Vice in the informal economy

This research combines two theoretical traditions-Hirschman's (1970) theory of exit, voice, and loyalty and the theory of social movements-to understand when and why informal entrepreneurs will attempt to influence formal institutions. The decision about whether or not to attempt influence of formal institutions can be thought of as a choice between exiting (e.g., where informal entrepreneurs either join the formal economy or leave the informal economy altogether), voice (e.g., where informal entrepreneurs do try to influence formal intuitions), and loyalty (e.g., where informal entrepreneurs accommodate themselves to newly changed formal institutions). This research focuses on the choice of voice for the informal entrepreneur. In order to understand voice, this research uses the tenants of social movement theory to understand what structural factors allow for social movements, creating an optimal environment for voice to occur. Currently, exit, voice, and loyalty focus on individual choices and only in the formal economy. This research applies this theoretical framework to a new populations, the informal economy, to better understand how informal actors make the choice to voice and challenge institutional frameworks. Therefore, this research applies the exit, voice, and loyalty framework to a case study in Kumasi, Ghana. The case follows the emergence of a social movement organization, the Kejetia Petty Traders' Association, and the choice of voice for informal, petty traders. This case study uses 220 semistructured interviews and surveys of important stakeholders in the Kejetia Marketplace to explore the choice of voice for informal entrepreneurs. Kumasi Ghana was selected due to its inclusive institutions, history supporting freedom of expression without repression, and a long history of social movements for traders in the marketplace. This dissertation uses mixed methods of ethnographic interviews and semistructured surveys to investigate who voiced, and why they chose voice rather than exit or loyalty. Overall, gender was found to be the most important factor in determining if a petty trader in Kejetia would choose to voice or not. Human capital in terms of education was not significantly related with voice; however, previous experience was negatively associated with choosing voice. Growth orientation was also not related to voice, even though most members of the social movement organization stated that they chose voice in order grow their business. These findings illuminated the importance of gender and its associated roles in Ghanaian culture. The perceptions of males versus females and their associated duties in the family and society are strong factors influencing whether or not a petty trader would choose voice or not. This has strong implications for policymakers hoping to encourage formalization in emerging markets, which tend to be predominantly females. It also impacts those targeting female entrepreneurs in microcredit and other development initiatives.