Abstract
Governance of the informal economy, especially of the informal marketplaces has attracted considerable attention in the recent decades. This paper contributes to this literature by arguing that conception of the informal economy is an empirical reality is shaped by the formal governance structure. The development of informal governance institutions for governance of informal marketplaces and their role in local governance are shaped by the design of formal institutions. Beyond simplified dynamics of enforcement related to taxation, and incentive structure shaped by electoral politics, governance of informal marketplaces is rooted in the ‘deep governance structures’. This article asks: How formal governance structure, shape the emergence of informal governance institutions in marketplaces that are informal? And, if taxation is not the defining feature of linkage to local government institutions, in what ways informal marketplaces impact on the local governance of their respective regions? To answer this question, this article draws on a wide range of literature on the informal economy, marketplaces, and informal traders associations-local government interface. It presents original empirical findings from an ethnographic study conducted in Batkhela bazaar, Pakistan. The contributions of this paper are two-fold. First, it shows the relevance of informal marketplaces and their traders associations to formal governance structure, a subject that is hardly investigated in the context of Pakistan. Second, it demonstrates, beside electoral politics, the dynamics of powers links these marketplaces to local political actors with implications for formal governance of the region.

Muhammad Salman Khan. (2017) Informal Economy and Formal Governance Structure: A case-study of Batkhela Bazaar, Pakistan., , Volume-11, Issue-4.
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