Informality and Growth in Madagascar: Republic of Madagascar
Selected Issues Papers, June 5, 2023
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- Informality and Growth in Madagascar: Republic of Madagascar
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Bibliographic details
- Authors: Ghislain Afavi, Coffi Agossou, Mokhtar Benlamine, Ialy Rasoamanana, Nombàna Razafinisoa, Veronique Salins
- Published: June 5, 2023
- Series: Selected Issues Papers
- DOI: https://doi.org/10.5089/9798400244827.018
Summary
- Chapter investigates the link between informality and growth in Madagascar and aims for a better understanding of the informal sector.
- Provides an analysis of the characteristics of informal production units and informal employment.
- Publication date: June 5, 2023.
- Pages: 17.
- DOI: https://doi.org/10.5089/9798400244827.018
- Series: Selected Issues Paper No. 2023/036
- ISBN: 9798400244827
Key findings
- Informality is a key feature of economic activity in Madagascar.
- Informal production units are the main driver of employment with a deep concentration around self-employment.
- Informality is associated with a lack of awareness of administrative procedures and the complexity and cost of tax and regulatory measures.
- The informal sector’s Total Factor Productivity (TFP) growth is more stable and higher on average than the formal sector TFP.
Characteristics of informal production units and employment
- Informal production units dominate employment.
- Employment in the informal sector is deeply concentrated around self-employment.
- Administrative awareness deficits among participants in informal activity are a central characteristic.
- Tax and regulatory complexity and costs are linked to the decision to remain informal.
Productivity analysis
- The informal sector’s Total Factor Productivity (TFP) growth:
- Is more stable than formal sector TFP growth.
- Is higher on average than formal sector TFP.
Policy implications (implied by findings)
- Reducing the complexity and cost of tax and regulatory measures could address drivers of informality.
- Improving awareness of administrative procedures may encourage formalization.
- Policies targeting the productivity dynamics of informal production units could leverage the sector’s relatively stable and higher-average TFP growth.
Source: Informality and Growth in Madagascar: Republic of Madagascar, Selected Issues Papers (June 5, 2023).
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