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Beyond the Urban Informality Discourse: Negotiating Power, Legitimacy and

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Geographische Zeitschrift, Band 99 · 2011 · Heft 1 · Seite 3–15
© Franz Steiner Verlag, Stuttgart

Beyond the Urban Informality Discourse:

Negotiating Power, Legitimacy and Resources1

PETER HERRLE and JOSEFINE FOKDAL, Berlin

In recent years informality has been defined and re-defined in the context of urban development. Evolving
from initially being understood as a ‘sector’ of the economy to currently being redefined as a ‘new way
of life’, ‘informality’ has become a rather ambiguous term. According to our understanding, many of the
current concepts of informality do not capture the complexity and importance of connectivity between sec-
tors, levels, and actors. In particular, they neglect the importance of power relations and the blurriness of
constantly negotiated and readjusted boundaries between the acceptable and the non-acceptable, legal and
non-legal. In this article, we question the usefulness of the term ‘informality’ and instead propose a set of
parameters in order to describe negotiation processes inherent to the term ‘informality’. We suggest a model
that tries to avoid the ambiguity of the informality debate. It offers a tool to understand the typically com-
posite pattern of actors and their interplay regarding the three dimensions: power, legitimacy, and resources.

Jenseits der Debatte über urbane Informalität – Muster der Verhandlung von Macht,
Legitimation und Ressourcen

In den letzten Jahren wurde der Begriff „Informalität“ im Kontext von Stadtentwicklung umdefiniert und
erweitert. Im Verlauf des Wandels von der ursprünglichen Definition als Wirtschaftssektor der städtischen
Armut zum derzeitigen Verständnis als ‘neue urbane Lebensform’ hat der Begriff seine Aussagekraft ein-
gebüßt. Die neueren Definitionen von Informalität sind zu vage, um die Komplexität der Beziehungen
zwischen Akteuren abzubilden. Insbesondere werden Aspekte wie Machtverhältnisse und die Grauzonen der
Verhandlungsspielräume zwischen akzeptablen und inakzeptablen, legalen und nicht-legalen Arrangements
nicht berücksichtigt. In diesem Aufsatz wird der Nutzen des Begriffs „Informalität“ für die heutige Stadt-
debatte in Frage gestellt und stattdessen – ausgehend von einem akteurszentrierten Ansatz – eine Reihe von
Parametern entwickelt, welche die Unschärfe des gegenwärtigen Informalitätsdiskurses vermeidet. Das vor-
geschlagene Modell bietet ein Werkzeug zur Abbildung typischer Muster der „formellen“ und „informellen“
Verteilung von Macht, Legitimation und Ressourcen zwischen Schlüsselakteuren der Stadtentwicklung an.

