COMPETING PERSPECTIVES ON THE LATIN-AMERICAN INFORMAL SECTOR

The informal sector has gained increasing attention among social scientists and policy-makers concerned with third world development. The authors trace the demographic and economic processes that set the framework for the emergence of this phenomenon in Latin America and examine competing perspectives on its character and consequences. Two such perspectives offer polar views of the informal economy as either a manifestation of the problem of poverty or as a potential solution to it. Conceptual and empirical anomalies associated with each view have given rise to a third, intermediate position. Measurements strategies and empirical estimates of informal activity associated with each theoretical perspective are presented. The significance of these differences for policies targeted on urban labor absorption and economic development is highlighted.