, South Africa’s third largest city, has been proactive in seeking out ways of creatively supporting informal enterprises, as an economic function, not merely as a welfare alleviation function. Durban’s approach over time is briefly reviewed.
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