Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

Institutionalization of informal economic practices in a transitive society


The processes of institutionalization of informal practices are considered in this article. The spread of informal social practices is a natural response to the significant lag behind the development of legal institutions of state power. A number of hypotheses concerning the functioning of informal employment are considered. So, the functioning of informal practices are related to the backwardness of the country, with the economic periphery or with the shelter for those who can not legally work.

Article deals with main scientific approaches to the study of the problems of transitive economy, it shows the current state of economic activity, its dynamics and characteristics of informal sector of economic activity from the viewpoint of the methodology of institutional analysis. Construction of the social space of Ukrainian society predetermines the institutionalization of new economic, political and cultural coordinates. Functional weakness of formal institutions creates favorable conditions for the intensification of informal institutionalization, which can sometimes undermine or limit the order of functioning of formal institutions.

The article describes the process of institutionalization of informal practices that penetrates every single form of economic reality – this is a compromise of formal rules and social norms. That is to say, informal practices are rooted in the gap of the laws and unwritten norms of behavior. It is shown that the deeper the gap, the weaker is the mechanism of enforcement for obeying the law, since there are more abundant informal practices. Similarly, informal practices are not just rooted in the laws and social norms, but are being massive, inevitably lead to the “destruction of the supports”, namely inducing the conscious correction of laws and unintentional modification of social norms of society. Formal rules themselves are solely applied under the impact of informal practices.

We have come to the conclusion that the Formal and Informal exist separately, while using the term “sector”. But as soon as we enter into a discussion about the bureaucratic and non-bureaucratic management, we notice the continuity of formal and informal orders. In the given article the vector of studies of the informal economy is shifting from the structural to the institutional direction.

  1. Nort, D. (1997). Institutions, institutional changes and the functioning of the economy. Moscow: Nachala [in Russian]

  2. Grytsenko, A.A. (2005). Institutional architectonics: object, theory and methodology. In R.M. Nureev, V.V. Dementev (Eds.), Post-Soviet Institutionalism (pp. 49-74). Donetsk: Kashtan [in Russian]

  3. Tarasevych, V.N. (2005). Institutional evolution: from protoinstitutions to institutions. Ekonomycheskaia teoryia – Economic theory, 1-2. URL: [in Russian]

  4. Kapeliushnikov, R. (2001). Institutional nature of transition economies: Russian experience of the modern. In T.I. Zaslavskaia (Ed.), Who and where seeks to lead Russia (pp. 89-98). Moscow: The Moscow School of Social and Economic Sciences [in Russian]

  5. Zaslavskaia, T.I. (2001). On the subject-activity aspect of the transformation process. In T.I. Zaslavskaia (Ed.), Who and where seeks to lead Russia (pp. 3-16). Moscow: The Moscow School of Social and Economic Sciences [in Russian]

  6. Petrushina, T.O. (2008). Socio-economic behavior of Ukrainian population in the conditions of institutional changes. Kyiv: Institute of Sociology of NAS of Ukraine [in Russian]

  7. Shtompka, P. (1966). Sociology of social changes. Moscow: Aspekt Press [in Russian]

  8. Yarulyn, K.Y. (2012). Institutionalization of informal social practices. URL: [in Russian]

  9. Khyzhnyak, L.M. (1999). Personality and the world of business organizations in a transforming society. Vіsnyk Kharkіvskoho derzhavnoho unіversytetu – Journal of Kharkiv State University, 433, 176-179 [in Ukrainian]

  10. Makeev, S. (2004). Social institution: function, genesis, structure. Sotsiologiia: teoriia, metody, marketing – Sociology: theory, methods, marketing, 4, 43-56 [in Russian]

  11. Shumpeter, J. (1982). Theory of economic developement. Moscow: Press [in Russian]

  12. Golovaha, E., Panina, I. (2001). Post-Soviet de-institutionalization and the establishment of new institutions in Ukrainian society. Sotsiologiia: teoriia, metody, marketing – Sociology: theory, methods, marketing, 4. URL: [in Russian]

  13. Barsukova, S.Ju. (2004). Informal economy: the economic-sociological analysis. Moscow: Publishing house: SU-HSE [in Russian]

  14. Nesterenko, A. (2000). Transition period is over. What’s next? Voprosy ekonomiki, 6, 4-17 [in Russian]

Full text