ABSTRACT

Introduction In a full-blown formal market economy, most goods and services would be produced, sold and distributed in the formal marketplace. This would mean that the vast majority of people would be in formal jobs since, to earn money to purchase the goods and services they need, they would have to earn money in the formal economy to purchase them. In this chapter, therefore, we first evaluate employment participation rates in post-Soviet/socialist economies to show the share of the population engaged in formal employment. This will reveal not only the small proportion of the population that directly participates in the formal market economy, but also how there are increasingly blurred edges between the private, public and third sectors, given that private sector organisations are increasingly pursuing a triple bottom line, while public and third sector organisations are also pursuing profit (albeit in order to reinvest so as to achieve wider social and environmental objectives). Second, we then show that a large proportion of those apparently engaged in formal employment both in the formal market economy and the public and third sectors are in fact often not engaged in formal employment in its pure form, but rather quasi-formal employment; it appears to be formal employment but is not quite. Put another way, we will reveal that a large number of formal employees working for formal employers with formal work contracts actually receive two wages, an official declared wage and an unofficial undeclared (‘envelope’) wage. In the third section, we then extend the analysis of the illegitimate nature of formal employment beyond the issue of envelope wages to evaluate the extent and character of workplace crime in these post-Soviet societies, from cradle to grave. This will analyse how informality pervades formal provision in kindergartens, schools, universities, entry to the labour market and healthcare. The concluding section then argues that not only is the formal economy in general, and formal market economy in particular, a much smaller proportion of the whole economy than has been popularly assumed, but even those people counted as being engaged in formal employment are often engaged simultaneously in illicit practices. The outcome will be to highlight not only the shallow and uneven permeation of formal employment in contemporary post-Soviet

spaces, but also how the formal market economy often blurs into more illicit work practices.