Does the Informal Sector thrive under Autocracy or Democracy: The Case of Nepal

Date
2014-07
Authors
Shrestha, Sibhaa
Solomon, O. Helen
Journal Title
Journal ISSN
ISSN
Volume Title
Publisher
Journal of Developing Areas
Peer reviewed
Yes
Abstract
Our paper investigates the size and development of the informal sector in Nepal using aggregate data over the period 1991 to 2009. Our estimation using the Multiple Indicator Multiple Cause (MIMIC) model shows that the average size of the informal sector has been about 44%. Nepal has been classified as having a hybrid political regime, so we show the effect that autocracy and democracy has had on the growth of the informal sector. Our results shows that a high degree of autocracy reduced the size of the informal sector by about 2% while greater direct democracy reduced the informal sector by about 10%.
Description
Keywords
autocracy, democracy, informal sector, MIMIC model, Nepal
Citation
Solomon O.H and Shrestha, S. (2013) Does the Informal Sector thrive under Autocracy or Democracy: The Case of Nepal. Journal of Developing Areas, 48 (3), pp. 245-267
Research Institute
Institute for Applied Economics and Social Value (IAESV)
Centre for Enterprise and Innovation (CEI)