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<p>The States fragility continues to be the subject of renewed interest in a context of increasing economic globalization and fuels an extremely prolific body of literature. In this article, we investigate the effect of this fragility of states on the resurgence of the informal economy observed in developing countries. To achieve this, we decompose the State fragility index into five dimensions (cohesion, political, economic, social, and cross-sectional). In this perspective, we specify and estimate a dynamic panel data model of a sample of 122 developing countries (DCs) by the System Generalized Method of Moments (S-GMM) over the period 2006–2018, whose robustness has been proven by Lewbel’s method. Three major results are obtained: (i) States fragility is positively correlated with the informal economy; (ii) Information and Communication Technologies (ICT) is negatively correlated with the informal economy; (iii) the effects of States fragility on the informal economy are mediated by the internet, mobile phone, and broadband connectivity. We suggest strengthening the regulatory framework for ICT use and promoting a digital culture to sustainably mitigate the growth of the informal economy in DCs.</p>

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Are fragile States condemned to informality in developing countries?

  • 期刊论文

  • 发表日期：

    2026年7月30日

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  • Michel Freddy Harry Yamben,
  • Jacques Simon Song,
  • Donald Ferdinand Okere Atanga

摘要

The States fragility continues to be the subject of renewed interest in a context of increasing economic globalization and fuels an extremely prolific body of literature. In this article, we investigate the effect of this fragility of states on the resurgence of the informal economy observed in developing countries. To achieve this, we decompose the State fragility index into five dimensions (cohesion, political, economic, social, and cross-sectional). In this perspective, we specify and estimate a dynamic panel data model of a sample of 122 developing countries (DCs) by the System Generalized Method of Moments (S-GMM) over the period 2006–2018, whose robustness has been proven by Lewbel’s method. Three major results are obtained: (i) States fragility is positively correlated with the informal economy; (ii) Information and Communication Technologies (ICT) is negatively correlated with the informal economy; (iii) the effects of States fragility on the informal economy are mediated by the internet, mobile phone, and broadband connectivity. We suggest strengthening the regulatory framework for ICT use and promoting a digital culture to sustainably mitigate the growth of the informal economy in DCs.