Informal institutions and social regulation of informal economic activities: a theoretical literature review

Abstract

This article presents a theoretical literature review on the role of informal institutions in the social regulation of informal economic activities. Contrary to dominant theses that assume the unorganized nature of informal economic activities, the existing literature on this issue shows that informal activities operate according to well-defined organizational logics derived from the informal institutions of each society. Based on a systematic literature review, we were able to identify four forms of social organization characterizing the informal economy: organizational forms for the purpose of controlling and monitoring informal economic activity, organizational forms for financial purposes, organizational forms for social purposes, and organizational forms for political and union purposes.These forms of social organization function through a set of informal mechanisms of social regulation, namely trust, norms of reciprocity and reputation, informal social networks, and informal sanctions.

Keywords: Informal Institutions, Social Regulation, Informal Economy.

Classification JEL: B15, D02, O17

Paper type: Theoretical Research