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Volume 9 Issue 4 Highlights

Unearth The World


Goodwill Poaching: Volunteering, Travel, and the Rise of Grey & Black Market Aid

In almost every country across this planet volunteering is considered a form of labor, regardless of the lack of remuneration for services rendered. As such, there are visas and/or special permits required in order to cross a nation’s borders and volunteer within that country. Likewise, there are existing country-specific regulations for taxable income, including income generated from such activities as hosting volunteers. At present, there are many indications that these regulations are not being honored at the host-country level as it pertains to the combination of volunteering and travel. We do, however, know that travelers are utilizing transportation to these countries that is generally associated with the formal economy. As a result, a formal-to-informal economy, or grey-black market, is being created in destinations around the world. Before we can address this challenge, however, we need to better understand it. What is the informal economy? Is there a rationale behind it? Do we hold a collective attitude that do-gooding entitles us to circumvent rules & regulations? In what follows we'll explore these questions and offer suggestions on how to improve the overall situation.

It is  illegal to work in Nepal – even as a volunteer – without a work permit."



"As a general proposition, an economic agent is regarded a member of the 'formal' sector of any economy when his actions adhere to, or are protected by the established institutional rules of the game. Conversely, when his actions fail to adhere to the established rules, or are denied their protection, the agent is regarded as a member of the 'informal' sector of the economy. Adherence to the established rules constitutes participation in the formal or aboveground economy, whereas, non compliance, or circumvention of the established rules, or exclusion from the protection of those rules, constitutes participation in an informal or underground economy. Since there are a variety of institutions (different sets of rules covering a wide spectrum of economic behaviors) there are also a variety of informal sectors. The characteristics of each distinct informal economy are determined by the particular set of institutional rules that its members circumvent.” [Feige (1990) p.5]

The preceding story is repeated tens of thousands, if not hundreds of thousands of times each year all across the planet. In 2008, for example, the Corporation for National & Community Service (CNCS) and the U.S. Bureau of Labor Statistics (U.S. BLS) estimated that more than 4.7 million Americans (3.6 million in the U.S.; 1.1 million internationally) participated in voluntary service more than 120 miles from their homes. Sparked by the noticeable influx of visiting volunteers to the Greater New Orleans area following Hurricane Katrina (August 2005), CNCS was curious to uncover just what kind of potential movement of Americans as volunteers was occurring in the U.S. and abroad. Unfortunately, this was as far as the study went.

Since 2008, CNCS and the U.S. BLS have not conducted a follow on study; no one knows how many Americans are still participating in such activities: where they go, what they do, or what the impact is at the destination level. Assuming that the number of participants stayed at exactly the same level, some 28 million Americans would have volunteered more than 120 miles from their home in the past six years. Even if we estimate that 50% of these folks were repeat do-gooders, conceivably, the U.S. has produced an additional 14 million (11 million in the U.S.; 3 million internationally) visiting volunteers during this period. Truth be told though, we have nary a clue.

This do-gooding [which includes such terms as “international volunteering” (364 days or less), “international service learning,” “volunteer travel,” “volunteering abroad,” and “volunteer tourism” & “voluntourism,” just to name a few] is recognized as the fastest growing sector within the travel & tourism industry. The U.S. does not hold a monopoly on this little understood, yet highly under-measured, market; participants also hail from South Korea, Malaysia, China, Australia, Brazil, Argentina, Belgium, Germany, Canada, New Zealand, the Netherlands, India, France, Spain, the UK, the Philippines, and elsewhere. Despite the growing demand, no government, no formalized institution (including the United Nations) is measuring: 1) the sheer numbers of participants, 2) what visas they use to travel, 3) who is paid to get them in and out of communities and destinations around the world, and 4) whether these entities are operating according to the rules & regulations set forth by the countries in which they do business. As a result, the combination of volunteering and travel is becoming the 21st Century’s version of Grey & Black Market Aid.

And aren’t we all just a little curious as to why this is the case?

Defining the Informal Economy

So, what is this informal economy, anyway? Where did it come from? How is it relevant in the context of the intersection of volunteering and travel?

Edgar Feige offered an insightful definition of the informal economy, helping us by comparing and contrasting it to the formal economy. He wrote:

Likewise, Saskia Sassen emphasized the relationship between the formal and informal economies and how the latter is shaped by its relationship to the former:

There are several points to be drawn forth from these definitions. The first point is the significance of rules & regulations. Rules & regulations formalize an economy; therefore, it is impossible to develop an "informal economy" without them. Second, any action that is designed to avoid the rules & regulations of a formal economy is, by definition, attributed to the informal economy. Finally, looking at the latter part of Feige's definition, we find a distinction between the characteristics of different informal economies based upon the rules & regulations that the informal economic agents are aiming to avoid or "circumvent." Each of these plays a part in better understanding the nature of the intersection of voluntary service and travel in the context of formal & informal economies.

Figure 1 - Visualization of Informal & Formal Economies of voluntary service & travel

Seeing The Complete Picture: The Mixed Economies Associated with Voluntary Service & Travel

However we decide to frame the informal economy, the main point to be made in all of this is that the intersection of voluntary service and travel is contributing to both formal and informal economies. Let's take a closer look at exactly how this is occurring.

