To informality and beyond: Informal economic resilience and the case for social cohesion

Informal economies play a vital role in socio-economic development by providing livelihoods and services especially to people who are often overlooked in the formal policy approaches. This chapter discusses the complexities of informal economies for promoting inclusive economic development, appreciating their resilience and improving the capacity of informal actors, networks, and communities in the local and regional contexts. The discussion benefits from Flavia Martinelli’s works by emphasizing the value of social services for socio-economic development and territorial cohesion. Her advocacy for considering social inclusion and social cohesion in local and regional development policies is acknowledged as an avenue for further research in reducing inequalities and improving service provision. The chapter challenges the orthodox economic views of informal economic actors as a detriment to the invisible hand of the markets, and highlights the redistributive role that informal actors play in local and regional development with their ability to innovate, reinvent, and adapt to changing socio-economic conditions. The nexus between informal economy, social cohesion and place governance is useful in addressing community needs by providing essential support mechanisms, creating new opportunities, fostering social relations, and enhancing socio-economic development. The chapter concludes that informal economic resilience offers opportunities for informal actors and policymakers to enhance the individual and collective well-being in a society.