Abstract

"The Cinderella of Underdevelopment, Or, How The Informal Sector Redrew the Map of Labor"

Sergio Infante, Yale University (sergio.infante@yale.edu)

This paper examines 1970s-era debates over unemployment and the “informal sector” at the International Labor Organization (ILO). The informal sector referred to a grab-bag of promising and unpromising economic activities. It also troubled the line between workers and firms: such small-scale endeavors as street hawking and garbage reprocessing could be understood as being either businesses or forms of employment. The sector was, as one commentator said, “the Cinderella of underdevelopment.” Being ambiguous, the concept could be put to many political and social scientific purposes. The first part of this paper examines the contours of this debate at universities and the ILO. I argue that leftwing radicals and non-economists used the informal sector concept to gain access to the international bureaucracy and to question the prestige that development economics enjoyed among policymakers. The second part broadens out to consider how the U.S. government and the World Bank distorted the ILO’s signal concepts, “basic needs” and the “informal sector,” following what should have been the agency’s crowning glory: the 1976 World Employment Conference. I close with a section on the Self-Employed Women’s Association of India (SEWA), which had strong ties to the ILO. Against the backdrop of lackluster growth rates, cutbacks to overseas aid, and a crisis of confidence among development economists, the women’s partnerships that emerged during the 1970s carried the promise of a bottom-up development to countries, such as India, where top-down approaches had come up against diminishing returns. In the case of SEWA, a grassroots organization, the brightline between employee and businessperson was unimportant: workers belonged to SEWA’s union arm, entrepreneurs belonged to one of SEWA’s many cooperatives, and many women belonged to both.