The government mentality is a complicated and historical component that needs to be parsed in two ways: the role of populations as an object of management and administration versus state sovereignty. The State was rendered powerless to the surge of informality as it grew prominently in the untouchable private sector. The informal economy posed a conundrum of the relationship between power and authority of the state and the objects of that power.
However, when IOs and NGOs with their structural adjustment programs enter the development realm, we begin to see a historical shift in the roles of power relations amongst the public private state and the private sector of NGO’s. Once the IO’s were able to establish the criteria of informality through the mapping and redrawing of the informal economy, they begin to negate the role, or power, of the state, while emphasizing individual aspirations and not sovereignty. Thus, the IO transformed the informal sector through its successful mapping of the informal economy by formalizing it back unto the State itself.
The preconception of informality existed in illegal housing in Egypt. For example, despite informal squatting being a violation of state law, the state had no power to seize the property. Meanwhile, squatting was not a complete deficit to the state. In fact, several agencies can profit from these “informal property relations” as they are a “wealth and power in society at large”, including the state, thus “the state itself was not isolated from these dynamics” as it perpetuated the growth of the informal economy (580).
When terrorism became a challenge to security and state sovereignty, however, the ambiguity by the state to enact on squatting developed the association of the state v. informality. IO’s worked with other structural reconstruction programs as private enterprises to help the state assess the growing informal economy. With IO’s close involvement and funding of the state, it would need to re-draw the maps of the informal economies to expose organizations to data with areas they were working with.
It empowered itself by “mandat[ing] power to oversee the conditions of life of individuals neglected by their state” (586). These provisions of the informal economy would eventually open the potential of microenterprise as the developmental tool to remap the informal sector, so that the problem of informality “would recast as an issue solvable by economic means (587). But first, statistical surveys sought by the WB and IMF would come from informal information gathering networks for information the state could not be trusted to provide.
The implications of IO’s mapping perpetuated not a “political identity, but rather to human identity as a category outside of political divisions” (597). Re-drawing informal economics into microenterprises as businesses allowed the state to adopt and essentially absorb it. Since IO’s are working in a different level of the state, they map something else, which might undermine citizen’s claims to rights to the state’s ability to impose provisional reforms.
Additionally, Soto points, the informal economy was essentially the private sector. IO’s mapping of the informal economy enabled the push for states to recognize it as an official private sector. Suddenly, it becomes synonymous with the business sector, thus redrawing of that sector can be very much attached to profitability measures of microenterprise. There are certain elements of what have been known as the informal sector, though it has since been formalized in the sense that small businesses become involved in the private sector.
On the contrary, a result suggests, services – water, electricity, and roads – are controlled and would not be provided by the state (593). Ironically, informal housing was once a part of the informal sector, and when the informal sector is redefined as small businesses of microenterprise, suddenly public housing and rights to utilities and basic services provided by the government is under that discretion. By formalizing certain sectors, other sectors or other rights and claims of citizens become informalities.