Social Scientist. v 15, no. 169 (June 1987) p. 34.

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while the informal sector is growth inducing. The growth inducing potential of the informal sector was also the original position of ILO after the Keith Hart study team to Kenya in the early seventies. That original position—namely government policies should be oriented to support that sector as it provides large employment potential particularly under conditions of zero growth and stagnation in the formal sectors of the economies, has over the years been contested by the Marxist and neo Marxist schools, in particular what might be identified as the 'petty commodity production9 group. Before I spell out the logic, content and problems associated with this alternate view, it is necessary to note, at least very broadly, the power that can be associated with the first view. For instance in a study sponsored by USAID, Jerry Jenkins noted, "The emergence of informal economies cannot be explained without reference to formal policies of governments. To the extent that the aspirations of people are thwarted by the policies of the novernments the population of participants in informal economies will grow." Further she notes, "Third World governments with their growth retarding policies, in conjunction with Third World people and their irrepressible human spirit, are nonetheless creating incubators for free enterprise and institutional development that is predicated on performance rather than privilege". The prescriptions of agencies such as the IMF and World Bank today to most of the Third World countries including India are also not altogether unknown to us. All that is being emphasized here is that the view that the informal sector is the outcome of government controls, and that it is an example of free market economy, should not be viewed as an isolated fact but as part of the ideologico-politico discourse on develop pie ot, and we need to be clear of who initiates and promotes such a discourse.

The o'her school of thought on the informal sector identified as 'petty commodity production' sees the evolution of the informal sector as structural, that is the outcome of an incomplete transition to capitalist development, and as the outcome of its articulation with extant pre-capitalist forms of production. The reasons for this incomplete transition vary Recording to contexts. In some cases it is the factors internal to a particular society, such as the limited size of home market that narrows the base of industrialization and hence of the formal sector, the existence of monopoly capital, the relative labour surplus and so on. It is also recognized that wh^e the structural factors contribute to the evolution and perpetuation of the informal sector, it is further exacerbated by policy measures of the government. The other viewpoint within the political economy of the petty commodity debate contexts the evolution and continuation to the incorporation of Third World economies into the world capitalist system in a dependent and subordinate position. While the existence of both these factors are undeniable, the intensity of each of these depended upon the specificities of each case, which also included in it the nature of the industrialization strategy, viz, the inward or outward lookingorientations of policy. The

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