Even when size is not used as a criterion of the informal sector definition, many studies note a very strong correlation between the size of an activity and its informality. For example, Dabla-Norris et al. (2008) find a strong positive correlation between the size of the business and its status as formal or informal. Benjamin and Mbaye (2012) found the same correlation between firm size and status, but they refute the idea that the size criteria can by itself be used as the single defining criteria of the informal sector. Based on survey data coming from three countries (Benin, Burkina Faso, and Senegal), they find a significant number of large firms that nonetheless remain in the informal sector in this part of Africa. They conclude that even when size is considered in the definition of informality, it must be combined with other criteria to have a good understanding of the phenomenon. Similarly, Gelb et al (2009) demonstrate from a database of 7 southern and eastern African countries that among the micro firms in their dataset, a large number are actually formal enterprises, and thus defining the informal sector based only on firm size is not applicable.

# **The registration criteria**

Registration with a government agency is also often used as a defining criterion of the informal sector. Yet, the question of what type of governmental body is being considered remains here: is it the central or local government, the administration in charge of collecting taxes or another one? Gelb et al (2009) use registration with tax authorities as the criterion.

For La Porta and Shleifer (2008) the simple criterion of registration does not suffice to qualify a firm as formal. Among informal firms they distinguish between two categories: firms that hide by concealing themselves from the police, the fiscal administration, or other authorities, and firms that conceal a portion of their output even though they are registered. Thus they propose other criteria to define the informal sector and to measure its weight in the economy: the proportion of small firms and micro enterprises in the economy, the male participation rate in the work force, the proportion of workers who are selfemployed in the non-agricultural economy, the proportion of workers who contribute to social security, the consumption of electrical energy, the mass of currency in circulation. The problem with these criteria is that they bear more relation to making comparison of national economies and give rise to fewer applications of firm-level survey data.

Focusing on Africa, Steel and Snodgrass (2008) refute the notion of the informal sector as an entity unknown to the fiscal authorities. According to them, informal activity is well-known and taxed by public powers that often allocate the stands that informal firms use for their business at the public market. Benjamin and Mbaye (2012) point out the presumptive tax that applies to the informal sector in Africa. They demonstrate from the tax database that even certain very small, informal firms without a known location are sometimes identified and listed by the tax department in Senegal. According to them, the registration and administrative recognition criteria are not easily applied, because even if informal firms are not always recorded at the level of central authorities, they are recorded at the local level where they also pay taxes.

# **The compliance-with-public-regulation criterion**

This criterion is mostly developed by Kanbur (2009). According to him, state intervention is the central defining variable of informality. He simultaneously uses regulations and their enforcement to define informal activity. According to economic agents’ attitude towards the introduced regulations, he identifies four different possibilities for economic agents’ actions: 9