The informal sector elephant

Different analysts have used the term ''informal sector'' to mean different things. A data set with 2,200 small enterprises chosen using random procedures in seven countries makes it possible to test the relationships between different measures. The analysis finds only limited parallels between definitions based on size, on registration, on conformity to fiscal and other regulations, and on degrees of modernization. Wide variations appear from one country to another. The term may be appropriate for examination of individual countries, especially if the analyst defines it precisely; but its use in multicountry analysis is fraught with difficulties. Copyright (C) 1996 Elsevier Science Ltd