Legal Empowerment of Informal Workers: Alternative models of regulation for street vendors in Bogota, Colombia

Abstract

Many street vendors live under constant fear of eviction and harassment because the law does not recognize their businesses and they work outside the rule of law. Furthermore, in some cities street vending is a criminal offence to public order and vendors can be sent to prison. Using the empowerment theory, defended by Hernando De Soto, this article will examine to what extent formalization - understood as gaining legal status - can serve to empower informal vendors to increase their capital and economic development. Based on 169 interviews conducted in 2012 among street vendors in the city of Bogotá, Colombia whose businesses were formalized, this research was able to observe improvements in the vendors’ working conditions and income. However this improvement was not because of access to formal credit, as stated by the theory of formalization but instead due to the ability of the vendors to improve their working conditions and be protected from bad weather. The results illustrate that formalization is more than access to credit; it is a tool to improve the autonomy, self-esteem, and empowerment of the poor.