Remaining informal: Exploring the determinants of formalisation within urban markets
This policy brief reports findings from a study of marketers in Liberia, where the state has attempted to formally register marketers under the Liberia Marketing Association (LMA).
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Liu and Xu Policy brief May 2024.pdf
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- Markets in cities across sub-Saharan Africa experience serve as major hubs for economic activity across socio-economic classes, but formalising markets have faced major challenges. This policy brief reports findings from a study of marketers in Liberia, where the state has attempted to formally register marketers under the Liberia Marketing Association (LMA).
- We find major benefits to formalisation, including assignment to permanent selling locations with shelter, access to conflict resolution and adjudication, and protection from police harassment and crime.
- However, informal marketers value business activity over these benefits. Informal marketers also value pro-sociality, as they often rely on neighbouring sellers for coordination and assistance. Results from a vignette experiment suggest informal marketers are most likely to formalise if formalised marketers are deemed more trustworthy.
- The findings highlight the need to consider social networks and group-based policies to encourage informal marketers' formalisation.