Labor Trafficking in Thailand’s Fishing Industry: Opposition between Formal and Informal Institutions Leads to Distorted Incentives for Each Other

Abstract

There exists a robust literature on both formal and informal institutions. However, what is missing in the literature is an investigation into how their interactions affect and distort incentives for each other. Using labor trafficking in Thailand's fishing market as an empirical case study, this paper uses qualitative methods to evaluate the interplay between them. It has been found that when formal and informal institutions oppose each other, the weaker one of them is, the stronger the influence of the other will be. Furthermore, formal institutions must also exceed informal ones in strength, or else they risk failing to them.