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Methodology
In order to show the diversity and degree of organization of street
vendors, three types of vendors were studied: 1) street vendors selling
in street markets on a daily or periodic basis; 2) itinerant vendors who
operate in the subway system; and 3) former street vendors who have
moved to a more formal way of doing business.
Street Vendor Diversity
Street vending in Mexico City is characterized by a heterogeneous
modus operandi. Street vendors can belong to a group of merchants
working in the tianguis markets or to a group of merchants known as
ambulantes.
The tianguis markets specialize in basic goods, such as fruits and
vegetables. Tianguis merchants work an assigned route, visiting a
different neighborhood each day of the week, meaning that they work
the same neighborhood 52 days out of the year (Secretaria de
Desarrollo Económico, 1997). Vendors assemble and disassemble
their mobile stalls every day. This group is regulated by the
government through the Supplies Commission, known by its Spanish
acronym COABASTO, and by other government authorities such as
public health officials.
Ambulantes are characterized by the following: 1) they work in
the same location year-round and their stalls are often permanently
anchored to the pavement in violation of city ordinances; 2) they often
specialize in electronic products or imported goods that are of a
secondary or luxury nature such as stereos, costume jewelry, cassettes,
etc. (CANACO, 1987); 3) they locate in places with a high flow of
pedestrian traffic such as outside subway stations, near main bus
stations, or on busy streets.
A pilot survey of street vendors was undertaken in the summer of
1997 to identify general themes. The study included informal markets
in the Mexico City neighborhoods of Downtown, Tepito, San Juanita,
Ciudad Nezahualcoyotl - hereinafter Ciudad Neza - and other areas of
the city. Then, in the summer of 1998, three markets - Tepito, San
International Journal of Sociology and Social Policy 40
introduced without paying import duties. Until the 1994 passage of the
North American Free Trade Agreement (NAFTA), which opened
Mexico to a larger quantity of imported goods, Tepito enjoyed a
quasi-monopoly on electronic products such as television sets and
video recorders. Tepito is located in the heart of Mexico City’s
downtown - a hub of wholesale and retail commercial activity.
Government oversight in this market was almost absent, which
strengthened the influence of vendor organizations over market
operations.
The other two vendor groups (San Juanita and Ciudad Neza) are
part of the city program to distribute basic products to residents.
Government authorites regulate these markets for such things as
hygiene, location of vendors stalls, and accuracy of scales used to
weigh products. Produce is the magnet commodity for these markets.
Although other products, such as clothing and shoes, can also be
found, they are only complementary to the magnet commodity
(Secretaría de Desarrollo Económico, 1997). In short, the function of
this type of market is to bring basic products at a low cost to different
residential neighborhoods.
Itinerant Vendors
Itinerant vendors operating in the trains of the subway system are the
second group included in the research. Although itinerant vendors are
forbidden by law from selling inside subway stations and trains, in
recent years they have invaded both.
were left out and those who could afford it began transforming
downtown tenements into commercial plazas. The former street
vendors covered by this study inc lude both those in
government-sponsored plazas and private plazas. Former street
vendors were included in the study as a comparison group to help
explain the benefits and limitations of street vendor organizations as
regulators.
Cross (1998) correctly points out that among informal activities, street
vending is perhaps one of the most visible, especially in Mexico City
where street vending has increased over the past two decades. The
visibility of this sector to government, formal business, neighbors,
pedestrians, and others makes vendors a susceptible target of local
government policies.
The peanut seller model draws on the land rent theory. The land
rent theory states that in a world of free market competition, land (and
location) is allocated to the highest bidder and assigned to the highest
and best use. Under this theoretical framework vendors with the
highest ability to make profit and protect their territory will be the ones
who control the best locations. Protecting territory can entail bribing
government officials or police, hiring a bodyguard, or purchasing
some other form of protection such as a gun. The result is social chaos
as shown in table 1.
S.D. .3972
their scales calibrated... In addition to the above, the work of the leader is
to find a balance with the community or neighborhood where we work
each day of the week. Also [the leader] goes to the work meetings with
other leaders to find mechanisms of defense since the authorities want to
restrain our activities...” (Velásquez, July 29, 1998).
Frequency Percent
Itinerant Vendors
channel to get a fixed and secure location in the street. Success depends
on the merchant and the product.” (interview in summer of 1998)10
In the early 1990s, Mexico City’s government policies of
removing street vendors from downtown forced a considerable
number of vendors in this group to choose between relocating to areas
with low economic value for commerce or finding ways to stay closer
to their original location. Individual vendors contracted with owners of
vecindades (downtown tenements) to use tenement courtyards for
commercial purposes, and vendors transformed these courtyards into
commercial plazas.11
The leasing procedure worked in different ways: some vendors
signed leases with the building owner while others signed subleases.
