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The origins of informality: the ILO at the limit of the concept of unemployment

  • Aaron Benanav (a1)

Abstract

Official histories suggest that the International Labour Organization (ILO) adopted the term ‘informal sector’ as a replacement for ‘traditional sector’, which, in its pairing with the ‘modern sector’, had fallen out of favour. This article argues that the adoption of the informal sector concept is better understood as arising out of a different context: the ILO’s post-war efforts to generate a globally operational concept of unemployment for use in the ‘developing world’. ILO officials abandoned this project in the late 1960s when they realized that, where work for wages did not constitute a widespread social norm, an accurate measure of what they called ‘disguised unemployment’ was impossible to construct. That led the ILO to develop alternative constructs, including ‘employment in the informal sector’. However, it proved difficult for the agency to operationalize those, too, and it soon found itself losing control of the policy implications of the measures that it was producing.

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*Corresponding author. E-mail: abenanav@uchicago.edu

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1 ‘The twenty-sixth session of the International Labour Conference’, International Labour Review (henceforth ILR), 50, 1, 1944, pp. 38–9. On the ILO, see Alcock, Anthony, History of the International Labour Organization, New York: Macmillan, 1971 ; Rodgers, Gerry, et al., The ILO and the quest for social justice, 1919–2009, Ithaca, NY: ILR Press/Cornell University Press, 2009 .

2 ILO officials were interested in developing a concept of unemployment that could be operationalized throughout the world, hence a globally operational measure. The ILO did not produce a measure of global unemployment – that is, an aggregate statistic for the entire world labour force – until the 1990s. On the project of UN statistics making, see Ward, Michael, Quantifying the world: UN ideas and statistics, Bloomington, IN: Indiana University Press, 2004 .

3 Morse, David, ‘Unemployment in developing countries’, Political Science Quarterly, 85, 1, 1970, p. 4 .

4 ILO Archive, Geneva (henceforth ILOA), file NYLO 1-2-2-6, jacket 2, telegram from ILO to UN, n.d.

5 My approach here draws from Morgan, Mary S., ‘Seeking parts, looking for wholes’, in Lorraine Daston and Elizabeth Lunbeck, eds., Histories of scientific observation, Chicago, IL: University of Chicago Press, 2011 ; and Spiech, Daniel, ‘The use of global abstractions: national income accounting in the period of imperial decline’, Journal of Global History, 6, 1, 2011, pp. 728 .

6 For a discussion of post-war efforts to extend the concept of unemployment to LDCs, see Mydral, Gunnar, Asian drama: an inquiry into the poverty of nations, vol. 2, New York: Twentieth Century Fund, 1968 , ch. 21.

7 Maul, Daniel, ‘“Help them move the ILO way”: the International Labor Organisation and the modernization discourse in the era of decolonization and the Cold War’, Diplomatic History, 33, 3, 2009, pp. 387404 ; see also Maul, Daniel, Human rights, development and decolonisation: the International Labour Organization, 1940–70, Basingstoke: Palgrave Macmillan, 2012, pp. 121151 .

8 Morse, ‘Unemployment’, p. 5.

9 See, for example, ILO, Measurement of underemployment, Geneva: ILO, 1957.

10 See Paul E. Bangasser, ‘The ILO and the informal sector: an institutional history’, Geneva: ILO, 2000. The first appearance of this term was in a lecture given by Keith Hart at the Institute for Development Studies in Sussex, in 1971, later published as Hart, Keith, ‘Informal income opportunities and urban employment in Ghana’, Journal of Modern African Studies, 11, 1, 1973, pp. 6189 . Its first appearance in ILO literature was ILO, Employment, incomes and equality: a strategy for increasing productive employment in Kenya, Geneva: ILO, 1972 (henceforth Kenya report).

11 Peattie, Lisa, ‘An idea in good currency and how it grew: the informal sector’, World Development, 15, 7, 1987, pp. 851860 .

