Robust policies for an uncertain world

This report argues that informality in developing countries deprives about 60 per cent of the workers in these countries of proper income and career opportunities. At the same time, high informality rates limit government resources, which could be used productively, and depress the growth of aggregate demand, hampering a country’s successful integration into the world economy. This means that successful formalization strategies would not only improve the working conditions of large segments of the labour market in those countries, they would also constitute a signifi cant engine of further growth, of both the individual country and the world economy. At the same time, the study argues that the integration of a country into the world economy – if properly managed – can help informal workers by improving their living standards and giving them access to decent working conditions. Integration into world markets and tackling informal employment should thus be considered complementary, as only formal jobs allow a country to benefi t fully from trade openness.