1 Introduction Since its introduction to the development

discourse in the 1970s the term has undergone
This is not another attempt to define or re-define considerable changes and refinements, but only
the term ‘informality’ in the context of urban in the last decade has it witnessed a revival char-
development. Instead, our intention is to propose acterized by a new level of ‘complexity’ and a
a set of parameters to describe processes that are prolific increase in meanings and contexts. Not
usually associated with the rather vague term only have various types of ‘informality’ been
‘informality’. Our claim is that these parameters identified, but also a wide range of fields where
deliver a more precise picture of what is usually concepts of ‘informality’ are employed as tools
labeled ‘informal’. to explain the functioning of economic, social
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4 Peter Herrle / Josefine Fokdal
and spatial urban development processes. In this
article we intend to question the usefulness of the
term ‘informality’, and to explore some of the
mostly unquestioned assumptions inherent to it.
From the very beginning, concepts of infor-
mality suffered from the bias caused by looking
at certain phenomena from the ‘outside’ world.
For the observers from the northern hemisphere
of the 1970s it looked like a sheer miracle that
people who were not represented in labor statis-
tics were able to survive. Similarly, in the 1980s
and 1990s urban planners pointed to slums and
squatter settlements as solutions for those who
were obviously not serviced by the housing
sector of national and local policies, a fact that
gave rise to the term ‘informal settlements’.
From understanding informality as a ‘sector’ of
the economy via the ‘continuum’ concept up to
the recent re-conceptualizations as ‘subaltern
urbanism’ (Roy 20102), the term has retained the
ambiguity and middle-class outsider perspective
that make it so difficult to accept as a neutral
theoretical concept.
This observation has led us to look at the rel-
evant phenomena from a more ‘systemic’ view,
bearing in mind that it is not possible to isolate
‘informality’ from other important factors such
as the urban social, economic and institutional
systems that determine the formation of urban
development.
It may not be by chance that the trigger for
our re-consideration of the term ‘informal’ is
not the typical city of the global South showing
signs of urban dualism such as slums vs. gated
communities, impoverished masses vs. afflu-
ence, uncontrolled development vs. prestigious
developer driven projects etc. Instead, the em-
pirical ground on which the following arguments
have been developed is the Pearl River Delta in
south China, a region not explicitly known for
loose development controls, weak enforcement
of land use and building laws or ‘informal’ labor
arrangements.
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2 Informality as a ‘sector’
The origin of the term ‘informal’ is widely
known and has frequently been reiterated
throughout the body of literature (e. g. Herrle
1982, Komlosy et al. 1997, Hall/Pfeiffer 2000,
Maloney 2004). It may suffice here to trace
some of the more influential contributions and
put them in the line of argument of this article.
The term ‘informal’ was coined in a dis-
course on the economy of developing countries
as early as the 1970s. It was first suggested in
a study by Hart (1973) on Ghana and it came
into general usage after being adopted by the
International Labor Office (ILO) in a series of
studies. The dichotomy ‘formal’ vs. ‘informal’
superseded earlier models such as ‘modern’
vs. ‘traditional’ (Weeks 1975), ‘capitalist’ vs.
‘peasant production systems’ (McGee 1971) or
‘firm economy’ vs. ‘bazaar economy’ (Geertz
1963). The characteristic trait that made the
new term so attractive was that it recognized
the transformation of pre-colonial economic
structures into those that had – at least to some
extent – been ‘modernized’ without becoming a
part of the modern economic sector. Obviously,
these informal systems provided low incomes for
urban dwellers without formal contracts or social
security and thereby helped migrants and poor
urban dwellers to survive under harsh economic
and physical conditions. The proximity of ‘in-
formality’ to poverty seemed to justify a concept
of informality as a ‘survival economy’ (Herrle
1982). Evers and his team (e. g. Evers/Schiel
1979, Evers 1981 on Jakarta, Evers/Korff 1986
on Bangkok, Evers 1987) went a step further by
applying the concept of ‘subsistence production’
to the productive and consumptive patterns of
the urban poor. They assumed that through self-
help construction of housing, infrastructure and
the ‘acquisition’ of land, subsistence production
as a mechanism outside the market economy
plays a major role in providing the urban poor
with basic goods and services.
However, as we concede in retrospect, the
limitation to poverty blanks out a whole range
of contextual conditions and phenomena that
 Beyond the Urban Informality Discourse: Negotiating Power, Legitimacy and Resources
equally escape statistics, formal procedures and
regulations. Already in the early 1980’s, in our
study on the informal economies of Davao City
in the Philippines, we were able to verify Santos’
three types of linkages to the outside world of
‘informality’, i. e. capital, wholesale and trans-
portation (Santos 1979). We also encountered
fairly big enterprises in these (and other) fields,
which could obviously no longer be labeled
as ‘survival activities.’ They showed signs of
an economy of ‘scale’ – albeit on a modest
level – but also a complex mixture of regulated
and unregulated, controlled and uncontrolled,
registered and unregistered elements (Herrle/
Lübbe/Rösel 1981). What we saw neither fit into
a simplifying juxtaposition of the ‘formal’ with
the ‘informal’ nor into the patterns of subsist-
ence production. Similar observations may have
brought some researchers to see informality as
a ‘continuum’ (e. g. Hall/Pfeiffer 2000, 71). To
our understanding this concept does not capture
the composite patterns of certain economic
activities, nor does it reflect the importance of
connectivity between sectors, levels and actors.
Moreover, it tends to harmonize the imbalances
and conflicts inherent in the social and economic
transaction processes involved.
3 From ‘sector’ to ’circuit’
Milton Santos (1979) was among the first to
widen the view from ‘activities’ to ‘systems’ by
describing the mutual dependence of formal and
informal economic circuits. He established the
model of “the two circuits of the urban econo-
my”. A chain of middlemen links the informal
circuit with the formal part of the economy.
Key positions in this system are occupied by
