ABSTRACT
In the last chapter, a theoretical explanation for informal entrepreneurship was set out based on institutionalist theory. This argued that formal institutional failures and imperfections lead to the development of asymmetry between formal and informal institutions, which results in a greater prevalence of informal entrepreneurship. In this chapter, the formal institutional failings and imperfections that are determinants of this institutional asymmetry will be discussed. Until now, analyses of the formal institutional failures and imperfections that lead to the development of institutional asymmetry, and thus the greater prevalence of informal entrepreneurship, have tended to adopt a random, or what might be termed scattergun, approach to the selection of variables to evaluate. In this chapter, however, the intention is to draw upon earlier theories that sought to explain the prevalence of informal entrepreneurship to identify the main formal institutional failures and imperfections to evaluate.
