Street Markets in La Paz and São Paulo

Chapter 4 tells the history and structure of street vending in two municipalities in the La Paz department of Bolivia and two districts in the São Paulo state in of Brazil. This chapter demonstrates how officials actively intervene in informal markets and workers’ organizations, and suggests how those interventions vary over time, creating highly structured organizations around La Paz and fleeting organizations around São Paulo. The chapter then develops the specific incentive structures that officials and workers face. Chapter 4 grounds the game theoretic model’s assumptions in observations from street markets in La Paz: It shows that unorganized street vendors create negative externalities, that street vendors approach collective action decisions with a cost–benefit analysis, that officials offer private benefits to organized street vendors, especially leaders, and that once organized, street vendors self-regulate and bargain with officials.