wholesalers, transport entrepreneurs and money-
lenders who have access to the modern banking
facilities. All three operate in both sectors of
the economy. They possess modern means of
storage, credit procurement and the necessary
supra-local radius of action to take advantage
of inter-regional price differentials. On the other
hand their position is secured over the long term
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5
by dependent clientele groups from the urban
poor communities. The further down one looks
on the ladder of middlemen, the smaller the
radius becomes, the shorter the duration of the
credit, the higher the risk and the interest rate
charged (cf. Santos 1979, 123-124) and – one
may add – the higher the dependence and the
degree of exploitation of the individual informal
enterprise.
The advantage of Santos’ approach is that it
gives up the biased one-way view on informality
and puts it in the framework of a two-tier system
of mutual dependence from which both the ur-
ban poor clientele and the middle men benefit.
He realized that “the ‘dualism’ identified by so
many authors is nothing more than the general
manifestation of the upper circuit’s hegemony,
which can be seen in more striking terms in
the guise of monopoly, on the one hand, and
underemployment on the other” (Santos 1979,
27). This is in line with a number of other au-
thors who pointed at the structural ‘symbiosis’
(Bienefeld 1975) and the interdependency of the
two circuits (Bose 1974). Building on his earlier
works McGee (2002) also refers to the issue of
inter-dependency.
While Santos’ analysis was correct for a
small part of what is understood by ‘informality’
today, namely the poverty-related phenomenon
and economic dependency, he overlooked i)
that certain patterns of informality also occur in
places (and circuits) other than those dominated
by poverty and ii) that informality cannot be
limited to the economic systems of cities only.
One of those areas is certainly the ‘informal
urban development’ discussed below.
4 Informal urban development
In parallel with the declining interest in the
‘informal sector’ debate in the 1990s, the term
‘informal’ was adopted by planners, architects
and housing experts. Since then, it has been
used to denote ‘unplanned’, ‘irregular’ or il-
legal settlements that are often (but not always)
inhabited by low-income communities and/or
6 Peter Herrle / Josefine Fokdal
rural migrants. The term ‘informal settlement’
superseded a large number of euphemistic terms
such as ‘spontaneous settlements’ (Oestereich
1980) or ‘unplanned settlements’ which gave
the misleading impression that these settlements
develop ‘spontaneously’ without planning or
strategic thinking. In many cases ‘informal set-
tlements’ illegally occupy private or public land
and do not comply with existing subdivision and
building regulations. However, since Turner’s
early studies on Lima (Turner 1967, 1968, 1972)
we know that most of these settlements are far
from being unplanned, un-organized or irregu-
lar. In Lima, up to the late 1990s new barriadas
were not only planned by professional planners
but also coordinated with the city government.
Although the early examples of Lima and
other places show that there is a ‘gray zone’
of government toleration in ‘informal’ urban
development, the legality of tenure remained an
issue both for political practice and academic
research: For politicians, illegality provided the
pretext for massive evictions. Academics such
as Payne (1999, 2002) and Durand-Lasserve/
Royston (2002) embarked on intense research on
tenure issues proving that tenure security can be
reached outside cumbersome and never-ending
legalization procedures. The importance of legal-
izing land tenure for the urban poor was further
emphasized by writers such as Hernando de Soto
(2000) who, through a neo-liberal approach,
cultivated a positive view on the ‘capacities’ of
the poor. According to this line of argument the
stigma of poverty and exclusion could easily be
overcome, if the potentials of the marginalized
were unleashed from restrictive government poli-
cies and rigid regulations and their interactions
were integrated into formal systems. Recogni-
tion, legalization and ‘regularization’ were the
standard strategies derived for urban policy.
From many countries, other forms of mid-
dle class informality are reported: In India for
example, many middle class families live in ‘il-
legal subdivisions’ in peri-urban neighborhoods
of large cities. Land is provided by developers
who illegally subdivide agricultural land for
residential purposes. Large tracts of land hous-
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ing millions of people have been urbanized in
Asia, Africa, Latin America, and the Middle East
following this pattern (See Payne 1997, 7ff., ES-
CAP 1997, chapter III for general characteristics,
Risbud 1989 on Delhi, India, Wehrmann 2005,
45-46 and 157ff. on Accra, Ghana, Santos 2003,
241ff. on Vilar Carioca, Brazil). What makes this
transformation process special is the fact that it
is widely tolerated by city officials or takes place
beyond the control of city authorities, outside
their administrative boundaries.
While definitions of informality based on the
legality of land tenure and/or compliance with
land use and building regulations may be easy
criteria for distinguishing ‘informal’ settlements
from formal ones, again, they do not consider the
typical mixture of the ‘informal’ and the formal,
nor do they reflect the ambiguous relationship
between settlers, intermediaries and city govern-
ments that seems to be endemic in contemporary
urban development in the global South. Moreo-
ver, they also tend to overlook the importance
of power relations and power plays between
various urban actors that increasingly define
and constantly re-define the blurred boundaries
between the acceptable and the non-acceptable,
the legal and the ‘not-so-legal’3.
5 Informality as a ‘way of life’
Meanwhile, although not always explicitly ex-
pressed, notions of ‘informality’ have become
part of a much wider and more theoretical de-
bate, encompassing the sensitive and sometimes
precarious relationship between state organiza-
tions, civil society, and issues of planning and
legitimacy (van Dijk/Noordhoek/Wegelin 2002,
Mitlin/Satterthwaite 2004). This has added a new
dimension to discussions about urban planning
issues and local governance (Goethert/Hamdi
1997, Stratmann 1999) and instigated a new
wave of research into ‘informality’ culminat-
ing in declaring informality a ‘new way of life’
(AlSayyad 2004). This statement is reminiscent
of Louis Wirth’s famous article “Urbanism as a
Way of Life”, which drew our attention to “ur-
 Beyond the Urban Informality Discourse: Negotiating Power, Legitimacy and Resources 7

