Research Update Cluster for Research on the Informal Sector and Policy (CRISP) www.sheffield.ac.uk/creed/crisp
A nuanced approach – CRISP’s mission According to an Organisation for Economic Cooperation and Development (OECD) report, of the global working population of Director of CRISP, Colin C. Williams some three billion, nearly two-thirds (1.8billion) work in the informal sector (Jütting and Laiglesia, 2009). Across the world, what needs to be done about this informal sector is becoming a priority issue for many governments. Until now, most of the focus of scholarly attention has been on measuring its size and growth. Although this is important for raising awareness of the importance of this realm, such research provides few clues about what needs to be done about this issue.
The mission of the Cluster for Research on the Informal Sector and Policy (CRISP) is to seek understanding of the characteristics of the informal sector and the motives for people working in the informal sector so that policies can be formulated for tackling this issue. Our starting point is that different policy approaches and measures will be required in different populations to deal with different aspects of the informal sector. By adopting a more nuanced approach towards understanding the nature of the informal sector and the various forms of informal work, the intention is to develop a range of policy approaches and measures suited to the plurality of informal economic practices and the diverse social, economic, cultural and political contexts in which this endeavour occurs in a global context.
Policy brief for the Organisation for Economic Cooperation and Development (OECD) As part of the OECD/ European Commission programme on ‘inclusive entrepreneurship’, in 2014 CRISP was commissioned to produce a background paper on informal sector entrepreneurship, as the basis for an OECD policy briefing on this topic.
International secondments to and from the private sector A €1.3million grant has been awarded to CRISP, for a project entitled ‘GREY – Out of the shadows: developing capacities and capabilities for tackling undeclared work in Bulgaria, Croatia and FYR Macedonia’. This Marie Curie funded Industry-Academia Partnerships Programme is a four-year scheme which is seeing staff exchanged between the University of Sheffield and two private sector consultancy businesses in Croatia and Bulgaria, namely the Institute of Public Finance (IPF) and Vitosha Research Ltd. Until now, Sheffield University Management School has seen four staff go on secondment to the private sector (DR PETER RODGERS, MARIJANA BARIC, LYUBO MISHKOV AND MARINA POLAK) and three staff join us at the University of Sheffield from these private sector businesses (Rositsa Dzhekova, Josip Franic and Anton Kojouharov).
These international secondments to and from the private sector have the goal of not only academics and practitioners experiencing what it is like to work in an academic or business world context in another country, but also have the wider goal of developing concrete policy recommendations, based on rigorous empirical evidence, for those seeking to tackle the undeclared economy in Bulgaria, Croatia and FYR Macedonia. Indeed, the first GREY International Workshop, held in Sofia (September 2014) received widespread media coverage and reached a wide audience. It was the subject of a Bulgarian TV7 special report; reported live on Bulgarian National Radio; and six newspaper articles reporting the workshop were published. The seven Marie Curie Fellows employed on this project have also engaged in a wide array of additional activities, including acting as Marie Curie ambassadors visiting local schools, undertaking a 20 minute television interview on a Bulgarian TV show and conducting several TV interviews in Macedonia regarding the project.
