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http://ssrn.com/abstract=1636515
 
 

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Informal-Sector Entrepreneurs, Development and Formal Law: A Functional Understanding of Business Law


Claire Moore Dickerson


Tulane University - Law School

July 8, 2010

American Journal of Comparative Law, Vol. 59, No. 1, 2011

Abstract:     
The informal sector represents 40-60% of Sub-Saharan Africa’s GDP, and employs as much as 93% of non-agricultural workers in Sub-Saharan Africa. Given the importance of this sector, and given the understanding that formal law does not penetrate easily or predictably there, classic business law alone cannot create for informal-sector nano-entrepreneurs an environment comparable to that enjoyed by a business person in the global North.

Reform of business law must focus on functionality: how to assist informal-sector businesses by increasing the predictability of transactions while limiting government abuse, all in connection with the formation, operation, and, ultimately, termination of businesses. The attack is two-pronged. Formal law can constrain formal-sector actors, such as some landlords transacting with informal-sector businesses, and mandate that formal-sector actors provide pro-business realities that Northern businesses enjoy, including sanitary work environments. With respect to the informal-sector nano-entrepreneurs, who tend not to be directly affected by formal business laws, but who do have a legal a quasi-traditional legal regime that affects businesses, formal laws that reinforce existing business norms will be the most effective in supporting North-style predictability. Further, a modern legal study focused on the formal sector suggests that, in Sub-Saharan Africa where the legal regimes tend to be highly centralized, formal law can be most effective for nano-entrepreneurs if it assists them in coordinating and, ultimately, in creating or negotiating for basic protections taken for granted by businesses in the global North.

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Date posted: July 9, 2010  

Suggested Citation

Dickerson, Claire Moore, Informal-Sector Entrepreneurs, Development and Formal Law: A Functional Understanding of Business Law (July 8, 2010). American Journal of Comparative Law, Vol. 59, No. 1, 2011. Available at SSRN: http://ssrn.com/abstract=1636515

Contact Information

Claire Moore Dickerson (Contact Author)
Tulane University - Law School ( email )
6329 Freret Street
New Orleans, LA 70118
United States
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