The fallacy of the formal and informal divide: Lessons from a post-Fordist regional economy

I will argue through the use of both quantitative and qualitative data that the theoretical meaning of “informality” is per se insufficient to explain the process of change that the informal economy in Italy is undergoing. For a more comprehensive understanding of current trends, an analysis should look at the articulation between formal and informal arrangements of employment that actors continuously reshape to escape forms of regulation. The chapter will begin by illustrating the extent to which the informal economy is widespread throughout the Italian context and will argue that regional variations must be considered to interpret the phenomenon of an informal economy. As I will demonstrate, the apparently vast presence of informal employment in the South detected by sophisticated macro data, widely interpreted as an unambiguous marker of the economic divide between north and south, may actually obscure more interesting dynamics that emerge at the local level, and particularly in the north, the main focus of my attention. In the next section the ethnographic research carried out in an industrial district of northern Italy will reveal how in a regime of flexible production, informal arrangements of work are still an important element for the functioning of a system threatened by an increased competition from within the region and from outside, i.e. the global economy. However, such arrangements cannot be explained accurately simply by resorting to economic discourses, but by arguing that such practices are culturally embedded in relations that are social prior to being economic.