Resilience and risk in the informal economy: a study in the regulation of flooding

Doctoral Thesis


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University of Cape Town

Small scale business owners living and operating businesses in flood prone informal settlement areas are amongst the most vulnerable groups of society to climate change and associated risks. The state is unable to provide key goods and services in many of these areas of limited statehood. How these business owners respond to flood hazard in areas of limited statehood is of interest to this research. This research explores the governance processes in informal settlement areas in Cape Town, South Africa. A key concern in this study is what widespread informality means for the lived realities of the poor in environmentally vulnerable communities, particularly informal settlement areas. I explore the flood management strategies available in both the formal and informal sectors and how they are used by the small-scale business. Using a mixed method approach, in two informal settlement areas in Cape Town, I draw out and test factors for comparison with a focus on understanding the determinants of small business owners' choice and use of flood management strategy. The main literary contribution that this study makes is to demonstrate the ways in which civil associations in the informal sector built social capital that is then called upon at times of hazard. These civil associations help the business owners monetarily, but they also have inbuilt social capital which members exploit to respond to hazards other than the ones that the associations were created for. This way, small business owners can count on fellow community members in the face of adversity. I explore the ways that social capital is built in these associations, and how members are encouraged to contribute towards it and help others in times of need. This research helps our understanding of regulations outside of the state, and the governance role of non-state actors to respond to multiple hazards. By interrogating this governance issue in informal settlement areas and amongst low-income owners, I contribute to the growing literature on informality in African cities. The research makes an important contribution to research study whose framing of the state is empirically based, and therefore reflects the reality on the ground in many African cities. Much of the literature on governance in African studies had assumed the idea of a Westphalian state and interrogated the state, its functions and interaction the populace under this framing. Consequently, such research is unable to capture the real nature and governance capabilities of the state and raised more questions that it has been able to answer. Further, this framing of the governance role of the state in African cities obscures the role of non-state governance actors in both the formal and informal sectors. To this end, I conducted interviews with a total of 154 small business owners in Joe Slovo informal settlement in Langa township and Victoria Mxenge informal settlement in Philippi township. The interviews elicited information on business owners' exposure to flooding, their response and the factors that influenced their choice to response mechanism. A survey was also conducted to get demographic data of the business owners in the research sites, other key government officials, academic researchers, and representatives of insurance companies in the formal market. Based on this survey data further variables that could influence the choice of flood management strategy were drawn and tested in further interviews. The findings of the research point to the usefulness of nonstate institutions in the response to flooding in poor communities. The social capital built in to civil associations and its availability to fellow members at times of adversity makes them an adaptive vehicle to respond to numerous other hazards other than the ones that they are intended for.

Includes bibliographical references