A meditation on markets

As in every developing country I've traveled in, most everyday commerce in West African countries takes place on the streets rather than in "real" stores. There are some fairly big differences between and within countries, of course: In Accra especially, the markets come to you in that anytime you are stopped in traffic (which is about 80% of the time you're in a car), you are approached by vendors darting through the stopped vehicles to sell you anything from a bag of cashews to a colander to a cell phone -- you could literally do a day's worth of shopping without ever leaving your car. In Dakar people are particularly insistent that surely any white person wants to buy whatever it is they are selling. In Serekunda's main market I for some reason have been unable to locate the sellers of bananas and oranges, though other fruits and vegetables are readily available and you can get bananas and oranges on any road outside town.

But the basic point is that the "informal" economy far outpaces the "formal" economy in the realm of everyday goods and services.

I've been thinking a lot about why that is, how it works, and what the factors are that would lead to an informal market economy to turn into a formal store-based economy. Here's what I've come up with so far:

Hallmarks of an informal market-based economy

• Lots of small-scale subsistence or barely-above-subsistence farming/gardening
• Child labor is available for hawking goods
• Transportation has a relatively high cost in terms of either time or money, so lots of small outlets spread out all over town selling an item significantly reduces transaction costs
• High unemployment
• Low literacy/level of qualification to be employed in the formal economy
• Culture of markets
• Warm weather year-round
  

Hallmarks of a formal store-based economy

• Information about where to purchase things is readily available, whether because of chain reputation, the presence of the internet, or something else.
• Credit readily available/credit cards in widespread use
• Relatively high income level for lowest 20% -- high enough that the marginal amount you can earn by buying a good from a distributor and then selling it on the street, usually, against stiff, ubiquitous competition, is too low to be worth your time even if you are unemployed
  
• Strong culture/enforcement of paying sales/income taxes
• Strong enforcement of licensing/loitering/etc provisions
  
• Culture of stores (meaning simply that consumers are used to going to stores to buy things instead of buying them on the street)
  

I just made this list up, of course, and it really doesn't feel like it tells the whole story to me. I'd really love to hear other people's thoughts on this matter!

Additionally, other than food, almost all of the items being sold are manufactured outside of Africa. And in fact, a fair amount of the food is imported as well. I've tried to inquire as to how the goods are distributed to the vendors once they are imported, but the vendors almost universally fail to understand what the crazy white woman is trying to ask them -- and/or they don't have a clear picture themselves! It seems that the region's main exports to make up the trade balance are groundnuts (peanuts) and, in Ghana, cocoa.