Stiglitz and cynicism

It is estimated that an Indian manager spends 14% of their time on red tape and there are significant issues around corruption at all levels. This is the case elsewhere in the BRIC and Next 11 economies and it requires urgent attention. As Joseph Stiglitz has made clear, “these days, most economists are sceptical about the ability of centralised bureaucracies to plan and deliver.”[i]

 

---

[i] Joseph Stiglitz, Globalisation and its discontents.

 

World Underneath … Castells & Portes

Appearing in The Informal Economy (1989) this article: World Underneath: The Origins, Dynamics, and Effects of the Informal Economy – has a number of insights worth consideration.

The informal economy simultaneouslyencompasses flexibility and exploitation, productivity and abuse, aggressive entrepreneurs and defenceless workers, libertarianism and greediness. And, above all, disenfranchisement of institutionalised labour.

The Informal market is a common sense notion whose social boundaries cannot be captured by a strict definition without closing the debate prematurely.

The informal economy is not a euphemism for poverty. It is a specific form of relationships of production, while poverty is an attribute linked to the process of distribution.

On the other hand, the basic distinction between formal and informal activities proper does not hinge on the character of the final product, but on the manner in which it is produced and exchanged.

The impact of the I E on productivity is contradictory. On the one hand, the productivity of labour in the IE tends to be lower because of the use of less advanced production technologies … on the other hand the productivity of capital in the IE is higher because of a dramatic reduction in overheads caused by the bureaucratic structure of large-scale organisations.