banism” as a “complex of traits making up the actors, and a growing disembeddedness of

characteristic mode of life in cities […]” (1938, local systems?
7). Whether deliberately or not, AlSayyad’s
Following Roy (2005), Altrock (2010) suggests a
statement also recalls Jocano’s well-known
‘conceded informality’4 approach, which points
book on ‘Slums as a Way of Life’ portraying
at the way by which privileges are granted or
the lives of slum dwellers in the Philippines
negotiated in direct and indirect ways, politi-
(Jocano 1975). All three authors generalize
cized and prone to conflicts. This comes quite
what had previously been considered a marginal
close to what we have earlier discussed as key
phenomenon. By declaring urbanism, slums,
determining factors in hybrid local governance
and informality a “way of life,” they include a
systems (Herrle et al. 2005).
seemingly marginal phenomenon, which had
In terms of placing the discussion of ‘infor-
earlier been discussed along the narrow paths
mality’ into the larger context of governance,
of physical or economic models, into a broader
Etzold et al. define ‘informality’ as a “continuum
social-science context.
of interrelated social processes and practices
According to AlSayyad/Roy urban informal-
with different degrees and qualities of (in)
ity is “an urban logic”. “It is a process of struc-
formality” (2009, 4). They suggest a concept
turation that constitutes the rules of the game
of “informality as agency”, which, based on
determining the nature of transaction between
Misztal (2000), highlights the importance of
individuals and institutions and between insti-
social interaction. Etzold et al. introduce the term
tutions” (2004, 5). Taking up Wirth’s language,
‘arena’ to denote the economic, social, temporal
it has also been epitomized as a “new mode of
and physical ‘space’ that is under consideration.
urban existence” (2004, 5). AlSayyad and Roy
Their article also concedes that “the question
go on to argue that urban informality as “a co-
what is ‘informal’ and what is formal, […] can
herent mode of life in an era of liberalization”
only be answered in perspective of the actors
is not really new, but has existed since the Mid-
involved” (2009, 9). Why then re-affirm the
dle Ages and has persisted in many parts of the
term ‘informality’ with a concept that obviously
developing world.
transcends its origins by offering a much wider
The review presented above raises a number
and more coherent analytical framework?
of questions:
Thus, the more we open the term ‘informality’
– Does ‘informality’ relate to phenomena only to an ever wider range of aspects of urban life,
in an ‘era of liberalization’? Or does it exist the more difficult it seems to keep it operational
as an almost ubiquitous aspect of any urban – not only in empirical but also in theoretical
life independent of its political or economic terms. If almost everything becomes ‘informal’
of even historical formation? – which obviously seems necessary – the widen-
– Is there really something persisting? Or has ing itself may eventually erode and destroy the
‘informality’ always – as AlSayyad/Roy usefulness of the term.
(2004) rightly concede – been there as an
integral part of urban formations?
– If ‘informality‘ is no longer associated with 6 Informality – a myth?
urban poverty nor with illegality, nor with the
control of processes, as in the early days of A myth typically tries to provide an explanation
the debate, what is it then? for things that are intransparent for one reason
– How can we operationalize the term ‘infor- or the other. Frequently myths help sustain tradi-
mality’ as a “mode of life” or a “mode of tions. In retrospect, i. e. once myths have been
urbanization” (Roy 2005, 147) in an era of revealed as such, they seem to have prevented a
globalization of production, growing impor- more rational view on certain phenomena, fresh
tance of networks, changing landscapes of thinking and new concepts. By definition, myths
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8 Peter Herrle / Josefine Fokdal
have to have a ‘soft’ core and be conservative.
Without a certain degree of vagueness they
would lose their attractiveness. Why then is the
concept of ‘informality’ a myth?
To our understanding the term ‘informality’
helps sustain myths about urban phenomena for
a number of reasons:
– The proliferation of new ‘informalities’ of-
fered in recent writings provides ample evi-
dence of the structural ambiguity of the term
and its ever-changing formations. Current
concepts of ‘informality’ cross the border of
the conventional stringent definitions at the
cost of giving up the claim for an exactness
and clarity. Some of them obviously play with
the vagueness of connotations and meanings
in different fields of knowledge.
– The concept still retains the problematic
legacy of its founders: If not clearly defined
(and narrowed down to operational terms),
‘informality’ remains something inside the
‘black box’. We do not know exactly what is
happening inside, but we assume that there
must be something that does not follow the
logic of the outside. In trying to describe the
inside we find ourselves among unique cir-
cumstances that cannot easily be generalized.
– There is a tricky mechanism in using the
concept ‘formal-informal’: It almost inevita-
bly re-establishes a dichotomy that so many
observers claim to have overcome.
Our conclusion has not been to discard the at-
tempts to further define and develop coherent
concepts of ‘informality’ for specific sub-groups
of an urban society, but rather to move towards
a more complex explanatory model that tries
to avoid the latent ambiguity of the informality
debate. For a number of reasons the model we
