Methodological note

Diagnosis of informality

Briefing note | 20 December 2021
To inform the design and implementation of laws and regulations, policies and other measures aiming to facilitate the transition to the formal economy, Recommendation No. 204 calls on Members to establish a proper assessment and diagnoses of factors, characteristics, causes and circumstances of informality in the national context.

This methodological note presents the 10 steps of a "standard" or "generic" diagnosis of informality carried out at country level. The preliminary or "pre-diagnosis" steps lay the foundations for carrying out a diagnosis within the framework of a participatory approach: raising awareness and building a common understanding of informality and formalisation processes. Steps 4 to 7 cover the essential components of the diagnosis, namely quantifying and qualifying workers and enterprises in the informal economy, their working conditions, the drivers of informality in their diversity, and mapping actors and policies. The last 3 steps "post-diagnostic steps" concern the development of an integrated strategy for transition to formality and operational action plans. This generic sequence offers some flexibility according to national situations and priorities.