FRIEDRICH-EBERT-STIFTUNG – A majority working in the shadows How do the informally employed come into this picture? Part of the reform has to aim at improving how the informally employed and the state interact. There is a moral duty to improve access to these services for informally employed people. But also, more fundamentally, there is the potential (if not the need) to find ways to achieve more constructive relationships between these actors, as a necessary step, for any reform in this area to be successful and sustainable. The issue, as with any reform affecting the fiscal contract, con­cerns the degree to which proposed reforms are politically and fiscally feasible(Burchi et al. 2020). The results presented in this chapter give some indications that might be useful in assessing and potentially expanding the scope for these reforms. The first conclusion is that there is a demand for reform aimed at a more comprehensive social state: the informally employed consider that working on policy areas such as health care and education should be a priority. The second conclusion, however, is that trust in political parties and trade unions as particularly relevant intermediary institutions tasked with aggregating interests and coordinat­ing collective action at the national political level, are rated badly in relative terms. There seems to be a feeling that these institutions care little about the policy priorities and that they have little capacity to change things significantly. This is bad news for anyone supporting such reform(espe­cially if conceived as a democratic and participatory process). Given these perceptions, it is safe to expect that there are only moderate incentives to engage with and support these institutions. Given that these intermediary institutions are es­sential to generate a socio-political environment in which to identify the scope for comprehensive reform towards more inclusive social protection and health systems, as well as to sustain any reform efforts, the current situation calls rather for pessimism. The data suggest that these institutions are far from being backed from the informally employed and there­fore lack the power and legitimacy to shape the agenda. It is important to analyse in the individual context whether these perceptions are legitimate or simply negatively biased perceptions in order to discuss remedies in the countries. But, regardless of the reasons, it is crucial to acknowledge the ret­icence of the informally employed towards these institutions. strongly support a vision of the state that supports the poor, regardless of their heavily restricted or even inexistent capac­ity to contribute to the fiscal effort. All these results are important in terms of assessing the scope for different policy proposals to resonate with the informally employed. In any case, these are trends in the overall data, and any attempt to identify the scope for reform should be based on detailed analysis and highly contextualized. All in all, the predisposition of the informally employed to support reforms in this area, as well as to help finance them with tax contributions seems not to be the main obstacle. Far more problematic appears to be creating a socio-political environment in which to pursue and sustain a reform effort. Revenue and spending policy are not purely technical do­mains and mirror goals that are defined in the socio-political realm. Improving health and social protection systems is also not a purely technical discussion and in fact could be defined as a collective action problem. There seems to be an agree­ment that everyone would benefit from a situation in which services were better, even if some individuals would have to pay more taxes, but many countries end up in a»low-tax trap«(Mosley 2015). One of the major problems lies in the lack of so-called com­mitment-devices as well as institutional solutions to coor­dinate and represent interests in negotiating reforms. The low level of trust in political parties and trade unions, as well as the comparatively high level of tolerance for tax evasion are signals of a major problem concerning the vertical rela­tionship between the informally employed and the state, as well as with many political and social institutions. Addressing these problems is not just desirable but a fundamental if not necessary step towards improving the outlook for any reforms in this area. The third main conclusion to be drawn from the analysis concerns the support for different policy options aimed at increasing state revenue. Revenue can be generated by different actors. For policymakers the key is understanding the support for different options, as well as specific actors’ capacity to resist. The results suggest that the informally employed are open to paying higher contributions them­selves. Interestingly, and potentially against what might be expected, the responses do not blame too strongly the lack of contributions of the wealthy(with the exception perhaps of Kenya and Senegal). There seems to be an understanding that funding the state is a collective task and that everyone should contribute as far as possible. The data also send a clear message that, on average, the informally employed 56