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1. Ê In particular, outline the Harris-Todaro model as an explanation of the


formation of an informal sec tor.

2. Ê Briefly outline the alternative arguments for the existence of an


informal sector. If the question states that the in formal sector is Ǯless-
advantagedǯ note that there are a number of reasons that people
voluntarily enter the informal sector.

3. Ê Outline arguments for and against the informal sector, h ighlighting in


particular upon Brazils poor economic growth as a result of the size of
their informal sector.

4. Ê Compare this to the success story of Peru who minimised the size of their
informal sector.

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