World Myth: the Dilemma of Formality and Informality

by Yusuf Abu Shamaa

Cities today are paradoxes. Rapid urban growth witnessed in the 21st century continues to affect urban development, while city identities are being compromised. The implemented political and economic policies have affected urban transformations, creating singular, extreme and polarised urban environments. Massey (2001) argues that the future of urban environments lies not in the developed Western cities but the developing cities of the Third world. They are unique transformations that need to be considered and to be learned from their organisation (Roy, 2005).

The Third World hosts a unique urban identity that allows for a unique transformation. The form of urban growth commonly seen here may be categorised as ‘Urban Informality’. However, this term has been used widely without clearly defining it. Zaraté (2016) comments that such a description negatively underlines the definition of the urban and creates urban isolation. Although rapid urbanisation has been a concern and urban development has claimed to pursue sustainable methods, it remains contradictory as the situation is worsening rather than improving! This article studies how the domination of the neoliberal model affects the urban and economic realms, which react to form informal societies. What is to be noted is that the label of informality is often assigned by governments and regimes.

The world has witnessed a population explosion in the last 20 years, reaching more than seven billion, triggering an unpredicted urban growth. According to the United Nations, 55% of the world’s population lives in urban areas today, expected to further increase to 68% by 2050. This reflects a movement of the world human population from rural to urban areas, thus adding another 2.5 billion people to urban areas by 2050 (United Nations, 2018). Cities are becoming unstable volcanoes that can erupt at any time.

Fig. 1: Urban Villages in China – Shenzhen, China (Source: WB Yang, Flickr,

As of 2003, over one billion inhabitants are living in informal housing (slums, squatter & hybrid housing) ­– a number expected to be doubled by 2030 (United Nations Human Settlements Programme, 2003). Therefore, the less-developed world today is bound together by a megatrend with some commonalities: Urbanisation, globalisation & informality. It leads to the following complex question – if the less developed world is defined by these characteristics, how can they be considered contemporary and yet not developed? Why has there been no change or development in the type of urbanity seen here? This question only shows the confusing experience of the city in the 21st century, creating new contrasts.

Informal settlements may be seen as urban environments no different from others, except for the lack of services and formal city structure. Yet, informal settlements are viewed as threatening and many formal urbanists argue that such settlements must be removed from their roots. Gouverneur (2014) argued that formal occupants of the city assume that informal neighbourhoods are a hub for violence, lack of culture and behaviour, an uninformed verdict passed by those who have never accessed such areas. This view has long informed the work of formal urbanists. Moser (1978) defined the informal sector as “the urban poor, or people living in slums or squatter settlements.” The origins of the term ‘informal sector,’ can be traced back to the work of Keith Hart. Hart (1973) distinguished between formality and informality by type of employment as self or wage employment, with the degree of rationalisation being the key variable. This dichotomy can be seen as a continuing theme in the exploration of informality, which has also been used by the International Labour Organisation (ILO) in describing small and illegal economic sectors. This was also applied to land ownership and land partition (UN-Habitat, 2009). The informal urban was born with modern urbanisation created by the triumph of the Industrial Revolution between 1917 and 1989. This triumph catalysed capitalism and the concept of globalisation, encouraging mass migration towards capital cities. The cities thus faced massive challenges due to rapid migration and economic change causing:

  • A lack of housing for migrants;
  • The rise of housing rents, which inadvertently caused the division of the city into different categories;
  • The appearance of unplanned ‘informal’ settlements to cover the shortage in demand for housing; and
  • The growth of the illegal economy which offered more opportunities for work.

Following the Industrial Revolution, cities were polarised between the concepts of globalisation and communism. At this time, ‘common goods’ were seen as items that provided use value to a plurality. Such goods would not only be available for common consumption but the commons would also govern its production, sustainability and development. This has been considered as just another facet of communism, referred to as the common social aspect. In parallel, ‘common goods’ were seen by economists as the social factor that creates the chains used to separate communities  (De Angelis, 2017). The dilemma created by such polarisation was reflected in the urban forms of the cities rapidly through spontaneous urban growth which was concentrated more in the Third World.

Ultimately, informality has been raised in a global network where modern cities are segregated into formal and informal sectors, heterogeneous entities which created their own ecosystems to survive. The formal evolved into the form of gated communities, created to protect economic and physical systems. On the other hand, the informal sector formed separate economic and societal systems to preserve their rights in the city. Thus, the incoherent cities of today were created.

Fig. 2: Globalisation on, Liberalisation & Capitalism Growth Effect (Source: Author)

Informality is not a problem but rather the consequence of social development that has accumulated with rapid urban growth. It has been neglected, left unnoticed or partially replaced by housing programmes (Gouverneur, 2014). Informal settlements are known by different names in different parts of the world –Favela in Brazil, Barrios in Latin America, Ashwaiyyat in Egypt, and Shanty Towns in English countries, etc. Despite the different names, their core is temporary but extending, irrelevant yet a crisis, clearly obvious but not considered. It could be referred to as a conjunction of inequality in power, economics and instability with the informal sector trying to be within the formal city without being able to. As a result, they are illegally formal (Wright, 2005).

The following definition of informality by Alfredo Brillembourg and Hubert Klumpner (2005, p. 18) is the closest to this article –

“We do not believe ‘informal’ means ‘lacking form’. It implies, for us, something that arises from within itself and its makers, whose form has not yet been recognised, but which is subject to rules and procedures potentially as specific and necessary as those that have governed official, formal city-making.”

Informality is not a new phenomenon – it is a process that has occurred since the dawn of civilisation. Due to globalisation both causing and resulting from the modernisation of cities, informality has become an essential topic. The formal cities of today are the result of past informality, as most cities were created without a master plan, growing organically. As stated by Neuwirth (2005, p. 179), “All cities start in mud!”

However, formality and informality share a complex relationship, both economically and physically. De Soto (1989, p. 14) commented that the informal economy was the people’s spontaneous and creative response to the state’s failure to satisfy the basic needs of the impoverished masses. The International Labour Organisation (ILO) (2002) found that the GDP generated by the informal sector in the Sub-Saharan region was more than 41%, while in South Africa, it ranged from 30-60% in Nigeria. This shows that about 93% of jobs in Africa during the 1990s were under the informal sector.

Ultimately, informality is an opportunity to create a more localised urban than a threat, yet, it is a critical situation that needs to be addressed in policymaking. Informality is a key part of the evolution of the city that can’t be rejected and could provide more advantages to the city, which could be grouped as in:

  • Self-Sufficiency: All Needs to be satisfied within the area;
  • Employment opportunities: High active labour market;
  • Decreasing the housing pressure from the formal sector;
  • Social Solidarity and Community Building; and
  • Participation.

The formal and informal are not separate entities – they are more than transactions involving economies and space (Roy, 2005). The differences between the problem and potential need are to be identified to guide intervention strategies. This would help in developing this complex situation, allowing planners, economists and the state to comprehensively understand the surrounding issues and possible solutions that could be implemented in future urban policies (Shehayeb, 2009).

Fig. 3: Truth of Informality – Formal & Informal Spheres (Source: Author)


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