Informal Governance and Organizational Success: The Effects of Noncompliance among Lima’s Street Vending Organizations

The successful representation of poor people on the part of membership based organizations depends partly on internal governance structures that are responsive to members’ needs and aspirations. Among organizations of informal workers, members depend on their leaders to channel their demands and influence government policies that affect their livelihoods. Yet not all organizations of informal workers have successfully achieved such influence. This paper examines twelve organizations of street vendors in Lima, Peru, and assesses their ability to achieve organizational ‘success.’ It suggests that a lack of compliance with internal governance rules and procedures has kept their successes limited. Informal governance practices within organizations can reduce leaders’ accountability and credibility in the eyes of the membership; increase the incentives for members to exit the organization in favor of forming new ones; and damage the credibility of leaders in the eyes of external actors, most importantly the policy makers who have a profound influence on poor people’s lives.