Contemporary writing on North African borderlands invokes the idea of a general, unregulated porosity through which small-scale informal traders of food or textiles move alongside drug smugglers and terrorists. I challenge that conception, demonstrating that the vast majority of smuggling activity is in fact highly regulated through a dense network of informal institutions that determine the costs, quantity, and types of goods that can pass through certain nodes, typically segmenting licit from illicit goods.While informal, the institutions regulating this trade are largely impersonal and contain third-party enforcement, hence providing a direct empirical challenge to common characterisations of informal institutions in political science. I argue that revisiting the characteristics associated with informal institutions, and understanding them as contingent on their political environment, can provide a new starting point for studying institutions, the politics of informality, state capacity, and the regulation of illegal economies.

The concept of formalization has long underpinned policy interventions and measures intended to connect informal entities with state institutions or formal economic structures. However, despite the policy enthusiasm, the outcomes of formalization policies have frequently been disappointing. This article argues that this disconnect lies in the concept of formalization itself and that common approaches to formalization are often rooted in three conceptual fallacies: a binary distinction between formal and informal economic actors, a lack of appreciation for the diversity of informal economic actors and the idea that ‘becoming’ formal necessarily spurs positive externalities. These conceptual confusions pay insufficient attention to contextual complexity and the political and social dynamics that shape informality in a given context and they are frequently rooted in the practicalities and power structures that shape knowledge creation in this area. This article demonstrates this through case studies of tax registration and property titling. Thus, it argues for a new research agenda on formalization that challenges both its conventional conceptual foundations and the practices of research that engage with it.

In low- and middle-income countries, informal workers are particularly vulnerable to the health and economic effects of the Covid-19 pandemic and often neglected by policy responses. At the same time, the crisis is rapidly changing the ways that states engage with informal workers. We argue that the relationships between informal workers and states – and the politics of creating and accessing these linkages – are a critical and frequently overlooked part of the politics of the pandemic. Both pre-existing structural disconnection from the state—embodied, for example, through limited access to health infrastructure—and state attempts to build new connections, including through cash transfer programmes for informal workers, have a profound impact on the effectiveness and reach of state crisis responses. Without considering the varied and dynamic nature of the linkages between states and informal workers we cannot understand the heterogeneous health and economic impacts of the pandemic, state capacity to respond to the crisis, or institutional change in the context of crisis.

SummaryMotivationIn recent years, governments in low‐income countries have increasingly introduced taxes on mobile money transfers. These are often explicitly promoted as a way of taxing informal economic activity, but critics have noted their potential negative impact on lower‐income groups and specifically those in the informal sector. Yet there is virtually no evidence base on the effects of mobile money taxes on informal workers.PurposeThis article assesses how informal workers in Accra, Ghana, use mobile money and how they perceive Ghana's Electronic Transfer Levy (E‐levy), introduced in May 2022. This provides a particularly interesting case study to explore the equity implications of the tax, as the policy was explicitly justified as a way of taxing the informal economy but also includes measures to limit the tax burden on lower‐income groups.Methods and approachThe article uses data from a survey of 2,700 self‐employed informal workers in the Accra Metropolitan Assembly to capture citizen perceptions of the policy and to examine the likely impact of the E‐levy on informal workers with reference to equity.FindingsOverall, our results suggest that the E‐levy is highly regressive. Further, we show that most informal workers disapprove of the E‐levy, reflecting not just concerns about its equity impacts, but also disappointment with the government's performance.Policy implicationsOur findings suggest that taxes on digital financial services should be reconsidered from an equity perspective. While some policy measures, including those undertaken in Ghana, can protect low‐income earners, they are often insufficient to counteract overall regressive impacts. Where they are implemented, social spending from the revenue from these taxes should target low‐income populations in the informal economy, while governments should focus on building trust among informal workers with regard to revenue raising and spending.