suggest cannot be developed from ‘inside’ the
informality discourse. These reasons include:
As emphasized in the recent informality
discourse, phenomena of ‘informality’ occur
beyond poverty and exclusion, economy and
settlement, private and public, state and civil
society. Following the recent debate, the term
describes a ‘mode’ shaping physical as well as
social and political environments in cities.
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There is an increasing recognition of the
importance of connectivity of various urban
subsystems (at various levels) including interac-
tion between systems as factors determining the
patterns of how resources are distributed and how
access to services in cities is granted; this calls for
a shift of interest toward governance processes.
As many authors have stated – informality is
nothing new. As an un- or less regulated part of
state organization, it has been part of the every-
day urban life in societies (not only in urban ar-
eas) throughout history. Regulative mechanisms
were often kept to a minimum in ancient Asian
as well as medieval European cities5. Societies
were organized around ‘informal’ arrangements.
Despite all efforts to formalize urban life and
development, the formal systems seem to rep-
resent just the tip of the iceberg on a broad base
of all kinds of unregulated, partly regulated or
de-regulated subsystems of the urban society.6
7 Beyond informality
If we leave the inherent deterministic conno-
tation of the formal-informal dichotomy (or
the ‘continuum’ as its modification) behind,
we realize that in cities there are a number of
mechanisms or subsystems that, in a more or
less permanent way, organize and secure the
(unequal) distribution of resources, the (unequal)
access to services and the (unequal) distribution
of power. Depending on the political system,
economic conditions, social and cultural tradi-
tions, effectiveness of the administration etc.
there may be countless variations in how the
result is achieved, but in most cases there is a
constant process of negotiation.
What we see here appears as a reiteration of
the 1980s debate, when the term ‘informality’
was branded as an explanation of why so many
people still exist in cities with staggering econo-
mies and live under devastating living condi-
tions. Currently we are encountering a similar
‘miracle’ at the collective level. Why are cities
still functioning (and continuing to be attractive)
although their government systems are weak,
 Beyond the Urban Informality Discourse: Negotiating Power, Legitimacy and Resources
plans are not implemented, their population
shows an increasing social divide, and a coherent
management structure is not in place? The gen-
eral experience is that in many countries, large
cities would long have collapsed, had there not
been certain clandestine factors keeping them
together and granting economic progress and a
minimum of coherence (cf. Mertins 2009, 59).
The reason seems to be that cities are being
produced by not just one group nor are they
planned and implemented by planners or politi-
cians alone; they are rather the common product
of a wide range of actors, some of which are
known and understood, others are less known,
but play an equally important role. The result
is by no means a neutral one, it is rather based
on the power play and ‘negotiation’ between
‘collective actors’ as it has been suggested by
scholars such as Scharpf (1997) and earlier by
Mayntz (1963). Herrle et al. (2006) argue that
negotiation and consensus-building form vital
parts of contemporary local governance systems
particularly in the global South. This view is
also reflected in propositions of the new insti-
tutionalism which ascribes conflicting interests
to actors that are interdependent. A theoretical
concept supporting our approach is also the inter-
institutional model of clientelistic relationships
developed by Pierre (1999) and DiGaetano/
Strom (2003) and consolidated by Ley (2010).
Negotiation as we understand this term does
not necessarily involve face-to-face contact:
There may be numerous forms of indirect in-
fluence on decision-making processes in which
media coverage, financial pressure, mobilization
of masses may sometimes be the better than
those made by representatives at the negotiating
table (see also Benz 2007). In the governance
discourse of negotiations, it is most often as-
sumed that the aim of negotiations is to achieve
an optimized situation for the general public
(Benz 2007) however this is not always the
case. As found in our research in the PRD, ne-
gotiations between several stakeholders are often
neither a matter of acting nor of solely reacting,
but rather something in between. Furthermore,
the individual interest is often the motivator and
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9
the common profit is just a side product of the
maximized individual gain, as also described by
Börzel (2007). The concept proposed in chapter
8 draws on these approaches.
8 The regime-matrix: power, legitimacy,
resources
The regional focus of studies on ‘informality’ has
mainly been on Latin America, South Asia and
the Middle East (AlSayyad/Roy 2004, Etzold et
al. 2009, de Soto 2000) and on countries with a
significant degree of social exclusion and urban
poverty. In our study on the Pearl River Delta
(PRD) in South China, we observed phenomena
that may well be attributed to what is usually
labeled as ‘informal’: tolerated and systematic
violation of building regulations, blurred re-
sponsibilities, illegal land and labor markets,
intransparent and fragmented decision-making
procedures, uncontrolled transfer of land use
rights etc. However, in this environment neither
