Despite numerous research efforts and a number of 'friendly' national policies on the field of the informal economy in South Africa, there does seem to be a continuous public policy conflict at local government level in this country. The evolution of the informal economy and the policy crisis at local government level seem to be largely shaped by the legacy of colonialism and racial capitalism. This study focuses on three critical policy areas of informal trading, namely; the taxi industry; the shebeens that belong to the category of home based economy; and street traders. These three are the oldest form of informal economic activities pursued by the Africans (indigenous people). The study will investigate the progress of informal trading as a critical policy area for municipalities made thus far since the democratisation of South Africa in 1994. It confronts the lack of progress by this sphere of government. It concludes by exposing the neglect of the three types of informal trading. It also concludes that the development of sound informal economic policies at municipal level is a prerequisite as there are national policies and legislation that need to be adhered to. The study recognises that despite the development of sound informal economic policies being obligatory, there is an underlying social, political, environmental and economic need for this important process. It finally identifies the specific critical areas that need to be addressed and recommends a policy process that is participatory, credible and progressive.

Thesis (M.Soc.Sc.)-University of Natal, Pietermaritzburg, 2002.