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ers employed by households, to ‘disguised wageworkers’ employed by sweatshops in productionchains — are also included as important constituentsof the informal economy.Not surprisingly, any discussion of the informaleconomy would include ‘small’ enterprises notregulated, as well as employment relationshipsthat are not legally recognised and that leavemuch to be desired (in terms of providing socialprotection and reduction of vulnerability). Wemay note here that issues relating to employability,productivity and flexibility of the labourforce and to their upward movement along theinformal-formal continuum are the subject ofChapter 3 of this report on Labour Rights. Thethrust of this discussion, therefore, will maintainthe focus on informal businesses and enterpriseswhich, for the purpose of analysis, include ownaccountoperators. We examine legal measuresthat include the presence of, and equitable accessto, effective judicial, political and economic,market and non-market institutions. These, wehave observed, make it easier for micro and smallenterprises to start up and grow in a manner thatallows them to adopt ‘high road’ strategies toenhance efficiency and productivity and providedecent jobs for its employees.Poverty and Informal EconomyIncreasing poverty spurs growth of the informaleconomy. In turn, the informal economy promoteseconomic growth, serving to reduce poverty. Theproblem here is that any reduction in poverty isinefficient, and lacks legal recognition, regulationand protection. Studies of countries that havesuccessfully delivered pro-poor growth suggestthat even though economic growth is extremelyimportant, it is unable, by itself, to address theeventual disparity in poverty reduction. It is necessaryto address the nature of inequalities whileaccounting for the resulting change, if any, ininequality from this kind of economic growth. 32Information and data on the informal economyin developing countries is sketchy since very fewcountries undertake survey of employment andengagement in the informal economy on a regularbasis. Even though nearly 75 percent of the poorpeople in developing countries live in rural areasand engage in informal economic activities relatedto agriculture, many countries exclude agriculturefrom their measurement of the informal economy.33An informal sector survey carried out by ILOin 1995 found that 41 percent of the workerswere in the informal economy because theycould not find any other work (including thosewho became involved following their retrenchment),30 percent because their family neededadditional income, 10 percent because of thefreedom to determine their hours or place ofwork, and 9 percent because of good incomeopportunities. 34 Although not all poor are inthe informal economy, almost all those who areinformal are poor. Urban areas of most developingcountries expose the contemporaneous existenceof informal workers’ shacks with the formal workers’more affluent homes. In the name of economicdevelopment and enforcement of propertyrights, the former are first to be destroyed by governmenteven though the services provided to theformal settlements by them are perfectly legal.Informal EnterprisesDespite the fact that the self-employed andemployers face many barriers to setting up andoperating informal enterprises, they account for70 percent of the jobs in sub-Saharan Africa andabout 60 percent in the other developing regions.In India, nearly 93 percent of the workforce is inthe self-organised informal sector, with nearly 10211