Economic Potentials of the Informal Sector in Promoting Local Economic Development in Cities of Developing Countries: A Study of Dodoma City in Tanzania

Unlike in the developed world where economies of cities much depend on the formal sector to boost their economic development, economies of cities in developing countries still depend on both the formal and informal sectors. In fact, literature shows that in some of the cities in developing countries, the informal sector is continuously expanding and larger than the formal sector. In addition, literature also shows that the informal sector through its economic potentials has the potential to promote Local Economic Development (LED) in cities where the sector does appear to be dominant. In view of these theoretical propositions, this study was carried out to empirically determine the extent to which informal economic potentials were promoting local economic development in cities of developing countries. Specifically, the study made use of Dodoma City in Tanzania in exploring this subject matter.