Department of Humanities and Social Sciences

Indian Institute of Technology Ropar

HSS Seminar

‘Informality, Governance and Growth'


Dr. Dibyendu Maiti

September 14 , 2018 at  3:00 PM

Venue:  Conference Room 2


This paper develops a growth framework of a typical developing and democratic setting with formal and informal sectors, which faces trade-off of redistribution through either direct subsidy or strategic regulatory concession to operate informal activities. Inverted U-shaped growth and welfare functions against governance are found, which suggests a deliberated weak governance can raise growth and welfare of the economy with large informal sector keeping taxation at lower level. The governance that maximises growth varies inversely with subsidy given to informal sector and formal labour bargaining power. Unlike the level maximising welfare, the governance that maximises growth becomes independent of the bargaining power in case of no subsidy. Using standard parameters, the calibrated growth and welfare functions support these relations. Econometric results derived from instrumental and system regression models using pooled data for 46 countries during 1995-2009 justify such conjectures. This explains why the growing countries show higher level of informality.

Brief Bio-sketch of the speaker

Dr. Dibyendu Maiti is an Associate Professor at Delhi School of Economics, University of Delhi. Prior to this, he taught at the University of South Pacific (Fiji), Institute of Economic Growth (Delhi), Centre for Studies in Social Sciences Calcutta and University of Manchester. Dr. Maiti received his PhD degree from Vidyasagar University. His areas of expertise include International Trade, Macroeconomics, Mathematical Economics , Business Economics,  Development Economics and Game Theory. In 2014, he published Reform, Productivity Growth and Formal Labour Market in India, (Routledge) and recently, he coauthored the book  ICT, Digital Divide and Development (Springer, forthcoming)