Short Answer: Question #1
The government mentality is a complicated and historical component that needs to be parsed in two ways: the role of populations as an object of management and administration versus state sovereignty. The State was rendered powerless to the surge of informality as it grew prominently in the untouchable private sector. The informal economy posed a conundrum of the relationship between power and authority of the state and the objects of that power. However, when IOs and NGOs with their structural adjustment programs enter the development realm, we begin to see a historical shift in the roles of power relations amongst the public private state and the private sector of NGO’s. Once the IO’s were able to establish the criteria of informality through the mapping and redrawing of the informal economy, they begin to negate the role, or power, of the state, while emphasizing individual aspirations and not sovereignty. Thus, the IO transformed the informal sector through its successful mapping of the informal economy by formalizing it back unto the State itself.
The preconception of informality existed in illegal housing in Egypt. For example, despite informal squatting being a violation of state law, the state had no power to seize the property. Meanwhile, squatting was not a complete deficit to the state. In fact, several agencies can profit from these “informal property relations” as they are a “wealth and power in society at large”, including the state, thus “the state itself was not isolated from these dynamics” as it perpetuated the growth of the informal economy (580). When terrorism became a challenge to security and state sovereignty, however, the ambiguity by the state to enact on squatting developed the association of the state v. informality.
IO’s worked with other structural reconstruction programs as private enterprises to help the state assess the growing informal economy....