T16P08 - Towards a New Agenda for Sustainable Development for 2030: New Proposals for Old Challenges

Topic : Sustainable Development and Policy

Panel Chair : Johnathan Ordonez - johnathan.ordonez@unimi.it

Panel Second Chair : Giulia Bazzan - giulia.bazzan@unimi.it

Panel Third Chair : Angelica Puricelli - angelica.puricelli@gmail.com

Objectives and Scientific Relevance of the panel

Call for papers

Session 1 SESSION 1

Dynamics of the Informal Economy in Viet Nam: A Pillar of Development?

Thuong Nguyen - thuong.nguyen@anu.edu.au - Crawford School of Public Policy, Australian National University - Australia

The informal economy remains a persistent feature in many economies throughout the world. However, knowledge and understanding about this sector remain controversial. Empirical studies show that informal economy, a major source of income and livelihood for billions of people, has played an important role in poverty reduction and economic development in developing countries. Yet, informal economy imposes significant costs on participants. Workers in the informal economy are trapped in poverty and the poverty incidence is higher than for those working in the formal sector as they are poorly renumerated, more vulnerable and unsecured. Under this lens, informal economy is viewed as the catalyst for socio-economic inequality and poverty. Furthermore, informal firms are operating inefficiently at very small scale, which creates hindrances for long-term economic development.


Given the above-mentioned dilemma, the central question for academics, development practitioners, and policymakers is: would it be over optimistic to consider informal economy as a potentially rational and efficient opportunity for development in the developing world?


My research, designed as an evidence-based and policy-oriented study, aims to contextualize and provide an in-depth analysis of the role and dynamics of the informal economy in Vietnam. By exploring opportunities and challenges, potentials and determinants for its effective performance, and its nexus with other actors in the national economy, the paper provides scientific evidence to inform policy makers and contributing to the theoretical debates on informal economy and optimal policy choice. The study aims to answer the question what are the policy choice that mitigate the pitfalls of the informal economy while maximizing its potentials to fuel economic development? How can these costs and benefits be reconciled?


The study employs combined quantitative and qualitative methods. The distribution effects and inequality issues will be examined through econometric and simulation techniques using longitudinal data of the Vietnam Labour Force Surveys and Vietnam Household Living Standard Surveys. The qualitative method including observation and interviews will be conducted post quantitative study to supplement and strengthen the findings derived from large-scale quantitative analysis.

Preliminary findings reveal that the informal economy represents a significant part of the Vietnam’s economy. It accounts for an average of 20 per cent of GDP. The share of informal employment has been consistently increased slightly and remains at high level, approximately 60 percent during the last decade. It is worth noting that informal economy served as the buffer against unemployment in the periods of financial crisis as it helped absorb majority of redundant workers. While incomes from informal activities contributed a considerable share of the total income of poor households, there is rising concern about socio-economic inequality and vulnerability associated with informal economy.


The research will make both theoretical and empirical contributions to the literature. Theoretically, it will add another case study on this topic in the developing world and enable comparative analysis at the regional level. Practically, the study’s findings have policy implications for planning and actions towards fighting against social and economic inequality and poverty reduction, which are the key goals of the Sustainable Development Goals.

A study of the feasibility to achieve the Sustainable Development Goals for poverty alleviation from the perspective of decentralisation arrangements: A case of local governments in Mexico

Flor Gerardou - flor.gerardou@gmail.com - Leeds Trinity University - United Kingdom

Rosario Michel-Villarreal - rmichelv@lincoln.ac.uk - Lincoln International Business School - United Kingdom

The Sustainable Development Goals (SDGs) for poverty are to end poverty in all its forms across the world by 2030. Local governments are important agents in the implementation of pro-poor  policies and the capacity of local governments is moulded by the intergovernmental relations in their own country. Decentralisation and fiscal decentralisation in particular, is a vehicle for achieving the SDGs. Using fiscal decentralisation as a theoretical focus, this research evaluates the feasibility of achieving the poverty alleviation goal by a) analysing the trend of key poverty indicators at the local level in Mexico; b) exploring possible lineal dependence between key poverty indicators and fiscal decentralisation arrangement at the local level and c) examining key fiscal arrangements. The expected findings are that urgent action to strengthen local government finance is required and that changes in specific fiscal arrangements can be used as a roadmap for setting targets at the local level. 


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