A National Policy for the Informal Economy in Papua New Guinea

This article highlights the need to provide a supportive policy and regulatory environment for the informal economy in Papua New Guinea (PNG).

A majority of households are involved in the informal economy of PNG as producers and consumers. Greater access to informal income-generating opportunities could improve the livelihoods of these households. The article:

• Rejects negative perceptions of the informal economy;
• Cautions against undue optimism concerning potential of the informal economy;
• Discusses the limits of government action in support of the informal economy;
• Suggests advantages of providing a supportive policy and regulatory environment for the informal economy;
• Asserts the need to increase financial inclusion as a central economic policy goal, with microfinance as the primary policy instrument;
• Emphasizes importance of providing public goods and services whose absence or inadequacy has retarded the informal economy.

Finally, the article suggests public goods and associated government services that are useful for growth and development of the informal economy.