Does the Informal Sector Thrive Under Democracy or Autocracy?: The Case of Nepal

Solomon, H. and Shrestha, S. 2014. Does the Informal Sector Thrive Under Democracy or Autocracy?: The Case of Nepal. Journal of Developing Areas. 48 (3), pp. 245-267. doi:10.1353/jda.2014.0044

TitleDoes the Informal Sector Thrive Under Democracy or Autocracy?: The Case of Nepal
TypeJournal article
AuthorsSolomon, H. and Shrestha, S.
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%.

KeywordsAutocracy, Democracy, Informal Sector, MIMIC, Nepal
JournalJournal of Developing Areas
Journal citation48 (3), pp. 245-267
ISSN0022-037X
Year2014
PublisherWestern Illinois University
Publisher's version
Digital Object Identifier (DOI)doi:10.1353/jda.2014.0044
Web address (URL)https://muse.jhu.edu/article/543880/pdf
http://muse.jhu.edu/article/543880
Publication dates
Published04 May 2014

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