Dimensions of resilience in developing countries: informality, solidarities and carework

Noteworthy is the author’s expertise spanning over the past 45 years, since he first surveyed the informal sector in Tunisia. He has been working for the ancestor of the French Institute for Research in Development (IRD), wherein he will become later on a Director for the social sciences department. He also participated in several major international organisations such as the OECD, the ILO and WIEGO, bringing in the viewpoint of a labour economist committed to National Accounts as well as a scientist open-minded towards sociology and anthropology. The 224 page book is a must read, which brings in the major references and robust stylised facts stemming from very rich data collection. A landmark addressing the political economy of development that sheds light upon the extensive topic of informality linked with two other concepts such as transfers (‘solidarities’) and care work especially provided by women. These three forms of resilience are the three major sources of earnings for the poor populations.

Unsurprisingly, the main part that covers more than half the book is devoted to informality and includes three chapters (110 pages). Many policymakers mix the concept of informality, which are legal but non-registered activities with underground and criminal activities that are not legal. Almost half a century ago, Africa was the cradle of ‘informality’, a concept that was individualbased (Hart, [1971] 1973) in Ghana and establishment- or enterprise-based (ILO, 1972) in Kenya. Three approaches address the informal economy: (i) the dualist approach (Lewis, 1954) makes it a separate entity from the formal economy; (ii) the structuralist approach (Castells and Portes, 1989) holds that it is subordinated to the formal economy; and (iii) the legalist approach (De Soto, 1989) contends that it is a rational reaction of (small) businesses to overregulation. In addition, the two-tier segmentation of the informal sector (Fields, 1990) is mentioned, but it is unknown to which approach it might be linked. Segmentation theory (Doeringer & Piore, 1971) is not cited. International Statistical Definitions follow later on. According to the ILO (1993), the informal sector includes legal businesses of own-account workers and informal employers, which belong to individual unincorporated enterprises of the household sector, are non-registered (or its employees), with a size under five permanent paid employees, providing some production for the market. The ILO (2003) usually defines informal employment by the non-payment of social contribution for all jobs carried out in both informal and formal enterprises by workers and especially employees. ILO allows both definitions of informal sector and informal employment to be compatible, although the latter is not completely inclusive of the former wherein some formally employed workers can be included (ILO, 2018), whereas Charmes’ estimates strictly comply with the definitions of both concepts. As for estimates, Charmes presented a first worldwide benchmark of 18 countries in 1990 for the OECD (Turnham, Salomé & Swartz 1990). It was updated in the ILO-WIEGO Women and Men in the Informal Economy (2002, 2013, 2018), Charmes’ own data base containing 85 countries in 2018. These estimates, unweighted averages by region and countries, are usefully included in the book alongside those from ILOSTAT and the ILO Women and Men in the Informal Economy (2018). North Africa and Sub-Saharan Africa enjoy best coverage; whereas least coverage is provided for transition countries. Most EU countries are missing and EU transition countries come from disparate sources. Two major characteristics are that employment in the informal economy is negatively related to GDP per capita. Trend has dramatically increased during (2007–2008) and after the Great Recession, highlighting the contra cyclical role of the informal economy.

As for magnitude, the contribution to the GDP of the informal sector can be measured in as much as these unincorporated enterprises belong only to the household institutional sector in the System of National Accounts (SNA). This is not true as for informal employment outside the informal sector, which includes (i) the informal workers of the formal sector that are not usually identified in the SNA, whereas (ii) the domestic workers and (iii) the subsistence producers for own final use are also components of the household sector. Noteworthy is the data collection on secondary job (i.e. pluri-activity) in 16 countries (13 from Sub-Saharan and North Africa). Charmes rightly points out that MIMIC models promoted by Schneider does neither disaggregate nor avoid double counting, thus magnifying the share of the shadow economy in GDP. Two main policies address populations operating in the informal economy in order to foster poverty alleviation. One consists in provision of income-generating activities using value-chain analyses; the other one supports the promotion of microenterprises. Three main pillars consist in spreading social protection, enhancing skills, and provisioning micro-finance. At the macroeconomic level, taxation is the first concern of the States. In addition, small businesses are often facing the payment of briberies, at least as high as taxes that they should pay. Two major NGOs organise the informal workers: SEWA (1974) and WIEGO (1997). Established in India as a set of cooperative and then as a trade union, SEWA struggled towards the adoption of the Convention on Home-Based Workers in 2008 and the Convention on Domestic Workers in 2011. WIEGO holds that informal workers should be included into formal schemes, rather than covered by small schemes especially tailored for them.

Part II, really brief indeed (20 pages), is restricted to just one chapter devoted to solidarities mostly in sub-Saharan Africa. The focus is on the redistributive issue more than the reciprocity issue, although the latter is complementary to the former, in accordance with Polanyi et al. (1957) analytical framework that is not cited. Mauss (1925) coined reciprocity, a system of rights and obligations that founds social cohesion, paving the way to the analysis of economic behaviour based on transfers (Boulding, 1972). As an amount of inter-household flows of transfers, social capital is difficult to measure. However, it proves a powerful shock absorber during crises. In addition, private household transfers play an important role in the income redistribution, thus offsetting the lack of public social protection. Charmes provides precious data collection for nine sub-Saharan African countries in late 1990s and early 2000s, as well as recent updates especially for Ethiopia.

Part III comprises three chapters addressing unpaid care work that is not taken into account in the compilation of GDP. Charmes insists on the new definition of work and employment (ILO, 2013), according to which the care economy includes all services produced for own final consumption by the households and highlights the hidden contribution of women to wealth creation. Time-use surveys gauge the time devoted by women (and men) to the household chores. Three categories of work are distinguished: (i) paid work or work for the production of goods and services that can be marketed is an SNA activity; (ii) unpaid work or work not produced for the market is an extended SNA satellite account; and (iii) activities that are not accounted for within the SNA. Employment is much narrower a concept that captures only paid work (i). In line with the aforementioned definition of employment, domestic goods and personal services for own final use are not included, which applies to unpaid care work of contributing family workers or primary activities such as fetching water and firewood. As for production, such goods and services for final use or use for others can be measured by GDP within the boundaries of SNA. Women participating in the labour market experience a twofold work-time schedule and their total workload usually exceeds that of men by more than one third, the maxima being reached in the MENA region. The fact that time devoted by women to the care economy declines is not due to a better share of chores among households but to their increasing involvement in the labour market. Most reliable data on time use are based on diaries enumerating all activities over a 24-hour lapse time and international classifications of time-use activities (11/12 major categories) rather than on stylised questionnaires over a reference period of a week. Actually, four broad categories: (i) paid work; (ii) unpaid intra household domestic and care services; (iii) unpaid care services for other households and volunteering; (iv) other (six) individual activities such as learning, socialising and community participation, leisure, mass media, personal care and maintenance as well as travel and transport; the latter being included when it applies to paid and unpaid work. The unpaid care economy is made of activities belonging to the (ii) and (iii) categories. Time-use surveys include 76 countries and 133 surveys (years) by region, among which 56 developing countries. Europe accounts for 15 countries and 34 surveys, 13 transition countries account for 14 surveys, two North American countries concentrate 19 surveys and three other developed countries account for nine surveys. Changes occur over the lifecycle. The general pattern for 32 countries is an increase from youth to adulthood and a decline from adulthood to old age for female unpaid care work (with few exceptions); whereas there is an increase on time spent – at a much lower level – from youth to adulthood and also from adulthood to old age for male unpaid care work in most countries.