Promoting a sustainable policy framework for the transition to the formal economy
For many countries, the transition from the informal to the formal economy is a major challenge, given the size of the informal economy, the lack of fiscal space and infrastructure, and the need for capacity building. But it is not an impossible task, even in low-income countries: some countries have a proven record of developing effective legal and policy frameworks for formalization, while many others have recently embarked on similar paths or are starting to consider the possibility of doing so. In this context, there is considerable demand from policymakers with evidence-based practical knowledge about what works and what does not work in facilitating the transition, and how to go about it. Following Recommendation 204 concerning the transition from the informal to the formal economy, the ILO's Member States need to design coherent and integrated strategies to facilitate the transition. Among other things, it is important that they take into account the diversity of characteristics, circumstances and needs of workers and economic units in the informal economy, as well as specific national circumstances, legislation, policies, practices and priorities. Because many different strategies can be adopted to facilitate the transition, national stakeholders need to ensure coherence and coordination across a broad range of policy areas, as well as cooperation between the relevant bodies and authorities (tax agencies, social security institutions, labour inspectorates, customs authorities, migration bodies and employment services, among others, depending on national circumstances). Finally, countries should ensure that targets and indicators of formalization are included in national development strategies and plans, as well as in poverty-reduction strategies and budgets, taking into account, where appropriate, the role of different levels of government.
The course is intended for labour analysts; policymakers from ministries of labour and other line ministries (including but not limited to social protection, planning, agriculture and finance); representatives of workers' and employers' organizations working in this field.
** Please note that the e-course described in this page is not free. **