12 See Garraty, John A., Unemployment in history: economic thought and public policy, New York: Harper & Row, 1978 ; Keyssar, Alexander, Out of work: the first century of unemployment in Massachusetts, Cambridge: Cambridge University Press, 1986 ; Salais, Robert, Baverez, Nicolas, and Reynaud, Bénédicte, L’invention du chômage, Paris: Puf, 1986; Christian Topalov, Naissance du chômeur, 1880–1910, Paris: Albin Michel, 1994 ; Walters, William, Unemployment and government: genealogies of the social, Cambridge: Cambridge University Press, 2000 .

13 Emmerij, Louis, ‘The employment problem and the international economy’, ILR, 133, 4, 1994, p. 460 .

14 ILO, Statistics of employment in the informal sector, Geneva: ILO, 1993, pp. 13–14.

15 On the politics of statistics-making, see Desrosières, Alain, La politique des grands nombres: histoire de la raison statistique, Paris: La Découverte, 1993 ; Mitchell, Timothy, ‘Fixing the economy’, Cultural Studies, 12, 1, 1998, pp. 82101 ; Tooze, Adam, Statistics and the German state 1900–1945: the making of modern economic knowledge, Cambridge: Cambridge University Press, 2001 .

16 On the neoliberal turn in development policy, see Toye, John, Dilemmas of development: reflections on the counter-revolution in development economics, Oxford: Basil Blackwell, 1987 ; Plehwe, Dieter, ‘The origins of neoliberal economic development discourse’, in Philip Mirowski and Dieter Plehwe, eds., The road from Mont Pèlerin: the making of the neoliberal thought collective, Cambridge, MA: Harvard University Press, 2009 .

17 See Kott, Sandrine, ‘International organizations: a field of research for a global history’, Studies in Contemporary History, 8, 2011, pp. 446450 .

18 Robinson, Joan, ‘Disguised unemployment’, Economics Journal, 46, 182, 1936, pp. 225237 .

19 Booth, Charles, Life and labour of the people of London, 3rd edition, London: Williams and Norgate, 1892, p. 150 .

20 Keynes, J. M., The general theory of employment, interest, and money, New York: Harcourt, 1964 (first published 1936), p. 15.

21 Robinson, ‘Disguised unemployment’, p. 227.

22 Ibid., pp. 229–30.

23 Ibid., pp. 227–28.

24 Rosenstein-Rodan, Paul, ‘The international development of economically backward areas’, International Affairs, 20, 2, 1944, pp. 157165 .

Josef Steindl appears to have been the first economist to apply the term ‘disguised unemployment’ to LDCs, at least in the English language. In 1942, he used the term in the course of describing economic issues associated with the expansion of wartime production in British India. See Steindl, Josef, ‘The impact of the war in India,’ Bulletin of the Oxford University Institute of Economics and Statistics, 4, 5, 1942, p. 107 . See also Mandelbaum, Kurt, The industrialisation of backward areas, Oxford: Basil Blackwell, 1947 .

25 Cuba and Indonesia were both countries where studies of disguised unemployment were carried out in the early post-war period. For a list of countries carrying out such studies, see ILO, Measurement of underemployment: concepts and methods, Geneva: ILO, 1966 .

26 Rosenstein-Rodan, ‘International development’, p. 160.

27 Ibid.

28 UN, Measures for the economic development of under-developed countries, New York: UN, 1951 ; Lewis, W. Arthur, ‘Economic development with unlimited supplies of labour’, Manchester School, 22, 2, 1954, pp. 139191 .

29 UN, Measures, p. 7.

30 See Tignor, Robert, ‘Unlimited supplies of labour’, Manchester School, 72, 6, 2004, pp. 702704 .

31 ILO, ‘Concepts and methods of the measurement of underemployment’, meeting of experts on the measurement of underemployment, working paper 1, Geneva: ILO, 1963, p. 11.

