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University of St. Gallen, Switzerland

The value of poverty and informality: How entrepreneurs create informal institutions to transform poverty settings into markets


This paper focuses on how entrepreneurs residing in poor and informal settings are able to transform their contexts into markets by creating informal institutions at the cognitive and normative levels. We executed an empirical qualitative case study in La Carpio, a slum in Costa Rica near the capital city of San José, to understand how the “American clothing” market (the purchasing and sale of used clothing sourced from the U.S. and Canada) was built. We introduce a process model that highlights two theoretical contributions that aim to contribute to the literature on informal markets, collaboration between formal and informal markets, and institutional work. First, we introduce “connection with formal markets” as a key institutional characteristic of informal markets in poverty settings. Second, we theorize that collaboration between formal and informal markets emerges from the institutional work of entrepreneurs residing in poor and informal settings.


Felipe Symmes is Senior Researcher at VIVA Idea and a PhD Candidate in Organizational Studies and Theory of Culture at the University of St. Gallen. He has a Master’s degree in Development Studies from Université Paris I Panthéon Sorbonne and a five-year Bachelor’s degree in Business Economics from Pontificia Universidad Católica de Chile with a semester exchange at the University of California of Los Angeles (UCLA). His work focuses on social entrepreneurship, sustainability, informal markets, indigenous communities, and innovation. He has led consulting processes in the private, public, and civil society sectors in several Latin American countries. He is also a literary writer, having published his first book, Escritos de un hombre perdido (Writings of a lost man), in 2016, being selected as one of the ten new talents of the year by the Caligrama Prizes of Penguin Random House.

Felipe Symmes

Felipe Symmes