Giuseppe Danese and Candace A. Martinez
Abstract: Waste picking is an informal economy activity that has attracted a largeamount of research across the social sciences. We contribute to the debate oninformality and its institutional determinants through case study analysis. Wepresent a unique partnership between waste pickers and firms operating inColombia calledProyecto Pensilvania. We argue that two specific sets of lawsmade this partnership possible. The first grants legal recognition to the activitypursued by the waste pickers, who become“waste entrepreneurs.”This is a keyinitial step to bring informal sector workers into the realm of the formal economy.The second grants special legal protection to the associations of waste pickerswhen they compete for inclusion in the local waste management plans. This is away to incentivize waste pickers to join associations.Proyecto Pensilvaniadecreases transaction costs, generates income for disenfranchised groups of indi-viduals and limits environmental degradation. The regulatory reforms that led toits establishment can be imitated by other countries with sizable waste pickerpopulations.