32 Maul, ‘Help them move’, p. 391.

33 Rodgers, et al., ILO, pp. 180–5.

34 ILO, Report of the director-general, Geneva: ILO, 1949, p. 3 .

35 UN, Maintenance of full employment, Lake Success, NY: UN, 1949, p. 89 .

36 Hsieh, Chiang, ‘Underemployment in Asia, I: nature and extent’, ILR, 65, 5, 1952, p. 704 .

37 Ibid., pp. 704, 709–10.

38 ILO, The ninth International Conference of Labour Statisticians, Geneva: ILO, 1957, pp. 3441 .

39 ILO, Measurement of underemployment (1957), p. 15.

40 ILO, ‘Concepts’, p. 9.

41 Ibid., pp. 35–6, 47, 71. See also ILO, The sixth International Conference of Labour Statisticians, Geneva: ILO, 1948 .

42 ILO, Measurement of underemployment (1957), pp. 9–10, 12–13; ILO, ‘Concepts’, pp. 30–3. Between 1952 and 1956, Italian and Japanese economists developed concepts of latent unemployment, underemployment, and insufficient employment for use in labour-force surveys, at a time when their own rapidly growing economies were still significantly agricultural and crafts-based. The ILO focused on Filipino and Puerto Rican studies, as more broadly relevant to LDCs.

43 ILO, ‘Concepts’, p. 14.

44 ILO, Measurement of underemployment (1957), p. 22.

45 Ibid., p. 22.

46 Ibid., p. 16. In 1961, an official ILO recommendation stated that employment must be ‘freely chosen’, in additional to ‘full’ and ‘productive’. See ILO, ‘Concepts’, p. 11.

47 See ILO, Measurement of underemployment (1957), pp. 83–4, and ‘draft resolution’ included on pp. 85–7.

48 ILO, The ninth International Conference of Labour Statisticians, Geneva: ILO, 1957, pp. 34–5.

49 ILO, Measurement of underemployment (1957), pp. 66–7.

50 ILO, ‘Concepts’, pp. 15, 37.

51 ILO, ‘Employment and unemployment: government policies since 1950, II’, ILR, 74, 2, 1956, p. 129.

52 See Nurske, Ragnar, ‘Reflections on India’s development plan’, Quarterly Journal of Economics, 71, 2, 1957, pp. 188204 .

53 ILO, Employment objectives in economic development, Geneva: ILO, 1961.

54 ILO, ‘Employment and unemployment’, p. 129.

55 ILO, Employment objectives, p. 22.

56 Ibid., pp. 63–6.

57 Ibid., pp. 66–71.

58 International Labour Conference, Record of proceedings of the 48th Session, Geneva, ILO: 1964, p. 780.

59 ILO, ‘Concepts’.

60 See ILO, Measurement of underemployment (1966), pp. 77–80, and ‘draft resolution’ included on pp. 89–93. See also ILO, The eleventh International Conference of Labour Statisticians, Geneva: ILO, 1967, pp. 24–5.

61 Rodgers, et al., ILO, p. 185.

62 Ibid., pp. 186–94.

63 ILO, Report of the Director-General: the World Employment Programme, Geneva: ILO, 1969, pp. 1–13.

64 Ibid., p. 65.

65 Streeten, Paul and Lipton, Michael, eds., The crisis of Indian planning, London: Oxford University Press, 1968 .

66 Dudley Seers, ‘The meaning of development,’ Revista Brasileira de Economia, 24, 3, 1970, pp. 5–28.

67 ILOA, file WEP-3, jacket 1, Hans Singer, ‘First thoughts: objectives of the World Employment Programme’, 20 January 1969. See also ILOA, file WEP-3, jacket 2, Hans Singer, ‘Speech on employment problems in developing countries and action programme for the decades of the 1970s’, 8 May 1969.

68 David Morse, ILO and the social infrastructure of peace, Nobel Prize speech, Oslo, 11 December 1969.

69 Morse, David, ‘Employment and economic growth: an international perspective’, Relations industrielles, 24, 4, 1969, p. 664 .

70 Morse, David, ‘The employment problem in developing countries’, in Ronald Robinson and Peter Johnson, eds., Prospects for employment opportunities in the nineteen seventies, London: Cambridge University Press, 1971, p. 7 . Archibald Callaway notes that ‘the phrase “dethronement of GNP” became a recurring’ and, in his view, also a ‘distracting theme’ at the conference. Archibald Callaway, ‘The Cambridge conference on development: prospects for employment opportunities in the 1970s’, Manpower and Unemployment Research in Africa, 4, 2, 1971, p. 4.

