Integrating the Informal Economy in Urban Development: The Politics of Transport Formalization in East Jerusalem

Public transport is a critical pillar of ‘the right to the city’ for lower-income groups with limited access to cars in the global south. The state often lacks the political will or financial resources to provide it, and the gap is filled by private operators. While informal transport has substantial drawbacks, exploiting labour and often being unreliable, dangerous and expensive, there is a growing understanding that these services, and the informal economy more broadly, need to be included in delivering equitable urban development.

This study analyses the 10-year process of integration of Palestinian informal transport in Jerusalem by the Israeli government, which has been accused of marginalizing the Palestinian population of the city, but which is also responsible for daily services. Based on a survey of the eight separate operators, and interviews with regulatory bodies, passengers and community organizations, the research aims to theorize the motivation and ability of the formal state to incorporate informal operators, analyse which ones benefit, and understand under what circumstances this translates to improvements for passengers.

We find that the atomization that characterizes the informal transport sector undermines efficient planning from the point of view of the regulator, but also retains a locally-controlled service for neighbourhoods. This allows communities to maintain themselves as ‘urban islands’ by limiting mobility options, acting both as a source of autonomy under an occupying power, and shoring up local power structures. The state, meanwhile, requires operators conform to its norms in terms of technology, culture, management and politics, and it is able to increase regulation by providing funding conditionally, but shifting responsibility and accountability towards passengers onto the operators. Those with higher initial skills and capital are able to consolidate, professionalize, and effectively access state resources, while others – and the communities they serve - are left out.