Informal production in Zimbabwe : a study of production methods and intersectoral relations with special reference to the clothing industry

Leiman, Anthony

Informal production in Zimbabwe : a study of production methods and intersectoral relations with special reference to the clothing industry

Master Thesis

1985

Publisher

University of Cape Town

Department

School of Economics

Faculty

Faculty of Commerce

Abstract

This thesis covers the constraints, both theoretical and practical, on the growth and evolution of the Zimbabwean informal sector, in particular of informal clothing and footwear production. The aim of the study was to provide a foundation for decision-making in the intersectoral allocation of resources. To this end, a survey was conducted of over one hundred and twenty formal and informal clothing producers in Bulawayo. The questionnaire was administered and completed by the author during the course of an interview, the questions requiring specific, as opposed to open-ended, answers. The production data obtained were analysed using the Kmenta formulation of the Constant Elasticity of Substitution (C.E.S.) production function, with a view to obtaining the production parameters. The data from formal and informal sector interviewees were analysed separately and in aggregate and tested for constancy of variance, significance of parameters and explanatory power. Whilst a number of conclusions are drawn in the course of the thesis, the central finding is that allocation of scarce resources to the informal sector should be based on the standard procedures used by venture capital seeking an outlet in a normal market economy, and in particular on the ability of the entrepreneur, since this appears to be an increasingly crucial variable as firm sizes fell.