European Parliament Legislative Initiative Research conducted by a member of CRISP has shaped Europeanlevel policy towards undeclared work. In 2010, arising out of an evaluation of the feasibility of establishing an EU platform for tackling undeclared work funded by the European Commission, CRISP – in collaboration with Regioplan (a Dutch consultancy firm) – published a report making recommendations. This stimulated an EU-level policy debate on how to tackle undeclared work, led to a motion being passed in the European Parliament, and informed a subsequent legislative initiative in the European Parliament in 2014 to implement the platform. In 2014, the European Commission launched the European platform for coordinating the fight against undeclared work. Watch this video to find out more: youtu.be/RFul_1tiEYk
Advising Charitable Organisations: Joseph Rowntree Foundation
Photo © Joseph Rowntree Foundation
As part of a four-year Joseph Rowntree Foundation (JRF) programme to produce an evidenced and costed anti-poverty strategy for the UK, CRISP conducted a review of the relationship between the informal economy and poverty. The aim of this evidence and policy review was to understand whether the informal economy helps those who are poor to escape their poverty and how to address the informal economy in anti-poverty strategies. A copy of the full report is available at www.sheffield.ac.uk/creed/crisp
Working with multi-national corporations: Randstad In 2014, CRISP members were commissioned by Randstad, one of the leading HR service providers in the world, to provide the central feature article for their annual global report, Flexibility@work 2014. This explored a key facet of the flexible labour market globally, namely the causes of undeclared work and how to prevent it. The finding was that by creating the right business environment for temporary employment and temporary work agencies, relatively successful economies reduce the supply and demand of undeclared work by providing both workers and employers with better alternatives. The debate, therefore, should be less about whether to allow flexible labour and temporary work, and more about how flexible labour and temporary work can be regulated to create a win-win situation for both businesses and workers. A copy of the Flexibility@work 2014 report is available at www.sheffield.ac.uk/creed/crisp
Working with the ‘think-tanks’: The Institute of Economic Affairs The Institute of Economic Affairs (IEA) commissioned PROFESSOR COLIN C. WILLIAMS to write a book with Professor Friedrich Schneider, Austria, entitled The Shadow Economy. This book is now available free from the IEA website at www.iea.org.uk/publications/research/the-shadow-economy. The publication has been influential in shaping the policy agenda on tackling tax non-compliance both in the UK and beyond.
Books published The Role of Informal Economies in the Post-Soviet World PROFESSOR COLIN C. WILLIAMS and DR PETER RODGERS of CRISP have coauthored (with John Round for the Moscow Higher School of Economics) a Routledge book on the post-Soviet economies. Based on extensive ethnographic and quantitative research, conducted in Ukraine and Russia between 2004 and 2012, this book’s central argument is that for many people the informal economy, such as cash-in-hand work, subsistence production and the use of social networks, is of great importance to everyday life. More details are available at www.routledge.com/books/details/9780415567213/
Confronting the Shadow Economy: evaluating tax behaviour and compliance policies Professor Colin C. Williams has produced an authoritative monograph which explores the effectiveness and transferability of the rapidly expanding range of policy approaches and measures available as weaponry in the fight against the shadow economy.
HOW MUCH FOR CASH? The cash-in-hand culture of the building and construction trades across Europe is not entirely driven by the customer’s desire to save money, according to an award-winning piece of collaborative research involving Sheffield University Management School and the School of Modern Languages. “This means that changing the cost/benefit ratio confronting consumers when choosing to use the cash-in-hand economy is unlikely to be a successful deterrent strategy,” said PROFESSOR COLIN WILLIAMS, co-author of How much for cash? Tackling the cash-in-hand culture in the European property and construction sector.
TEACHING AWARD FOR EXCELLENCE DR ROBERT WAPSHOTT has won the Early Career Senate Award for Excellence in Learning and Teaching.
The paper, published in Journal of Financial Management of Property and Construction, argues that policy makers need to turn their attention to improving the availability, speed, reliability and quality of more legitimate markets if they want to stop this practice. Professor Williams and his team examined evidence from a 2007 Eurobarometer survey involving 26,659 faceto-face interviews across 27 European Union member states to unravel the hidden decision making choices being made by consumers. “What we found is that saving money is the sole motive of consumers in just 38 per cent of cash-in-hand transactions in the European property and construction sector,” Professor Williams said. “Besides, saving money, consumers engage in cash-in-hand transactions to circumvent the shortcomings of formal sector provision in terms of its availability, speed and quality, as well as for social and redistributive rationales.” His work reveals the need for in-depth qualitative research to unravel consumers’ complex and diverse reasons for getting involved in this shadowy market.