Explaining the Informal Economy: an Exploratory Evaluation of Competing Perspectives

Oyelade

et al. 2020

IJSSP

PurposeThe index case of COVID-19 in Nigeria was reported on 27 February 2020. Subsequently, the exponential increase in cases has brought about the partial and total lockdown of cities, the closure of all schools and the shutdown of government offices in order to curtail the spread of COVID-19. COVID-19 and its subsequent drastic curtailment policies have implications on vulnerable groups, especially, informal workers who constitute about 70% of the active working population in Nigeria. This reflective discourse critically engages the plight of informal workers in the context of the COVID-19 pandemic in Nigeria.Design/methodology/approachThe research was guided by the epistemology of pandemic interpretationism. It engages contextual reflections of the plight of economically vulnerable informal workers in Nigeria. Data were collected from secondary sources while rapid case studies were conducted with ten informal workers in Lagos and Ibadan. Afterwards, data were contextually analysed.FindingsEconomically vulnerable informal workers in Nigeria have contextually interpreted COVID-19 as an elite disease, imported into Nigeria by the wealthy. In addition, the mass population views COVID-19 containment measures such as lockdowns, movement restrictions and stay-at-home orders as elitist policies, which are aimed at protecting the wealthy and frustrating the poor and economically vulnerable who live on the fringes of poverty. Many informal workers have slipped below the poverty line while struggling to supply livelihood needs, as they were unable to earn daily income and cannot access palliatives. Consequently, they are of the opinion that “Hunger Virus is deadlier than Corona Virus”.Originality/valueThis paper is a contextual reflection on the plight of economically vulnerable informal workers during the COVID-19 pandemic lockdown and movement restrictions in Nigeria. It presents pandemic interpretationism as an epistemological guide and reflectively examines the poverty impact of COVID-19 on the Nigerian informal sector via contextual analyses of secondary data and rapid case studies. The paper uncovers various COVID-19 livelihood experiences and the responses of the informal workers; furthermore, it provides policy recommendations.

Section: Methodsmentioning

confidence: 99%

Contextual reflections on COVID-19 and informal workers in Nigeria

Oyelade

et al. 2020

IJSSP

“…As such, it calls for greater levels of state intervention. In recent years evaluations of the cross-national variations in the size of the informal economy have supported the state under-intervention thesis, revealing that the informal economy is smaller in countries with higher taxes and levels of state expenditure, and lower levels of inequality (Williams, 2014b, c, 2015a, b, c; Williams and Horodnic, 2016; Williams and Martinez-Perez, 2014). Here, therefore, and to test whether a similar finding is valid in relation to cross-national variations in tax morale, we can evaluate the following hypotheses.…”

Section: Tax Morale: a Review Of The Literature And Hypotheses Developmentmentioning

confidence: 97%

Evaluating the individual- and country-level variations in tax morale

Williams

Krasniqi

2017

JES

Self Cite

PurposeRecently, a small but burgeoning literature has argued that tax non-compliance cannot be fully explained using the conventional rational economic actor approach which views non-compliance as occurring when the pay-off is greater than the expected cost of being caught and punished. Instead, a social actor approach has emerged which views tax non-compliance as higher when 'tax morale', defined as the intrinsic motivation to pay taxes, is low. To advance this social actor model, the aim of this paper is to evaluate the individual and national heterogeneity in tax morale, which is crucial if tax compliance is to be improved. MethodologyTo do this, we report data from the 2010 Life in Transition Survey (LiTS) on tax morale in 35 Eurasian countries. FindingsLogit econometric analysis reveals on the one hand, that there is higher tax morale among middle-aged, married, home owners with children, with a university degree and employed, and on the other hand, that there is higher tax morale in more developed countries with stronger legal systems and less corruption, and higher levels of state intervention in the form of both taxation and expenditure. Research implications2 Rather than continue with the rational actor approach, this paper reveals how an emergent social actor approach can help to more fully explain tax non-compliance and results in a different policy approach focused upon changing country-level economic and social conditions associated with low tax morale and thus non-compliance. Practical implicationsThese results display the specific populations with low tax morale which need targeting when seeking to tackle tax non-compliance. Originality/valueThis paper provides a new way of explaining and tackling tax non-compliance in Eurasian countries.

“…In contrast, the political economy perspective explains the expansion of non-compliance as a product of inadequate state regulation and intervention. This perspective considers that the informal economy is "an integral component of the new down-sizing, subcontracting and outsourcing practices emerging under deregulated global capitalism" (Williams, 2015). Undeclared work provides the economy with a non-institutional method of flexibilization of production and cost reduction.…”

Section: περIληψηmentioning

confidence: 99%

Social security compliance in times of crisis. Evaluating the factors for non-compliance in the HORECA sectors in Greece

Koumarianos

Kapsalis

Avgeris³

2021

SCAD

This article studies the impact of the economic recession, labor market deregulation and social security reforms on the level of non-compliance in Greece. It examines the theoretical framework of non-compliance in post-industrial economies, as well as the design of social security systems in preventing contribution evasion. To assess the evolution of non-compliance, especially under conditions of crisis, we examine the results of the INE-GSEE survey on the HORECA sector. According toour research findings, employers follow non-compliant practices in order to maximize their profits, taking advantage of the precariousness of workers, whereas workers accept or collude with non-compliance as a survival tactic within a highly competitive environment. Non-compliance in the Greek labour market appears to be a multi-factor phenomenon that cannot be explained exclusively in terms of a unique perspective.