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Paper short abstract:

This paper offers a comparative analysis of how institutional change transforms the governance of informal economies, exploring how democratization has led to partial, if flawed, attempts to support informality in Cape Town while de-democratization has furthered marginalization in Kampala.

Paper long abstract:

The importance of institutions in shaping the governance of informal economies is receiving belated attention from both scholars and policymakers. A particularly significant theoretical insight that has emerged from this work is that competitive electoral processes allow the urban poor to secure vital forms of livelihood support, from favourable policies and enforcement patterns to protection arrangements, by leveraging their position as a crucial urban voting bloc. Based on extensive fieldwork in Cape Town, South Africa and Kampala, Uganda, this paper argues that while political rights provided by democratic systems of governance are indeed crucial for protecting the interests of individuals engaged in informal economic activity, social and economic rights that offer concrete livelihood protections are equally vital for providing security against the vagaries and capriciousness of politics. It illustrates how the democratic transformation that accompanied the end of apartheid in South Africa has shifted the governance of informality in Cape Town away from exclusion and repression towards early forms of recognition and support, but suggests that the neglect of social and economic rights means that the underlying causes of informality remain unaddressed. It contrasts this experience with that of Kampala, which has, conversely, undergone a more recent experience of de-democratization, resulting in increased repression and vulnerability in the informal economy. Both cases demonstrate the importance of democratic systems in facilitating inclusive development, but also highlight how these must be paired with broader forms of social and economic empowerment for the urban poor if they are to realize their potential.