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The purpose of this paper is to explore the roles of social networks and intermediares in recruitment and as instruments to control the workforce in lower end urban labour markets in developing countries. The existing literature favours explanations where networks and middlemen are vehicles to disburse information about vacant jobs or screening mechanisms that improve worker‐job matches. Intermediaries may also enable employers to evade labour regulations. This paper highlights instead their roles as incentive providers or mechanisms that alleviate behavioural risks in work relations. A novel aspect of this approach is that behavioural risks on both sides of the work relation are considered.

After reviewing the literature, a simple agency model is introduced to suggest new ways to identify whether networks and middlemen alleviate incentive problems in labour relations.

Studies of disparities in labour market access and outcomes are usually anchored in ideas of discrimination. A key insight is that the access to and performance of urban labour markets depend critically on the specific “services” networks and intermediaries extend to workers and employers. This adds an important complication to the evaluation of opportunities for income diversification through rural‐urban migration. Under some circumstances, both “institutions” may give rise to strong and persistent exclusion that is likely to vary systematically across sectors of the urban economy. In other circumstances, access restrictions can be remedied through simple policy interventions.

This paper introduces a new and important dimension to the study of urban labour markets as level playing fields.

The human development and capability approach (HDCA) and its associated participatory method is receiving growing attention as a useful conceptual development for comparative international education. HDCA challenges the economism so prevalent in world development thinking and, instead, looks at development as a process of enhancing persons’ incrementally achieved substantive freedoms from deprivations. The centrality of the person replaces the centrality of income growth.

The application of HDCA to the study of the role of education that promotes social justice change is illustrated by using an empowerment-capability framework to the long-term study of the benefits of village schooling for rural girls in western China.

Using HDCA to identify influences on social change, we derive a much more nuanced and valuable multi-dimensional view of human development, which enables us to draw broad implications for more effective policy. National policies should use a multi-dimensional informational base including equality, sustainability, and non-market dimensions of well-being as well as market production.