Informal economic activity can only be understood in relationship to its counterparts in the institutions of the formal economy, most notably in markets for labor, goods, and services. In most modern, industrial, capitalist societies, economic activity occurs in the form of exchanges of cash for labor, consumer goods, and services within well-regulated economic institutions located within the

formal economy. The labor market, in particular, provides the framework for regulating the exchange of work and wages between sellers and buyers of labor (workers and employers) under the auspices of a legal and regulatory environment enforced by the state. At the same time, it is also widely recognized that livelihood strategies may entail all manner of exchange outside these formal institutions and regulations. That is, exchanges may occur in the informal economy. Goods and services may be bartered, traded for nonmonetary compensation, or produced under conditions...