Informal economy as a “good” “bad practice”? Informal sale of medicines in Lomé

Abstract

Purpose

The purpose of this paper is to expound on the idea that informal economy is a “conforming” situation, based on the informal sale of medicines in Lomé.

Design/methodology/approach

The paper takes the form of a case study based on interviews.

Findings

The case makes it possible to understand that the quality‐price ratio mainly explains the existing practices, inducing an immediate satisfaction of the purchasers. Indeed, the average income in developing countries is very low and consumers are inclined to buy these products because of their low prices (i.e. “Bottom of the Pyramid” issues – BOP).

Research limitations/implications

To say that the informal economy “conforms to the rules” is to assert its institutional dimension and suggest it should be considered within the categories of institutionalization. It is also a scathing criticism of the logic of international organizations and CSR, one that is unlikely to crop up in the so‐called audited reports.

Practical implications

Informal economy gives rise to innovations and the development of a kind of entrepreneurship dissimilar to that of business schools and the very honorable “social entrepreneurs”. Concepts such as leadership, motivation, negotiation power, organizational learning, strategy, competitive advantage, diversity and the like have coherent materializations, albeit structurally different in origin from the received wisdom about them.

Social implications

The argument of this research is based on the observation that informal economy is a situation just as “conforming” as the formal economy. It should be mentioned that in economics, grassroots collective and non‐institutionalized action is referred to as “informal economy”. It is regarded as inseparable from the formal economy – as evidenced in the case of Togo's reform of public health policy following the Bamako Initiative and its consequences as studied in this paper – but receives less attention despite numerous studies.

Originality/value

This paper presents a real field study. The interviews were carried out near all the categories of actors implied in the drugs sales: wholesalers and retailers and customers (primary wholesalers, local dealers, retailers, patients).

Citation

Worou‐Houndekon, R.D. and Pesqueux, Y. (2013), "Informal economy as a “good” “bad practice”? Informal sale of medicines in Lomé", Society and Business Review, Vol. 8 No. 2, pp. 160-178. https://doi.org/10.1108/SBR-02-2013-0021