#04-20:

Most developing countries are characterized by large informal sectors, which are plagued by low productivity and other serious problems. This paper suggests a three-ford remedy for formalizing the large informal sector: formalization of property rights, alleviation of corruption and deregulation. In the case of India, which is studies in the paper, it is seen that the first two channels are more promising than the third one. The paer also rejects the notion of idcontinuation of informal business activity by force.

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