urban poverty nor subsistence production plays a
significant role. If at all, ‘informality’ can be de-
tected as a mode of urbanity inherent to growth
patterns and processes. Under the special cir-
cumstances of Chinese economic liberalization
since the mid 1980s and the special conditions
of the Pearl River Delta it seems that a certain
level of de-regulation was conducive to local
initiative and economic growth. Especially the
‘urban villages’ (chéng zhong cūn) as parts of
cities or located in peri-urban areas enjoy certain
privileges and benefit from loose control (see
Herrle et al. 2008).
Our case of the urban villages in the PRD
provides a good example for ‘negotiated’ assets.
Urban villagers, as a collective, and based on
their collective legitimacy (and as long as they
are ‘defined’ as rural) hold large resources of
land as an economic asset as well as a source
of power (Wu 2009, Liu et al. 2010, see also
Fokdal/Herrle 2010 for a summary account
on land legislation and negotiation processes).
Investors and developers from Hong Kong
seek access to these resources, as do the local
10
authorities. However, the process of leasing land
directly to investors and establishing industries
(circumventing the local government) is illegal.
Moreover, on an individual level, the villagers
are seeking to optimize their profit by building
housing for legal and illegal migrants working
in the surrounding industries. The emerging
structures supersede the building regulations in
terms of height, densities, land use etc. The vil-
lagers thereby provide a service (housing) that
is solving the housing problem of huge numbers
of migrants who are not taken care of by the lo-
cal government. Since economic development
is generally welcome, local governments tend
to tolerate the situation, even though it implies
violations of existing regulations and constitutes
‘informal’ processes. In fact, they are actively
involved in those negotiation processes. They
benefit from the informal housing provision
since it lowers the risks of social unrest from
the side of migrant workers and at the same
time saves resources for investment in basic in-
frastructure (transportation, energy etc.) needed
for the booming economy. The emerging system
can be interpreted as a fragile and permanently
re-negotiated balance of interests involving vil-
lage collectives, investors/developers and local
governments as the key actors. It is a process that
is self-‘regulated’ in the sense that it is driven by
its inherent dynamics and ever changing rules,
and constantly oscillating between what is often
labeled as formal or ‘informal’.
Obviously, the classical concepts of ‘infor-
mality’ cannot capture a situation as described
above. This is one of the reasons why we resorted
to regime theory approaches as suggested by
Stone (1989, 1993). Although the growth ma-
chine and the importance of the business sector
in the USA have influenced the regime theory
approach suggested by Stone, it seems to provide
a valuable entry point for explaining the general
modalities of actors, their mutual relationships
and interactions. According to Stone, the regime
where interests and actors meet constitutes for-
mal and informal negotiation processes (1993).
Starting from Stone’s approach we felt it nec-
essary to further structure the regimes in which
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Peter Herrle / Josefine Fokdal
these processes occur. Drawing on an earlier at-
tempt (Herrle et al. 2006) and backed up by our
research in the Pearl River Delta we suggest a
set of three parameters that may help to describe
the process of negotiation more precisely than
‘informality’ approaches can: access to 1) power,
2) legitimacy, and 3) resources. They form the
key parameters of local governance systems
(Herrle et al. 2006) and local regimes. Typi-
cally, governance systems in large urban areas
show a composite pattern of antagonistic actors
collectively providing inputs related to these
parameters in a more or less complementary
way that keeps the system as a whole together.
There may be more factors currently in use
to describe the division of actors and their roles
(see Risse et al. 2007). We assume, however, that
the three parameters shown in this matrix are
sufficient to adequately depict specific constella-
tions of actors. For our purpose we have arranged
these three parameters in a matrix by combining
them with a set of actors. It is meant to capture
‘formal’ as well as ‘informal’ interactions and
the key actors deriving from an actor analysis.
It may be worth noting that what is presented
below is not a normative model, but a matrix
displaying roles and relationships of various ac-
tors in a certain field. There is neither an attempt
to derive a ‘best practice’ nor to conclude that
certain combinations of distributions of assets
are better compared to others. What has been
categorized as ‘formal’ or ‘informal’ appears as
a property or capacity ascribed to a certain group
of actors. As a standard matrix to demonstrate
the concept we have correlated the parameters
with three groups of generalized actors7 taken
from our study on the Pearl River Delta. They
present a simplified set of actors that may well
be modified and specified from case to case.
Inasmuch as a setup of actors and their inter-
play of roles and activities is able to grant basic
standards of security, social wellbeing, equity
and general economic prosperity, they are usu-
ally accepted as a way to organize resources,
power and legitimacy in an efficient albeit com-
plex and sometimes confusing way. Moreover,
a ‘composite’ set of actors making differing
 Beyond the Urban Informality Discourse: Negotiating Power, Legitimacy and Resources 11

