Currently the Nepali government and the International Labour Organization (ILO) are involved in a campaign to increase rates of government registration among small businesses, which are technically illegal to operate unregistered. The program incentivizes and facilitates registration, attempting to change the cost-benefit analysis that shopkeepers make when deciding whether to register. Using interviews with small business owners in the Kathmandu area, this study provides qualitative data about what information these shopkeepers have, how they perceive the registration process, whether the government has traditionally followed through on its promises, and how all of these factors affect their registration cost-benefit analyses. Additionally, this study examines the perceptions, priorities, and methods of NGOs and government officials involved in directing initiatives which affect the informal economy. From the shopkeeper side we find that a confusing registration process as well as distrust in the government are the primary barriers to registration. From the government and NGO side we find that lack of information sharing and collaboration between various government ministries as well as between NGOs and the government are harmful to registration efforts.
Economics | Inequality and Stratification | Politics and Social Change | Work, Economy and Organizations
Lindgren, Anders Karl, "Not Just A Formality: How Inefficient Bureaucracy and Government Distrust Fuel Nepal’s Informal Economy" (2014). Independent Study Project (ISP) Collection. 1810.