71 Kapur, Devesh, Lewis, John P., and Webb, Richard C., The World Bank: its first half century, vol. 1, Washington, DC: Brookings Institution Press, 1997, p. 255 ; Arndt, H. W., Economic development: the history of an idea, Chicago, IL: University of Chicago Press, 1987, pp. 97100 .

72 ILO, Report of the Director-General (1969), pp. 55–6, 83–4, 131.

73 Protests erupting in Europe in 1968 were an additional influence on this decision. In announcing the WEP, Morse recognized a ‘growing unrest among young people in many countries’, which took aim at ‘the form of society we have been trying to build’. See ILO, Report of the Director-General (1969), p. 102. Critiques of full employment as an inadequate goal for a free society appeared in the pages of the ILR in the 1970s and 1980s. See, for example, Macarov, David, ‘Planning for a probability: the almost-workless world’, ILR, 124, 6, 1985, pp. 629642 .

74 ILOA, file WEP-3, jacket 1, ‘Some data requirements of the WEP’, 16 February 1969, p. 1.

75 Ibid., p. 10.

76 Ibid.

77 Ibid., p. 7, n. 1.

78 Ibid., pp. 9–10.

79 Ibid., p. 9.

80 Ibid., p. 8.

81 Franklin, N. N., ‘Employment and unemployment: views and policies, 1919–1969’, ILR, 99, 3, 1969, pp. 293314 .

82 ILOA, ‘Some data requirements’, p. 11.

83 See Mydral, Asian drama, ch. 21 and appendix 16.

84 See A. D. Smith, Concepts of labour force underutilisation, Geneva: ILO, 1971, pp. 32–66. This text still includes references to ‘visible’ and ‘invisible’ forms of underemployment. In spite of its growing unpopularity, the term ‘invisible underemployment’ was not officially abandoned until a decade later, when prefixes were dropped and underemployment took on its present-day meaning, which refers exclusively to involuntary part-time work. See ILO, Statistics of labour force, employment, unemployment, and underemployment, Geneva: ILO, 1982, p. 47.

85 Fifteenth ICLS, Report of the conference, Geneva: ILO, 1993, p. 31.

86 ILO, Kenya report, p. 503; Bangasser, ‘ILO’, p. 11.

87 Sethuraman, S. V., ‘The urban informal sector: concept, measurement and policy’, ILR, 114, 1, 1976, p. 72 .

88 See Eric Thorbecke, ‘The employment problem: a critical evaluation of four ILO comprehensive country reports’, ILR, 107, 5, 1973, pp. 393–423.

89 ILO, Towards full employment: a programme for Colombia, Geneva: ILO, 1970, pp. 16–19; ILO, Matching employment opportunities and expectations: a programme of action for Ceylon, Geneva: ILO, 1971.

90 Subsequently published as Hart, ‘Informal income’, in 1973.

91 The moment is noted in IDS, Fifth Annual Report, Sussex: IDS, 1972, p. 29.

92 ILO, Kenya report, p. 3.

93 Ibid., p. 5.

94 Ibid., p. 504.

95 Ibid., p. 5.

96 Ibid., p. 504.

97 Ibid.

98 Ibid., p. 505 (see also p. 94, n. 2). See Geertz, Clifford, Agricultural involution: the process of ecological change in Indonesia, Berkeley, CA: University of California Press, 1963 .

99 See Leys, Colin, ‘Interpreting African underdevelopment: reflections on the ILO report on employment, incomes and equality in Kenya’, African Affairs, 72, 289, 1973, pp. 419429 ; Breman, Jan, ‘A dualistic labour system? A critique of the “informal sector” concept, I: the informal sector’, Economic and Political Weekly, 11, 48, 1976, pp. 18701876 .

100 Quoted in Sethuraman, S. V., ‘Introduction’, in S. V. Sethuraman, ed., The urban informal sector in developing countries: employment, poverty and environment, Geneva: ILO, 1981, p. 5 .

