Perceptions of Costs and Benefits of Informal-Formal Linkages : Market and Street Vendors in Accra, Ghana

This paper investigates how linkages between informal and formal economic segments benefit or impose costs upon informal workers, based on self-reported relationships of market and street vendors in Accra with the formal economy and its institutions and a World Bank study of informal household enterprises providing. Data from 15 focus groups and 150 vendors from Accra city center and non-central locations are analyzed in terms of vendors’ relationships to the value chain, non-governmental institutions, the government, and the macroeconomy. The latter two exert a strong, mostly negative influence on informal operators, offset to some extent by support from membership-based organizations and NGOs. Access to loans from microfinance institutions is viewed both as a positive and negative influence on vendors’ work. Despite few visible direct linkages between informal operators and formal firms, they are somewhat mutually interdependent as retailers and suppliers in the value chain. To take advantage of potential informal-formal synergies, government and other actors need to become more proactive toward facilitating, rather than denying, infrastructure, support services and adequate space for informal traders