Beyond residuals: informality as an enduring feature of developing economy, the Ghanaian experience

Abstract

Purpose This study is motivated by the consistent underestimate of structural importance, portraying informality as a temporary deviation from formal development pathways. This study aims to investigate the push and pull factors that sustain and strengthen Ghana’s informal economy. Design/methodology/approach Anchored on the structuralist and institutionalist theoretical perspectives, the study utilised policy documents and peer-reviewed academic articles published in leading international journals as data sources through a systematic review. Findings The findings reveal that the persistence of informality is driven by a complex interplay of economic, social and institutional weaknesses that are mutually reinforcing. Consequently, regulatory reform, expanded social protection and targeted skills development emerge as critical strategies for strengthening the informal economy. Research limitations/implications The evidence further underscores the need for a deliberate shift away from ad hoc, top-down policy interventions towards inclusive reforms that address the structural foundations of informality. Originality/value The originality of this study lies in its contextualised analysis of both the drivers of informality and the strategies required to enhance its developmental potential.