Informal economy: weapon of the strong or weapon of the weak?

URA officials at uganda’s boarder


One vision of the informal economy emphasises the role of marginal sections of society: economically disempowered sections of the population look for a means of survival in informal trade, which has become unavailable through regular formal activities. It constitutes a “weapon of the weak” in a situation of general state neglect, corruption and the incapacity of the state to provide basic services or decent formal wages. Moreover, not only is the state unable to provide services, the oppressive state regulations make it difficult for traders to function, because of which they create an income for themselves outside of the law. Self-employed traders in the informal economy are therefore seen as “quintessential free traders” who neglect state regulations. The informal economy is therefore not only a space of strictly economic survival, but a more general political site of resistance and protection: it is therefore a reaction against the state and the domination of the political class, and their neglect of the concerns of the marginalised groups – the “powerless”. Because it involves illegal activities and the evasion of the control of a predatory state, it is an act of popular resistance or a political option co-opted by a political discourse challenging the legitimacy of a predatory state – an “attempt to beat the system”. This was explained in detail by De Soto, who described how the informal economy in Peru was used as a site of resistance against the state. In other words, informal economic activities allow marginalised sections of the population to create an income for themselves, independent of the oppressive state, and turn it into a political option. In doing so, dictatorial state-rule creates its own “massive social contradictions” in which protest and collective action is created.

This line of thinking became increasingly criticised by another, more recent, vision, which argues that the informal economy is not primarily a site of survival for marginalised sections of society, but is rather used by political elites for personal profit, leading to increased corruption and conflict: it constitutes a “weapon of the strong” rather than a “weapon of the weak”. This vision is largely associated with the literature on the criminalisation of the state, in which the involvement of state officials in illegal economic practices, and particularly cross-border trade, is a central element. In this situation, access to the informal economy was no longer considered free – producing “quintessential free traders” – but primarily prospers through connections with state officials. This does not only enable these illegal activities, but also protects this informal economy from competitors. In this context, informality exists because of formality: those in charge of the formal rules and control use their position to manipulate these rules for private gain, something which Portes et al. describe as the “informalization of privilege”.

The informal economy therefore is another strategy for opportunistic elites to enrich themselves – another strategy in the “instrumentalisation of disorder”. The political consequences of these economic activities are diametrically opposed to those of the informal economy as a site of empowerment for marginalised sections of society: through participation in the informal economy, political elites are not only able to enrich themselves, they are also able to further strengthen their dominant position. For the majority of the population, rather than being a site of empowerment, the informal economy becomes a site of disempowerment, which further entrenches clientelist practices. In other words, rather than representing a disengagement of the state, the informal economy signifies an engagement with the state: rather than constituting an escape route from a corrupt state, it is intrinsically part of the corrupt state.

This article wants to engage with this debate by providing in-depth ethnographic detail of the organisation of informal trade in the Ugandan borderlands of West Nile in north-western Uganda, which is the result of a unique opportunity to closely observe these activities. As Lourenço-Lindell argues, the complexity of the informal economy is better grasped by combing different elements of different pressures and perspectives on the informal economy which might seem a priori incompatible. Concretely, the article shows the fluidity between the visions of the informal economy as a “weapon of the strong” and a “weapon of the weak”: traders do not only need to engage with political elites, but also with the wider population in order to guarantee the functioning of their informal trading activities. In doing so, the traders rely on a range of institutional resources which blend the “weapon of the strong”/“weapon of the weak” dichotomy. As the traders cannot rely on the state regulatory framework, the informality of their activities forces them to engage with a variety of actors in order to regulate and protect their activities. On the one hand, they need to engage with a number of state officials who collaborate and instrumentalise this trade: they enable these trading activities and push out competitors. On the other hand, the engagement with the population is needed, in order to solve conflicts between the traders and also to protect the trade. This engagement or “negotiation” with both sets of actors defies the distinction between “weapon of the strong/weapon of the weak” visions, and shows the high political and economic ambiguity of the actions of this set of traders.

It is not possible to go into detail with regard to the challenges of research into this kind of unrecorded and illegal trade, but a brief reflection is necessary. It is obvious that it is not possible to conduct large-scale surveys of a randomly selected population on these illegal issues. Crucial in this kind of research is therefore entrance to these illegal networks and, related to this, building up relations of trust with the participants of this trade. I started working on the informal cross-border trade through a group of fuel smugglers, the OPEC boys, Through working with them for some years, and befriending them, I managed to build up trust in the wider smuggling economy of the area. What played an important role in this was the fact that I kept coming back over the years, while nothing “bad” happened to the given information. This reputation allowed me to gradually befriend key-players of the broader smuggling economy, which became key-informants for this research. Once these relationships of trust were established, they were very strong and allowed me to engage in (non-participant) observation of the cross-border contraband trade. Concretely, about 400 interviews have been conducted with actors within and/or related with this smuggling economy. A small number of middlemen, lower-level smugglers and government officials constituted my “home base”, who introduced me to other actors in the smuggling economy, and who made sure I could conduct this research in a “secure” way. I have generally spent a lot of time with them, both in their activities in the informal economy and in their leisure time, conducting semi-structured interviews, participant and non-participant observation. This allowed me to better understand the interaction between the different actors in the broader cross-border contraband trade. Similarly, the assistance of two research assistants was crucial in this research: they were (and still are) active in the informal cross-border trade, and facilitated entrance into certain networks, or conducted research into areas which were too sensitive to research for myself. In order to avoid biased views, attention was given to interview actors from different social backgrounds and networks. This allowed me to continuously cross check information among different actors. For example, information from certain smugglers was cross checked with other smugglers, but also with customs officials, other government officials, “legal” traders and various other actors. In all, interviews were not only conducted with traders who are active in this trade (higher- and lower-level smugglers, retailers, transporters and so on), but also with the relevant government actors (such as the customs officials, security agencies and population) and the general population (consumers). Finally, there are a number of ethical problems related with illegal activities, which can place both researcher and informants in jeopardy. For this reason, I have not used real names, to protect both my informants and the other subjects of research as much as possible: this article wants to analyse practices, not personalities.

This piece is written by Denis Oringi

an investigative journalist with Access fm and an editor with  the northern link ug

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