Great points re. formalizing an informal system. You got me thinking. Formalization likely makes sense if there are problems with the current system (a need for standardization, lack of safety, or inequality or an inefficient market which can only be corrected by rules). Some of the problems (like inefficient markets) may not need formalizing. They could just be solved by technology.
The worry is that when you formalize, it sets an architecture. So all the innovation happens on top of the architecture, as opposed to within and below the architecture too. e.g. once cars formalized the 4 wheel chassis, all innovations happened outside the chassis and not many cars had 3-wheels or wheels that could rotate 360 degrees.
Standardization does make the system more predictable and, at the right points in the system, can even become platforms for more innovation. (Case in point is the standardization of the OBD port and OBD codes.)
But, in the wrong places, can stifle the system and make it less responsive.
There's no denying that there are problems in the system. Problems that need fixing. Maybe the approach is to think of the drivers of the system (no pun intended) and tweak those to get the right system behaviors. At the same time, keeping open the parts of the system that could allow more innovation.
Like the way India is doing it with electrification. The trick is not to specify a model (which I've seen some countries do with formalizing transportation), but instead set a goal or outcome and specify what the vehicles should do or have to achieve the outcome.
A performance-based approach to an outcome. I'm working on a project at the moment in which I am keen to slot in measures that evaluate the impact, not the input. The worst case of the latter I see in my world is measuring things like number of hospital beds per 100,000 residents. If infant mortality rates are not coming what does it matter if you build another hospital?
The waste picker situation is exactly analogous --a system emerges, self-organized, by the people who earn a living from the margins. The formal institutions don't recognize the value of the service. They take industrial style approaches to bring "order" and fail.
Great points re. formalizing an informal system. You got me thinking. Formalization likely makes sense if there are problems with the current system (a need for standardization, lack of safety, or inequality or an inefficient market which can only be corrected by rules). Some of the problems (like inefficient markets) may not need formalizing. They could just be solved by technology.
The worry is that when you formalize, it sets an architecture. So all the innovation happens on top of the architecture, as opposed to within and below the architecture too. e.g. once cars formalized the 4 wheel chassis, all innovations happened outside the chassis and not many cars had 3-wheels or wheels that could rotate 360 degrees.
That's a good metaphor, Ragu.
Standardization does make the system more predictable and, at the right points in the system, can even become platforms for more innovation. (Case in point is the standardization of the OBD port and OBD codes.)
But, in the wrong places, can stifle the system and make it less responsive.
There's no denying that there are problems in the system. Problems that need fixing. Maybe the approach is to think of the drivers of the system (no pun intended) and tweak those to get the right system behaviors. At the same time, keeping open the parts of the system that could allow more innovation.
Like the way India is doing it with electrification. The trick is not to specify a model (which I've seen some countries do with formalizing transportation), but instead set a goal or outcome and specify what the vehicles should do or have to achieve the outcome.
A performance-based approach to an outcome. I'm working on a project at the moment in which I am keen to slot in measures that evaluate the impact, not the input. The worst case of the latter I see in my world is measuring things like number of hospital beds per 100,000 residents. If infant mortality rates are not coming what does it matter if you build another hospital?
Agree, Kevin. Sometimes we measure only what is convenient and pretend it is an indicator when the outcomes don't actually match.
I am so encourage by your comment. Thanks, Mehul!
The waste picker situation is exactly analogous --a system emerges, self-organized, by the people who earn a living from the margins. The formal institutions don't recognize the value of the service. They take industrial style approaches to bring "order" and fail.
Have you seen the work of WIEGO in this space?
https://www.wiego.org/informal-economy/occupational-groups/waste-pickers