Entrepreneurship in the Underground Economy
Chapter 11: Moving Underground Enterprise into the Mainstream: Supply-side Initiatives
11. Moving underground enterprise into the mainstream: supply-side initiatives INTRODUCTION The last chapter reviewed measures to help business ventures start up legitimately from the outset. If the underground economy is to be tackled, however, curative remedies are also required. Until now, as highlighted in Part III, the predominant way in which public policy throughout the advanced economies has sought to deal with those currently working in the underground sector is by using deterrents (‘sticks’) to push enterprise out of the underground sphere. Although perhaps appropriate if the sole intention of governments was to eliminate such work, this is no longer the case. As shown earlier, increasingly, they also want to shift this work into the formal economy, not least so as to move nearer to full employment and promote the development of an enterprise culture (see European Commission, 2002, 2003a, b; ILO, 2002; Small Business Service, 2004). There is a growing appreciation, in consequence, that deterrence measures are necessary but insufficient. To transfer such work into the formal economy, the emerging recognition is that deterrents (‘push’ measures) need to be supplemented with enabling (‘pull’) initiatives that help underground businesses legitimize their operations (Copisarow, 2004; Copisarow and Barbour, 2004; Evans et al., 2004; ILO, 2002; Small Business Council, 2004; Williams, 2004a, b). In the next chapter, demand-side incentives will be evaluated. In this chapter, the focus is upon supply-side measures to help underground suppliers make the transition to the legitimate economy. Three broad types of supply-side initiative will be here evaluated....
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