Project Description

Official statistics show that, by 2004, the informal commerce in Venezuela employed 1.5 million people (15% of the labor force) and contributed to 3.25% of the Venezuelan GDP1. Unemployment rates (averaging 14.11% in the 1996-2004 period), high costs of doing business (e.g. De Soto et. all, 1989 pioneer study in Peru; Penfold, 2001 in Venezuela), and low quality of public goods (Levenson and Maloney, 1998; Azuma and Grossman, 2002), engender positive incentives to engage in that informal activity.