Association for Public Policy Analysis & Management

The purpose of this literature review is to present academic research about Hispanic driven informal economies. The information will be purposefully organized in order to foster a dialogue among policy makers about the responsibility they have to informal economies. The scholarly readings in this literature review will provide a theoretical foundation for analyzing the policies presented. This literature review is useful to policy makers to help them understand the significance of informal economies in developing contexts, particularly for growing Latino/a communities in Los Angeles, California. The scholarly works presented in this paper will show how policy makers can decriminalize street vendors and assist transitioning an informal economy into formal institutions.

To begin, we will review three scholarly works that analyze the informal economy from multiple perspectives. The first journal we will review is, Michael Pisani’s “Consumption, Informal Markets, and the Underground Economy: Hispanic Consumption in South Texas”. Pisani’s article, which defines what an informal economy is, will help policy makers see the relevance of consuming informal goods for the Hispanic culture. Second, we will discuss, “Street vending in the neoliberal city: a global perspective on the practices and policies of a marginalized economy” by Kristina Graaff and Noa Ha. Graaff and Ha’s chapter about Street Vendors in Los Angeles will assist in revealing how informality is a major major public policy concern in developed economies like Los Angeles. Furthermore, we will review the essay of Pierrette Sotelo entitled, “Affluent players in the informal economy: Employers of paid domestic workers.” Sotelo’s essay will provide us with information contrasting the stereotypical belief that informal economies are only used by the poor or underprivileged communities.

To sum up, this paper will review three scholarly writings and two public policy approaches that policy makers can use to better integrate Hispanic driven informal economies in Los Angeles. The first public policy approach is found in “Competing Against the Unknown: The Impact of Enabling and Constraining Institutions on the Informal Economy” by B. D. Mathias and Sean Lux and T. Russell Crook and Chad Autry and Russell Zaretzki. In this article there will be two policy recommendations put forth. The recommendations presented in this paper are focused on engaging marginalized communities into formal institutions and Cooperative Action. The second policy we will present is Senate Bill 946 authored by former Senator Ricardo Lara. SB 946, or the “Street Vending Program”, is a piece of legislation that decriminalizes sidewalk vendors and gives optimal freedom to local governments to adopt their own street vending programs. Drawing from these and other scholarly papers, we will determine whether or not the policies are consistent with the arguments and theories presented in the literature.