Informality and Structural Transformation in Egypt, Iraq and Jordan : A Framework for Assessing Policy Responses in the MENA Region

Informality is not a new phenomenon but today, in face of the multiplication of domestic and global shocks, the vulnerabilities associated with informal work and businesses are an undisputable hurdle to economic resilience and more inclusive and equal societies. Yet, certain policy measures implemented with the intention of addressing the consequences of crises on vulnerable groups in the society – groups that include informal workers and businesses – can unintentionally induce more informality, in a vicious cycle that makes formalisation and resilience even more difficult to reach. The report Informality and Structural Transformation in the Middle East and North Africa outlines a framework for assessing the impact of economic and social policies on informality. The framework was developed jointly by the ILO, OECD and UNDP, and is thought as a hands-on instrument, allowing policy makers to foresee early on in the policymaking cycles the effects diverse economic and social policies could have on the informal economy. This tool adds to the vast literature on informality. Understanding the expected impact of different policies on informality can help governments to identify measures that support their key objectives, e.g. helping firms in financial distress or expanding social protection, without altering motivations and incentives to formalisation.