Long-term Accounting and the Persistence of Delhi’s Informal Scrap Economy

• In Event: 051 - Regular Session. Economic Sociology. Law and Regulation in Economic Life

Abstract

A large literature in economic sociology demonstrates the importance of social relations in the most formal parts of the market economy (e.g. Baker 1984; Fligstein & Dauter 2007; White 1981), and it has been suggested that social ties are nowhere more embedded in economic actions than in an informal economy (Granovetter 1985). The literature is ambivalent, however, on whether informal enterprise is best described as an approximation of a pure market because of absent state regulation, or whether the lack of legal contracts results in pre-existing social ties becoming the ones that bind. While both structuralist and legalist accounts of informal economies are concerned with the macro-level forces, neither focuses on the importance of social ties in upholding informal economic relations. This paper asks: What structures urban marketplaces that do not rely on state law for enforcing contracts and promoting organizational longevity? How is cohesion established and maintained in the informal economy? Relying on 53 interviews conducted with actors in Delhi’s informal scrap economy, as well as participant observation of collection routes conducted over six months, I find that pre-existing social ties are used to enter the informal marketplace, and this is solidified through the giving and taking of advances, or loans, and the keeping of long-term accounts. The paper discusses the implications of these forms of exchange for urban development, reflecting on the relationship between ethnic and informal economies.

Author

• Dana Kornberg, University of Michigan