Stability and development

Informal economies in fragile environments: exploring the new frontier of complex realities

European Centre for Development Policy Management (ECDPM)

The interconnection between the informal economy and the provision of security and justice is highly complex and dynamic, as highlighted in the Interactive Brainstorm on ‘Informal Economies in Fragile Environments: Exploring the links to justice and security’ of the Knowledge Platform Security & Rule of Law. Frauke de Weijer of ECDPM outlines what researchers and policy-makers should do to make sense of the wealth of evidence on the topic.


Reality, the new frontier

One of the main purposes of the Brainstorm on ‘Informal Economies In Fragile Environments’ was to shed light on the deep interconnections between the informal economy and the provision of security and justice. It looked at how the informal economy cannot be reduced to a purely economic phenomenon, but that attention needs to be paid to the linkages between the informal economy and the way security and justice is (or is not) provided. It also discussed how failure to connect the dots between the informal economy and the dynamics of security and justice provision can lead to unintended consequences.

The brainstorm session produced an overwhelming amount of evidence on all sorts of highly dynamic interactions. One of the conclusions of the session was that every situation is different; the interplay between formal and informal regulations, criminal and lawful activities, the degree of political elite predation on the poor, the degree of state capture of informal organizations or the hold that these organizations have on the state, the scope for collective action in the informal arena, and so forth, vary widely. Even contexts which on the surface seem similar, such as the contexts in which transport organizations operate in Uganda and Rwanda, can have completely different security and justice outcomes due to their specific socio-political circumstances. Furthermore, these interactions are highly dynamic. Changes in the cost of security provision caused by external events such as the war on terror can have deep implications at the local level. Once benevolent informal security providing organizations can turn against the very people they used to protect.

How can we make sense of this wealth of diversity?

Somewhere during this meeting, I started to feel sorry for policy-makers. How can we even start to think about suitable and feasible strategies for engaging with the informal economy in fragile contexts? What do we need to understand about a given context, as a minimum, in order to identify effective interventions? How can we become better equipped at designing appropriate interventions in these vastly different contexts? Will we ever be able to sufficiently understand  the knock-on effects of any intervention? And if the answer to this last question is ‘no’ or ‘hardly’, where does it leave us?

Where this leaves us is at a new frontier – the frontier of complex realities. A frontier where we really take reality as the starting point. It is actually good to feel overwhelmed, to not immediately pull an intervention out of our hat, but to recognize the immensity of the problems we are facing. We need to start with reality, as complex and overwhelming as it is.

Making sense of reality: research can help

Policy-makers are currently stuck. They can no longer follow best practice, as it is no longer fashionable, but they are given no further guidance than ‘context matters’. 

Comparative research can help us identify patterns. It can help us identify which dimensions of the informal economy and security and justice are particularly relevant for us to look at. Most interestingly, it can help us decipher whether or not there are regularities in the trajectories that informal security and justice providers tend to be on, and which trends and critical junctures influence these trajectories. Such research will help us to gain insight into the key factors that we need to understand.

It would help tremendously, however, if such comparative research was more comparable than it is now. Academics tend to focus on their particular field and use their own conceptual frameworks. Granted, this is how academia works. But imagine if academics could come to some sort of shared conceptual framework. The brief by the Conflict Research Unit of Clingendael views the informal economy as ‘an issue with maximum policy importance and political salience with minimal conceptual clarity and coherence’. More conceptual clarity and coherence would greatly increase the comparability of research and could serve as the basis for more evidenced-based policy making.

Another helpful step would be to start developing a political economy assessment framework for the informal economy that could serve as a bridge between research and policy making. This framework could build on our deepening insight into the key factors that we need to understand better.

However, analysis alone will not get us there. We need to recognize that we do not control all of the factors, and unintended consequences are bound to happen. Policy-makers and those holding the purse strings need to understand that the key lies in good preparation,using good analysis through a multidimensional lens, strong consultation with other policy-makers through multi-sectoral scenario planning (for example, a systematized way of scanning for unintended consequences), and the flexibility to adapt programming accordingly.

This is the new frontier, and I am excited to see what lies at the other side of it.

Photo credit: Rwanda 2013 / HarvestPlus via Flickr

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