Informal sector dynamics in times of fragile growth: The case of Madagascar

Julia Vaillant, Michael Grimm, Jann Lay and François Roubaud

The European Journal of Development Research, 2014, vol. 26, issue 4, 437-455

Abstract: This article examines the dynamics of the informal sector in Madagascar during the 1995–2004 period, which was characterized by sustained growth that ended due to a major political crisis. As conventionally assumed by simple dualistic models, the informal sector indeed fulfils a labor-absorbing function in times of crisis. However, informal business creation was also a major trend both during macroeconomic growth and during crisis and recovery. Growth in the informal sector was mostly extensive, with little job creation or capital accumulation. Although such a situation would be consistent with the existence of poverty traps, estimated marginal returns to capital are decreasing, which tends to reject this hypothesis.

Date: 2014
References: Add references at CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
http://www.palgrave-journals.com/ejdr/journal/v26/n4/pdf/ejdr201429a.pdf Link to full text PDF (application/pdf)
http://www.palgrave-journals.com/ejdr/journal/v26/n4/full/ejdr201429a.html Link to full text HTML (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Informal Sector Dynamics in Times of Fragile Growth: the Case of Madagascar (2014)
Working Paper: Informal Sector Dynamics In Times Of Fragile Growth: The Case Of Madagascar (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:eurjdr:v:26:y:2014:i:4:p:437-455

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/41287/PS2

Access Statistics for this article

The European Journal of Development Research is currently edited by Spencer Henson and Natalia Lorenzoni

More articles in The European Journal of Development Research from Palgrave Macmillan, European Association of Development Research and Training Institutes (EADI) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().