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Journal of Economic Integration 2024 March;39(1) :198-226.
Analysis of the Gap in Economic Informality between Africa and the Advanced and Emerging Countries

Mathieu Juliot Mpabe Bodjongo 1 and Wilfried Briand Kamdem 2

1Faculty of Economics and Management, University of Dschang, Yaoundé, Cameroon
2Sub-Regional Institute of Statistics and Applied Economics of Yaoundé, Yaoundé, Cameroon
Corresponding Author: Mathieu Juliot Mpabe Bodjongo ,Email:
Copyright ©2024 Journal of Economic Integration
This paper analyzes the factors that account for economic informality disparities between African countries and advanced and emerging economies. The study encompasses a survey of 84 nations, comprising 44 African countries, during the span of 1995-2015. The econometric outcomes, acquired from Krӧger and Hartmann's (2021) decomposition model, indicate that, on average, the level of informality in African country's economy is greater than that of advanced and emerging countries (OECD+). An increase in the standard of living of the population, an improvement in the control of corruption and the strengthening of financial development could enable African countries to reduce the explained gap. However, fiscal freedom, technological infrastructure, trade liberalization and political stability increase the explained gap. Furthermore, human capital and technological infrastructure reduce the total gap.

JEL Classification
E26: Informal Economy; Underground Economy
E20: General
F60: General
H55: Social Security and Public Pensions
O57: Comparative Studies of Countries
Keywords: gap | informal economy | decomposition method | Africa | emerging and advanced countries
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