Paper short abstract:

This paper argues that developing a critical understanding of how informal economies are governed necessitates interrogating the class dynamics in which informal economic activity takes place.

Paper long abstract:

The global ubiquity of informal economic highlights the need to integrate it more fully into longstanding conceptualizations of the political economy of the state, capital and labour. Drawing on examples from across the Global South, this paper takes up a central part of this task, contending that class dynamics must inform analysis of how informal economies are governed. It first presents a critical analysis of possible understandings of informality and class, with a particular reference to the work of Marx, Guy Standing and Hernando de Soto, emphasizing the tension inherent in the duality of understanding informal workers as a class that is united by a shared position at least partially outside of the legal and regulatory structures of the state and, simultaneously, existing within class structures defined by forms of accumulation and dispossession both within the informal economy and in linkages with the formal economy. It subsequently examines what insights class dynamics offer into patterns of integration into, or exclusion from, local, national and global economies that are defined for facilitated by forms of governance. Finally, it considers what an emphasis on class reveals about the possibilities for and limitations to efforts to promote forms of inclusion, exploring how class creates opportunities for mobilization around common interests and, where divisions exist, risks of fragmentation. In doing so, it outlines how governance must aim to simultaneously address economic, political and legal marginalization if it is to meaningfully confront vulnerability in the informal economy.