The Informal Economy and Its Dilemmas in Latin America: The Case of Street Vendors in Porto Alegre, Brazil

The recent and renewed interest in the informal economy seems to overcome some dilemmas that have emerged from the 1970s debate. In particular, theoretical analysis has become more centred on the understanding of sectoral or regional phenomena, rather than on constructing master narratives. The focus has shifted to the relative nature of the notion of informal economy, and the analyses concentrate on the space and the interplay between the two poles of the economy. This chapter follows this recent trend, presenting some insights from a description of informal economic activities conducted by street vendors in Porto Alegre, Brazil. Observations of the street vendors’ actions have shown a relevant fragmentation related to the nature of goods that street vendors sell, the area where they work, the status of employment, and the mix between manufacture and retail activities that often typifies their informal jobs. Moreover, street vendors have revealed individual capacities aimed at competing in the market. However, most of them cannot make sufficient profits to improve their overall economic and social wellbeing. It is precisely to defend themselves against the free operation of the market that these social actors seek to rebuild a sociality, which can assume different forms. In particular, some street vendors’ associations have been able to redefine its initial objectives (linked to the need to cope with an emergency situation) and shift its action to gain important improvements for its members. Using Albert O. Hirschman’s (1970) ‘exit/voice’ framework, some grassroots organizations have improved the efficacy of voice, increasing its attractiveness in a context where the incentive to act independently (exit option) seemingly predominates