Evaluating the relationship between the formal and informal economy in Ghana : a case study of Koforidua in the Eastern Region.

This thesis re-evaluates the relationship between formal and informal work in third world cities. Until now, informal work has been theorised either as a residue (modernisation), by-product of contemporary capitalism conducted out of economic necessity (structuralism) or an alternative to formal work chosen due to either an overburdensome state (neo-liberalism) or for social, redistributive, resistance or identity reasons (post-structuralism). Keith Hart was the first scholar to use the concept of the "informal sector", which he employed to describe a large segment of the economy of Ghana during the 1970s. Following Hart's seminal work, there has been a continuous debate about the nature of the relationship between the informal and formal sector. This thesis returns to the birthplace of the concept and through a survey of the contemporary informal economy in' Koforidua it critically re-evaluates these various competing theories of the relationship between formal and informal work. Reporting on data from a study of 80 households and three key institutions in Koforidua in Ghana, the study identifies the multifarious relationships between formal and informal work in Ghana. The major finding is that even though each and every theoretical perspective may be applicable to specific types of informal work, no one theory captures the varied character and multiple meanings of the informal economy as a whole in Ghana. As a consequence, this study asserts that a more far-reaching understanding of the multifaceted and diverse character of the informal economy will only be achieved by using all the theoretical perspectives. The outcome is a call for a rethinking of how to explain the relationship between formal and informal work and for an appreciation of the multiple meanings of informal work in different contexts. This thesis concludes by calling for a review of the potential wider applicability of these findings.