The Economics of Informality in The ERF Region - Economic Research Forum (ERF)

The Economics of Informality in The ERF Region

August 31,2014

The recent Arab Awakening is seen by many analysts to partially reflect economic exclusion. One form of exclusion is informality of both workers and firms. Workers in the informal sector tend to endure low job security, no social insurance, low income and adverse working conditions. Similarly, firms in this sector, while enjoying the ease of entry and exit and escaping costly formal regulations, are deprived from having access to formal credit, contracts and export opportunities. In short, the informal sector is characterized by low productivity-low income trap.

The above problem is exacerbated by the observation that the informal sector is relatively large. According to the World Bank, a typical MENA country produces one-third of its GDP and employs 67 percent of its labor force informally. Moreover, MENA has the highest share of firms that start informal (25 percent) and the longest operating period without formalization (4 years) among developing regions. The trend of informality has also been increasing in recent years, making this topic an important.
In an attempt to understand the trends, causes and dynamics (entry, exit) of informality in the MENA region, ERF launched a call for proposals in the context of the 14th round of the ERF-GDN Regional Research Compe­tition. ERF received 12 proposals, out of which the refereeing committee selected 8 projects for funding. The draft papers of these projects will be presented and discussed in this workshop.

Speakers, moderators and discussants included Hanan Nazier, Racha Ramadan, Reham Rizk, Hala Abou Ali, Rana Hendy (Economic Research Forum), Heba Handoussa (ENID and ERF), Kabbashi M. Suliman, Tareq Sadeq, Amirah El-Haddad (Cairo University), Alia El Mahdi (Cairo University and ERF), Fatma El Hamidi (University of Pittsburgh), Sultan Abou Ali (Zagazig University and ERF), Abeer Elshennawy, Mahmoud El Gamal, Mohamed El Komi, Mona Said, Tamer El Meehy, Layla Iskandar, and Ziad Bahaa EL-Din.

Research Associates

Hanan Nazier

Associate professor Faculty of Economics and Political Science, Cairo University

Research Fellows

Racha Ramadan

Associate Professor, Faculty of Economics and Political Sciences, Cairo University

Research Associates

Reham Rizk

Assistant Professor, British University in Egypt

Research Fellows

Hala Abou-Ali

Professor, Cairo University

Research Associates

Rana Hendy

Assistant Professor, Doha Institute for Graduate Studies, Qatar University

Research Fellows

Heba Handoussa

Managing Director, Egypt Network for Integrated Development


Kabbashi Suliman

University of Khartoum

Tareq Sadeq

Research Fellows

Amirah El-Haddad

Senior Economist/Researcher, Deutsches Institut für Entwicklungspolitik/ German Development Institute

Policy Affiliates

Alia El Mahdi

Dean, Faculty of Economics and Political Science, Cairo University

Research Fellows

Fatma El-Hamidi

Visiting Lecturer, Economics Department, University of Pittsburgh

Senior Associates

Sultan Abou-Ali

Professor of Economics, Zagazig University


Abeer Elshennawy

Associate Professor at the American University in Cairo

Research Fellows

Mohamed El Komi

Assistant Professor, Economics Department, American University in Cairo,

Research Fellows

Mona Said

Assistant Professor of Economics, Economics Department, The American University in Cairo

Tamer El Meehy

Layla Iskandar

Senior Associates

Ziad Bahaa Eldin

Director, Egyptian Initiative for the Prevention of Corruption