State Investors, Developers Urban villages

(City government) as collectives
Power Power to plan and imple- Power through capital to Power to implement
ment infrastructure, to negotiate with the city gov- projects and manage firms
acquire land classified as ernment and with the urban (global network), occa-
‘rural’, to demolish illegal villages. sionally strong negotiation
housing. power vis-à-vis city govt.
through media support.
Legitimacy Strong legal position by Limited (guarantor for Strong legitimacy base in
law. Decisions not always progress and modernity). village collectives/village
accepted by local people committees avoiding social
and villagers, pressure on unrest by housing migrants
participation, pressure on - allow for illegal building
modernization processes. and land use.
Resources Rich but not unlimited, Capital, knowledge. Limited financial resources
dependent on overall eco- (based on revenues from
nomic situation and rev- collectively run businesses
enues from land leasing of and rented factory build-
land classified as ‘urban’. ings).
Land (rural or EDL* - as
the most important asset is
dwindling).
High level of influence on the negotiation process
Moderate level of influence on the negotiation process
Low level of influence on the negotiation process
No or limited influence on the negotiation process
* The farmlands of former rural collectives are acquired by the city government and turned into state-owned land
(urban land). In return, the Guangdong provincial government requires 8-12% of the former farmland to be returned
to the urban village as economic development land (EDL) (Wu 2009, Liu et al. 2010)

Fig. 1: The regime matrix: power, legitimacy, resources, a simplified example from the Pearl River Delta

contributions to general welfare and basic values
seems to form the rule rather than the exception
in the governance of many countries including
Europe8 and North America. It is typical that
the equilibrium between actors and the level
of their command over power, legitimacy and
resources cannot be kept static for a long time.
It is constantly being re-negotiated and part of
the development process itself.
The power parameter tells us something about
the distribution of power between various actor
groups. Without a minimum of power there is no
implementation of projects and on the other hand
no resistance against power from other groups.
Although in a democratic state power is assumed
to be vested with the government, there is plenty
of room for investors, pressure groups and the
civil society to exercise power and thereby push
their own interests to the forefront. Power is also
needed to enforce regulations and maintain law
and order.
The legitimacy parameter is an important
asset when it comes to implementation. In most
countries law-based legitimacy is not sufficient,
and even powerful actors would risk the break-
out of open conflicts if they have no legitimacy
base within the civil society or other powerful
groups. Typically, in many cities of the global

