Smuggling and small-scale trade as part of informal economic practices

Purpose - Using small-scale cross-border trade and smuggling as an example of an informal practice carried out in many post-socialist countries, the purpose of this paper is to explore which different meanings this activity possesses for the people being involved in it and in how far small-scale cross-border trade is being accepted and looked at by society. The authors hope to show the different connections between informal and formal activities and specificities of localities which people in the mentioned countries deploy when trying to secure their livelihood.Design methodology approach - The authors used a qualitative empirical research including group discussions with small-scale traders and small entrepreneurs, expert interviews with representatives of the border authorities and systematic observations at border crossing points and open-air markets at the Finnish-Russian, Polish-Ukrainian, Polish-Belarusian and Ukrainina-Romanian borders.Findings - The paper provides empirical insights about why people carry out smuggling and small-scale trade and how these informal activities are perceived in the local environment. It suggests that informal economic cross-border activities are often highly legitimized despite their illegal character. The border creates certain extra opportunities as it enables arbitrage dealings. Rather as a side effect though, the Schengen visa regime has evoked a decreasing profit margin of transborder economic activities. Therefore, it remains unclear whether the Eastern external EU border will serve as an informal economic resource in the future.Originality value - Thanks to a multisited qualitative approach to a very sensitive research topic, the paper allows empirical insights into meanings and uses of smuggling and cross-border small-scale trade.