Theory of Change: Enterprise formalization for decent work

Briefing note | 23 September 2021
Enterprise formalization means bringing enterprises under the regulation with the advantages and obligations that this entails. In order to measure informality among economic units, it is necessary to determine a) to what extent economic units are registered with the relevant agencies at the national level, and b) to what extent they comply with the regulations that apply to them (e.g. on business, tax, social and labour issues). Enterprise formalization is a prerequisite for decent work.

The Theory of Change (ToC) on enterprise formalization describes how formalization can lead to more sustainable enterprises and decent work. It fits within the framework of the ToC on the transition from the informal to the formal economy.