In this article, researchers at the International Institute of Social Studies (ISS), Andrea Floridi, Binyam Afewerk Demena and Natascha Wagner investigate the empirical literature on the impact of formalization interventions such as simplifying registration procedures to increasing law enforcement.
The find that there is some indication that policies increasing the benefits after formalization are associated with increased formalization rates but the evidence base is thin suggesting that further piloting and experimenting is needed to achieve large-scale formalization of the informal economy.
'Shedding light on the shadows of informality: A meta-analysis of formalization interventions targeted at informal firms' Labour Economics
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