Heft36 1 - SFB 580 - Friedrich-Schiller-Universität Jena

AT THE ORIGINS OF INFORMAL ECONOMIES:
THE UKRAINIAN CASE
page 202
nedeli), might have several weakenesses. One
is that ‘international standards’ do not always
take into account the local cultural and social
context, especially when dealing with corruption
(Polese 2008, Werner 2003). Legal systems,
if allowed to develop autonomously, may also
generate definitions that differ radically. 1
A further weakness arises in the case of small
transactions, happening on a daily or regular
basis, that allow common people to survive
once the state is unable to secure their needs.
In such contexts, the very word ‘bribe’ and its
meaning may be questioned (Humphrey 2002,
Patico 2002, Polese 2008).
A commonly agreed upon definition of
corruption is as follows: ‘corruption is the use
of a public function for a private advantage’.
However, if the public function (a doctor, a
teacher, a civil servant), that is, the fact that an
individual works for the state, is not supported
by the state (de facto, either because the state
is not paying salaries or is paying too little
to survive) then the very meaning of public
function should be re-discussed and, with it, the
meaning of corruption (Polese 2008, 2006b).
Drawing evidence from participant observation
and informal interviews between
2003 and 2009, when I spent around four
years working in Ukraine as a lecturer and
consultant in the non governmental
sector, I explore in this article the
relationship between the state and
the citizen in order to understand the
origin of such informal transactions.
In particular, I address the questions what
conditions encourage or discourage success of
an informal economy. In this respect, I suggest
that informal economies originate from tensions
between citizens and the state, in which
the former feels compelled to respect decisions
and policies imposed from the latter with no
possibility to express their opinions or react
politically.
In such a context, the only way to react is to
use informal economies as weapons of the weak
(Scott 1984). Through informal payments,
(petty) fiscal fraud or suitcase smuggling people
may reverse the effects of state decisions that
are not tailored to a local context. This, in turn,
may allow people to participate politically even
when a participatory democracy is not immediately
available (Gupta 1995). To support this
argument, the next sections will narrow down
the concept of informal economies, as defined
in this article, and discuss how informal transactions
are performed.
DISCUSSING THE INFORMAL SECTOR AND THE
ILLEGAL-LEGAL BOUNDARY
Agreement to consider the informal sector
within a national economy is relatively recent.
The informal sector was first defined as ‘unregulated
economic enterprises or activities’
(Hart 1973) until, in 1993, the International
Conference of Labour Statisticians (ICLS
1993) decided to include all unregistered
enterprises below a certain size – for example,
micro-enterprises owned by informal employers
as well as entrepreneurial operations owned by
individuals who may employ family members
or employees on an occasional basis.
This definition, however, may fail to include