Small Firms, the Informal Sector, and the Devil's Deal

By J. Tendler. 2002

143 citations recorded by the source corpus.

These days, everybody loves small firms and their clusters–donors large and small, governments and nongovernment organizations, left and right. Some characterize small firms (SFs) as the proper subject of social policy and safety nets, and house SF programs in departments of social welfare or labor. Others see SFs as the stuff of “serious” economic development, and focus on upgrading their collective efficiency, productivity, and market access. Unfortunately, the combination of the social-policy view with the inevitable local politics of SFs generates a brew that inadvertently undermines not only the upgrading agenda, but certain aspects of the social-policy agenda itself–namely, better environmental, labor, and health-and-safety practices and protections. This article explains how this happens, and shows that things don’t always need to turn out that way, especially if donors and others pay attention to the histories lying behind today’s thriving SF clusters in developing countries.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/485514e2b9511978a31235f0bce4ea8cc7f1848d

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  1. Christopher Heady
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  3. A. Joshi

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