101 ILO, Employment, growth and basic needs: a one-world problem, Geneva: ILO, 1977 (henceforth Basic needs).

102 Moyn, Samuel, Not enough: human rights in an unequal world, Cambridge, MA: Harvard Belknap Press, 2018, pp. 119145 .

103 In a retrospective interview, Emmerij explained that, according to ILO thinking at the time, it was ‘unrealistic’ to try to meet basic needs by way of economic growth alone; changes in ‘income distribution’ were therefore seen as essential to meeting ‘basic needs targets’. See ‘Louis Emmerij, interviewed by Ashwani Saith’, Development and Change, 36, 6, 2005, p. 1169.

104 Chenery, Hollis, et al., Redistribution with growth: policies to improve income distribution in developing countries in the context of economic growth, London: Oxford University Press, 1974 .

105 The original draft of this document was first released in August 1975; it focused on shifts in the international division of labour. As late as July 1975, conference circulars made no reference to basic needs. See ILOA, file 1001–02, jacket 3, ILO, ‘Information paper’, July 1975.

106 ILO, Basic needs, pp. 10, 103, 109. See also ILO, ‘Information paper’, p. 5.

107 ILO, Basic needs, pp. 64–5.

108 Following the WEC, the ILO launched a research programme on ‘mass participation and basic needs’. See ILOA, file WEP-2-32-05. Papers from this programme were published in Franklyn Lisk, ed., Popular participation in planning for basic needs: concepts, methods, and practices, Aldershot: Avebury, 1985.

109 ILO, Basic needs, pp. 26–7.

110 Emmerij, Louis and Ghai, Dharam, ‘The World Employment Conference: a preliminary assessment’, ILR, 114, 3, 1976, pp. 304305 . See also Rodgers, et al., ILO, p. 194.

111 See Galenson, Walter, The International Labor Organization: mirroring the U.N.’s problems, Washington, DC: Heritage Foundation, 1982 .

Galenson had advised the ILO on the WEP in 1968.

112 See Schmelzer, Matthias, The hegemony of growth: the OECD and the making of the economic growth paradigm, Cambridge: Cambridge University Press, 2016 . For a pre-restoration account, see Arndt, H. W., The rise and fall of economic growth, Chicago, IL: University of Chicago Press, 1978 .

113 van Ginneken, Wouter, ‘Full employment in OECD countries: why not?’, ILR, 125, 1, 1986, pp. 1937 ; Singh, Ajit, ‘Institutional requirements for full employment in advanced economies’, ILR, 134, 4/5, 1995, pp. 471495 .

114 See Mouly, Jean, ‘Employment: a concept in need of renovation’, ILR, 116, 1, 1977, p. 3 .

115 Servais, J. M., ‘Flexibility and rigidity in international labour standards’, ILR, 125, 2, 1986, pp. 193208 .

116 See Lucas, Robert, ‘Unemployment policy’, American Economic Review, 68, 2, 1978, pp. 353357 . For a critique of the revival of this concept, see Standing, Guy, ‘The notion of voluntary unemployment’, ILR, 120, 5, 1981, pp. 563579 .

117 See Toye, Dilemmas of development; Plehwe, ‘Origins’.

118 Richards, Peter J., ‘Preserving jobs under economic stabilisation programmes: can there be an employment target?’, ILR, 125, 4, 1986, pp. 423434 .

119 ILO, High-level meeting on employment and structural adjustment: report of the meeting, Geneva: ILO, 1988 ; see also ILO, ‘Follow-up of the high-level meeting’, Geneva: ILO, 1990.

120 Corina, G. A., Jolly, Richard, and Stewart, Francis, eds., Adjustment with a human face, volume 1: protecting the vulnerable and promoting growth, Oxford: Clarendon Press, 1987 . See also Rodgers, et al., ILO, p. 197.

121 Sethuraman, ‘Introduction’, p. 23.

122 Ibid.

123 See for example, Horton, Susan, Kanbur, Ravi, and Mazumdar, Dipak, ‘Labour markets in an era of adjustment: evidence from 12 developing countries’, ILR, 130, 5/6, 1991, pp. 531558 .

