Re-Theorizing the Informal Economy in Western Nations: Some Lessons from Rural England

For much of the 20 th century, the informal economy in advanced western nations was depicted as a leftover from an earlier mode of production and disappearing from view. In recent decades, however, with the recognition that it persists and is even growing, it has been variously re-theorized as either a direct by-product of late capitalism, an alternative to formal work or a complement to the formal economy. To evaluate critically the validity of these rival theorizations of the relationship between formal and informal work in western economies and beyond, evidence from a study of 350 households in rural England is here reported. The finding is that although each and every theorization is wholly valid in relation to particular populations engaged in specific types of informal work, no one theorization fully captures the diverse and multiple relationships between formal and informal work. Here, in consequence, it is contended that only by using all of the existing theorizations will a finer-grained and more comprehensive understanding of the complex and multifarious relationships between formal and informal work be achieved. The result is a call to move beyond the conventional simplistic belief that the formal economy is everywhere replacing the informal economy and for greater recognition of the multifarious relations between formal and informal work in contemporary economies.