Typically, in Mexico, there are two components in a commercial
agreement - an initial entry fee and rent. The entry fee is known as
traspaso or transfer of rights from one person to another; in addition to
the traspaso, the merchant agrees to pay rent.
The initial entry fee could range from as low as 1,500 to 120,000
new pesos depending on the location and size of the establishment; the
mean of the initial entry fee is 24,041 with a median of 12,000 new
pesos. At the time of the survey in 1998, vendors were willing to
transfer their business for a minimum of 10,000 to a maximum of
120,000 new pesos and the mean was 70,000 new pesos. This indicates
that vendors were willing to transfer their business at a rate 27.2%
higher than the original entry fee. Additionally, vendors who acquired
their businesses when the commercial plaza was first established have
a higher pay-off than those who arrived after the commercial plazas
had already acquired some degree of commercial success. The
research showed that monetary barriers in this group are higher than
for the other vendor groups but the risk and uncertainty of property
rights are low.
Conclusions
This study has challenged the simplistic notions that the option for the
regulation of street vending is simply between the social chaos that a
laissez-faire approach generates and the benign action of the State to
Volume 20 Number 9/10 2000 59
correct market failures. The study has shown that social institutions
can also provide regulatory services that the state would normally
monopolize. Informal markets show how market activities can also be
regulated through social norms and practices, creating competing
models of regulation. On the one hand, authorities attempt to
implement something close to the government regulatory model which
would require a high degree of state integration where state agencies
and agents share the same objectives and interests. In reality that is
rarely the case in Mexico City and perhaps the attempt to enforce such
a model only increases the amount of corruption as social institutions
and mafias are forced to work against the government. On the other
hand, street vendor organizations operate under different models with
characteristics similar to both the socio institutional regulatory model,
as in the case of the tianguis, and the mafia regulatory model in which
itinerant subway vendors operate.
The implementation of a model such as the government
regulatory model would require stronger state integration if the
administration is going to achieve its goal of deterring the growth of
the informal sector. However, it was shown that organizations already
perform some government functions in a cost-effective manner. The
research showed that vendor organizations lower street vendor’s
transaction costs, whereas the reorganization program that the
government implemented has increased the operation cost of street
vendors. Thus, the question that emerges is why vendors should accept
government regulation proposals when for years their respective
organizations have provided some form of protection and regulation in
a more efficient manner. In short, the marginal costs that government
regulation or programs impose on the vendors are greater than the
marginal benefits that vendors obtain from them.
The government in Mexico City finds itself in a dilemma. The
government wants to replace street vendor organizations and take over
the control and regulation of street vending. However, it is clear that
social institutions have achieved some degree of success as alternative
regulatory mechanisms. The biggest challenge for the government in
Mexico City is how to become relevant by offering policy options that
International Journal of Sociology and Social Policy 60
Endnotes
1. I would like to extend my most sincere thanks to John Cross for his
comments and time which helped me to refine the ideas and get this
article ready. Also, I would like to acknowledge my wife Sally Spener
for her help in editing the final draft.
2. Cross defines state integration as “the degree to which the interests
of state agents (policy implementers) are integrated into the policy
objectives of the state.” (1998: 44)
3. The term “rent” is used to refer to the economic benefits that a
person draws from a certain location in the street.
4. The leader of San Juanita pointed out that they once won a
relocation legal battle with the respective authority. They won a court
injunction to bar enforcement of an order from the delegation or local
government to force the vendors to move to another location
(Velasquez: July 29, 1998).
5. The functions of street vendors were identified in the pilot study by
the author; then, the follow-up study asked the vendors to evaluate
those functions and others that the author considered appropriate. For
more on this issue, see Peña (1999).
6. After an interview in the summer of 1998 with the leader of the
mobile markets in Ciudad Neza, the leader invited the researcher to
stay at the meeting that he holds every Monday at 6.00 pm. People at
the meeting went to explain their problems. One person asked for a
space in the market as a condition of joining the organization; the
leader responded that people needed to become members as a
condition for obtaining a fixed space in the work area. Other people
requested permission to be absent without sacrificing the rights to their
spaces. The leader acts as a judge and makes final decisions. He listens
to the person’s problem and, at the same time, listens to the delegados
or subordinates who help him in his function and then makes a final
decision.
7. Legal scholars (Schuck, 1992; Jacobson, 1994; Kaufman-Winn,
1994; Priest, 1994; Austin, 1994) point out that within the informal
International Journal of Sociology and Social Policy 62
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Interviews
Aranda, L. (July 23, 1998) Head of Street Vending Reorganization
Unit in Venustiano Carranza.
Barraza, L. (July 27, 1998) Head of the Reorganization Program in
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Nieto, G. (August 10, 1998) Leader Organization Neza.
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