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Potential pitfalls of regulating the informal sector

Last edited: December 21, 2011

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  • Regulations about the appointment of arbitrators in informal systems should be carefully considered and can backfire. For instance, requiring appointment of more women through regulation may erode the mechanism’s ability to control the men who come before it as accused persons, leaving women in a worse position than previously. This problem can be addressed in some cases by appointing only women elders to the decision-making bodies, or by carefully increasing the participation of women over time, instead of through regulation with immediate effect.
  • State regulation of the informal sector can create dual layers of discrimination against women (Balchin, 2010). States should carefully monitor the regulation of the informal sector for unintended consequences.

More information about law reform is available in the section on the Formal Sector and in the module on Developing Legislation.