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12
South legitimacy bases are fragmented not only
along party lines but also within social, ethnic
and economic groupings. This may lead to al-
ternative arrangements and alliances.
The resources parameter indicates the avail-
ability of human, technical and financial re-
sources (incl. information) needed to provide
services and implement projects. In many cases
local governments are poor both in terms of
technical capacity and human resources and have
to rely on financial support from investors. This
in turn might undermine their legitimacy basis
with the civil society or certain groups therein.
Obviously in cases where ‘informality’ be-
comes immoral, criminal and detrimental to gen-
erally accepted values of human development,
or in the situation of ‘failing states’ the matrix
shows a shift of all three assets, i. e. power,
legitimacy and resources towards fragmented
(maybe rivaling) non-state actors.
We are aware that the parameters presented
here are not new. They have been brought up in
various discourses. However, in the context of
our discussion they have the potential to reveal
the dynamic relationships between actors and
translate into more precise terms what has been
disguised as ‘informality’. Now, where is ‘infor-
mality’, after all? As has been said at the outset
of this paper: Our claim is not to add another
definition for ‘informality’ but rather to develop
a tool that contributes to a better understanding
of the processes underlying phenomena super-
ficially labeled as ‘informal’.
9 Conclusion
In rapidly changing societies, the half-value
period of theoretical constructs describing
certain aspects of urban formations is becom-
ing shorter. This also applies to the concept of
urban ‘informality’ as it has developed since
the 1970s. Many of the ‘informality’ concepts
are transcending the original dichotomy and the
notion of urban poverty that has been associ-
ated with it in the early writings. As the term
‘informality’ has developed from solely defin-
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Peter Herrle / Josefine Fokdal
ing an economic phenomenon to include spatial
structures and processes, towards ‘a new way of
life’, it has become a blurred term – a myth. What
has often been defined as ‘informality’ seems
to be an almost ubiquitous aspect of any urban
life independent from its political or economic
or even historical formation.
Therefore, we suggest moving away from
the term ‘informal’ with its inherent duality and
poverty connotations, towards defining negotia-
tion processes by discussing related phenom-
ena through a set of three parameters, namely:
power, legitimacy, and resources and put these in
the framework of an actor analysis. It may still
be too early to say whether these three dimen-
sions will suffice to capture urban development
trends elsewhere, but at least for the case of the
Pearl River Delta we claim their usefulness for
understanding the urban dynamics. What we
find in the PRD provides an example for vari-
ous stages of development and different forms
of territorial organization of resources. It keeps
systems incoherent, fluid and versatile, provid-
ing the systemic potentials to quickly adapt local
economies and social systems as well as physi-
cal structures to global forces of development.
The strength of those flexible systems derives
from their ability to adapt and change and – at
the same time – conserve or develop the stabil-
ity and the level of coherence needed to create
a reliable framework for social and economic
interaction and investment. The emerging pat-
terns are characterized by permanent negotiation
among stakeholders and constantly shifting
power relations.
In such an environment the search for ‘infor-
mality’ becomes a futile and obsolete exercise,
the term itself loses its relevance as an explana-
tory model. In as much as basic characteristics
of urban development in the Pearl River Delta
are also valid for contemporary urban develop-
ments elsewhere we believe that it may be worth
applying the tool to other countries as well and
thereby developing it further.
 Beyond the Urban Informality Discourse: Negotiating Power, Legitimacy and Resources
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Authors: Prof. Dr. Peter Herrle, Habitat Unit A53, Faculty
VI, Planning – Building – Environment Berlin, Institute
of Technology, Straße des 17. Juni 152, 10623 Berlin,
E-Mail: peter.herrle@tu-berlin.de
Josefine Fokdal, Habitat Unit A53, Faculty VI, Planning
– Building – Environment Berlin, Institute of Technology,
Straße des 17. Juni 152, 10623 Berlin, E-Mail: josefine.
fokdal@tu-berlin.de

1 This article presents thoughts that have been developed in a research project on Urban Villages in the Pearl River
Delta within the framework of a DFG Priority Program on „Megacities – Megachallenge. The Informal Dynamics
of Global Change“. We wish to acknowledge the support provided by the DFG.
2 Ananya Roy on a colloquium of Priority Program „Megacities – Megachallenge. The Informal Dynamics of Global
Change“ in Berlin on May 10-11, 2010.
3 In many countries where an official land title is beyond the reach of poor settlers, paying water or electricity bills is
a common way to create some sort of tenure security. Subletting of structures in settlements on illegally occupied
land is another form of the blend of legal with illegal. “Invasions” that are publicly announced and even invited
by the mayor as was practiced in Lima in the 1990s (Klaus Teschner, personal communication 1999) are a way of
guiding development through ‘informal’ planning.
4 Uwe Altrock on a colloquium of the DFG funded Priority Program “Megacities – Megachallenge. The Informal
Dynamics of Global Change“ in Berlin on May 10-11, 2010.
5 Interestingly Max Weber’s writings on the city (1921) appeared under the title „Die nichtlegitime Herrschaft“ [The
Illegitimate Mode of Rule]. Weber saw the medieval bourgeois „Zweckverband“ as emerging outside the traditional
legitimate patrimonial system – i. e. in terms of the formal-informal dichotomy as something ‘informal’.
6 Goethert (2005, 19) asks himself: “The customary perspective has been from the formal sector. But in the context
of our helplessness and the dominant role of the informal [sic!], who then is excluding whom? Perhaps it is us, the
minority formal sector of development planners that are the excluded and irrelevant?”
7 For the purpose of simplification we have defined the actors according to the Chinese system, however, we are
aware of the dynamics and moving actors, shifting roles etc. (see Ley 2010).
8 Rostalski in his dissertation (2010) provided a detailed analysis about the inter-relationship between formal urban
planning and informal occupation in the process of re-developing an abandoned 19th century industrial area in
Berlin, the RAW-area.
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