A Peculiar Economy: Antipoverty Policy, the Informal Sector, and the Latin American Imagination, 1970–90

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 Latin American 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 examine how attempts to make small-scale economic activity "visible" were met with repeated accusations that research on the "arcane" and "shadowy" informal realm was pseudoscientific, mythical, or bogus.