124 ILO, The informal sector and urban employment, Geneva: ILO, 1990, p. 2.

125 See, for example, ILO, Report of the Director-General: the dilemma of the informal sector, Geneva: ILO, 1991, p. 9 .

126 For background, see the essays collected in Rakowski, Cathy A., ed., Contrapunto: the informal sector debate in Latin America, Albany, NY: State University of New York Press, 1994 .

127 Cathy A. Rakowski, ‘The informal sector debate, part 2: 1984–1993’, in ibid., p. 32.

128 de Soto, Hernando, The other path: the invisible revolution in the Third World, New York: Harper and Row, 1989, p. 185 .

129 Ray Bromley, ‘Informality, de Soto style: from concept to policy’, in Rakowski, Contrapunto, pp. 131–53; World Bank, World development report: workers in an integrating world, Oxford: Oxford University Press, 1995, pp. 7079 .

130 Quoted in Jennifer Bair, ‘Taking aim at the New International Economic Order’, in Mirowski and Plehwe, The road from Mont Pèlerin, p. 355.

131 Rakowski, ‘Informal sector’, pp. 36–9. See also the essays in Portes, Alejandro, Castells, Manuel, and Benton, Lauren, eds., The informal economy: studies in advanced and less developed countries, Baltimore, MD: Johns Hopkins University Press, 1989 .

132 International Labour Conference (ILC), Decent work and the informal economy, Geneva: ILO, 2002, p. 4.

133 Rakowski, ‘Informal sector’, p. 39.

134 For a more complete list, see ILO, Urbanisation, informal sector and employment, Geneva: ILO, 1984, pp. 17–18. On revisions to the employment recommendation, see ILO, Report of the Director-General (1991), p. 17.

135 ILO, Kenya report, p. 6.

136 ILO, Measurement of employment in the informal sector: a meeting of experts on labour statistics, Geneva: ILO, 1992, pp. 33–7; ILO, Statistics of employment in the informal sector, pp. 8–9.

137 See the official resolution, included in Fifteenth ICLS, Report, pp. 51–64.

138 Ibid., p. 53. See also ILO, Measurement of employment, p. 39.

139 Fifteenth ICLS, Report, p. 54.

140 ILO, Measurement of employment, p. 41.

141 Ibid, p. 52.

142 For a narrative account of this phenomenon, see Boo, Katherine, Behind the beautiful forevers: life, death, and hope in a Mumbai undercity, New York: Random House, 2014 .

143 ILC, Decent work, p. 27.

144 Ibid., p. 2.

145 ILO, Statistics of employment in the informal sector, pp. 13–14.

146 See Breman, Jan and van der Linden, Marcel, ‘Informalizing the economy: the return of the social question at a global level’, Development and Change, 45, 5, 2014, pp. 920940 .

147 Sethuraman, ‘Introduction’, p. 18; ILC, Decent work, p. 4.

148 See Hussmanns, Ralf, Measuring the informal economy: from employment in the informal sector to informal employment, Geneva: ILO, 2005 .

149 ILO, Women and men in the informal economy: a statistical picture, Geneva: ILO, 2018 .

150 Efrén Cordova, ‘From full-time wage employment to atypical employment: a major shift in the evolution of labour relations’, ILR, 125, 6, 1986, pp. 641–57. ‘Atypical employment’ often fits precisely Joan Robinson’s original definition of disguised unemployment: that is, the movement of individuals from high-productivity jobs in factories into alternative, low-productivity jobs. However, the latter were now more typically in shopping malls than on street corners.

151 Walters, William, ‘The demise of unemployment?’, Politics and Society, 24, 3, 1996, pp. 197219 ; Gautié, Jérôme, ‘De l’invention du chômage à sa déconstruction’, Genèses, 46, 2002, pp. 6076 .

152 See, for example, Lucas, Robert, ‘On the mechanics of economic development’, Journal of Monetary Economics, 22, 1, 1988, pp. 342 .

153 See for example ILO, Non-standard employment around the world: understanding challenges, shaping prospects, Geneva: ILO, 2016 .

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The origins of informality: the ILO at the limit of the concept of unemployment

  • Aaron Benanav (a1)

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