Details

Policy Brief

FORMALISING INFORMAL ENTREPRENEURSHIP: MAPPING THE POLICY LANDSCAPE OF PAKISTAN

M. Shehryar Shahid, Naiha Zafar (Research Associate), Tehreem Anwar (Research Associate)

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LENGTH : 53

LUMS No : 23-075-2021-2

PUBLICATION YEAR : 2021

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DESCRIPTION:

Despite the pervasive incidence of informality in Pakistan, tackling informal economy has always remained a daunting challenge. Absence of any formal attempt to consolidate and analyze the effectiveness of different policy actions targeted towards tackling the informal economy stands out as one of the major reasons for the latter. Though practitioners and researchers in Pakistan have published analyses of individual policy measures implemented in the country, to date, no attempt has been made to consolidate a comprehensive repository of measures into an organized framework. This note, therefore, intends to bridge this existing knowledge gap by mapping the policy landscape of Pakistan concerning the formalisation of informal enterprises in the backdrop of an international policy framework. To accomplish this, an extensive study of various policy measures undertaken by three different governments over the last 12 years (2008-2020) was conducted, and gaps in the overall policy approach of Pakistan concerning tackling of informal economy in general, and informal entrepreneurship, in particular, have been identified. Throughout the note, brief descriptions of numerous policy measures have been included, as befitted to the theoretical framework used. However, further details and complete mappings of all measures have been included in a supplementary annexure (Annexure A), which comes along with the note. Depending on instructor’s teaching objectives, Annexure A may or may not be shared with the students. Ideally, it should be shared with the students after the class discussion in case they show the intent to delve deeper into the details of various policy initiatives.

LEARNING OBJECTIVES:

Both teaching staff and practitioners can make use of this policy note. As a didactic tool, it can be used in undergraduate and graduate courses on public policy and informal entrepreneurship. In these situations, this note can be used to understand the prevailing policy landscape of Pakistan concerning the formalisation of informal enterprises. It also illustrates the shortcomings of the overall policy approach being used in the country. As a medium for classroom instruction, this note can also enable students to think about the future of the informal sphere in Pakistan and, consequently, the kind of policy measures that deem suitable. For practitioners, this note serves as a valuable repository of measures embedded in an international framework, enabling them to achieve clear analytical insight. This knowledge base can also provide a useful starting point to practitioners, as they delineate the future course action regarding the informal economy at large and, specifically, informal enterprises, strategically while being cognizant of the global reality. It also incites practitioners to carefully select an appropriate mix of policy measures without adversely impacting the budding start-up culture in the country. Nevertheless, the readers must be thoroughly introduced to the definition, determinants and competing theorisations of the informal economy/entrepreneurship before engaging with the policy debate. Therefore, it is recommended to use this policy note with another note, titled “The Informal Economy of Pakistan” (CRC # 16-299-2014-2).

SUBJECTS COVERED:

Entrepreneurship