The Formal Economy

In Figure 1 (above), we see a distinct area in which all individuals traveling to a destination to volunteer are participating in the formal economy. Those who utilize a regulated form of transportation to arrive in a particular destination are, by definition, engaged in the formal economy. These activities are subject to rules & regulations set forth by governments and agreed to by businesses. Whether one uses an air carrier, ship, train, or rental car to travel to a given destination, the activity will be properly taxed and overseen by the public sector.

The Informal Economy: Hotspot #1 - The International Border

Remember, the informal economy begins when economic agents circumvent rules & regulations set forth to guide the formal economy. The International Border poses the first challenge to formal economic activity. When travelers are confronted with the myriad visas and governmental regulations regarding the conduct of voluntary service in a given destination, there may be perceptions of a bureaucratic nightmare/headache leading to serious time-consumption for travelers aiming to acquire the necessary paperwork. An easy way to avoid this is to acquire a tourist visa; but, is it the proper visa? Or what about an individual who travels into the country on a tourist visa, but later decides to volunteer - should this be considered part of the informal - grey or black market economy? Or, in the case of tour operators, their clients are in the country to go on safari, as an example, which will consume 75% of their clients' time in the destination - do they need to purchase a volunteer visa, which could cost several hundred dollars more per client?

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The legalities, the money, the lack of options for travelers ("you are either this, or that") makes the decision at the International Border a very difficult one. "Who will know if we don't purchase the right visa or visas as long as we purchase a visa that works for at least part of what we are doing?" - a grey area indeed. But the moral dilemma can become quite black for those who see themselves as volunteers, however, yet purchase a "tourist visa"; ignoring a country's request that volunteers hold a "volunteer visa" is clearly circumventing the rules & regulations, i.e., participating in the informal economy.

The Informal Economy: Hotspot #2 - The Host Community

Even if travelers, or volunteers (depending on how they see themselves), purchase the proper visas at the border, they still run the risk of initiating an informal economy in the Host Community. For example, if they stay in a family's home and pay cash for that service - circumventing the tax system, or regulations regarding small businesses and how they may have requirements to register with local governments in order to operate - then they have, knowingly or unknowlingly, helped to create an informal economic activity. The same may be true in the case of hiring locals to support construction projects, offer guiding services, prepare meals, etc. - all of these activities would be part of the informal economy if any rules & regulations were summarily being circumvented as a result.

If all services being provided to hosted travelers/volunteers in the local community are part of the informal economy, then voluntary service and travel are intersecting to create black market aid. In the event that some products & services are part of the formal economy and others the informal economy, then we have created grey market aid. This, of course, need not be the case.

Addressing Grey & Black Market Aid

TTDG 6380

No organization woke up one morning and said, "Let's create grey market aid or black market aid, shall we?!?" There was no overarching intent to craft a generation of poachers of goodwill. Nonetheless, this is the situation in which we find ourselves. The systems and governmental regulations that were initially established to oversee voluntary service and travel & tourism were done so with a set of minds which saw them as separate and distinct. How could anyone have foreseen that in the 21st Century we would have 10 million-plus individuals spending 10's of billions of dollars roaming about the planet each year with the desire to integrate the two? Integration, therefore, is something that we need to collectively address.

First and foremost, we need to come to a level of acceptance that whether an individual travels and tours the world, whether an individual travels the world to volunteer, or whether an individual moves about the world with a clear intention of engaging in both travel & tourism and volunteering, we need to all, collectively, embrace this as part of our humanity. No one is "more right," "more evolved," "more enlightened" than anyone else for choosing the particular path s/he chooses.

Second, we need to work with governments to see that we really do have three different audiences in the world today. The United Nations should hold a gathering to discuss what researchers and academics the world over are reporting - there are travelers/tourists; there are volunteers; and there are "voluntourists." We need systems and regulations for governing these three audiences. We need approaches that are geared to take the movement of social benevolence and economic support in more constructive, holistic ways.

Third, businesses, institutions of higher learning, and NGOs - all of whom are stakeholders in the movement of this energy about the planet - need to take a lead in bringing the importance of new systems' design to the attention of the public sector. By streamlining and developing more effective systems, we open the door to a potentially larger audience of participants - more informed, more educated, and more prepared to interact with the host communities which they encounter.

Fourth, and speaking of host communities, if we become more effective in our systems, we are likely to see the emergence of communities which feel empowered to host travelers, volunteers, and voluntourists in their own communities, sans the typical liaison force - an NGO, a tour operator, or an outside company. If local residents have access to a system of rules and regulations which assist them in hosting visitors, and better understanding the processes involved, they will not be intimidated by the prospects. In fact, they may be inclined to formalize their own structures of how to host visitors, determining what should be required of both host and guest.

Finally, if we could transition the economic activity surrounding this movement, which, at least in part, is currently falling into the abyss of the informal economy, into the formal economy, we could conceivably open new doors for resource leveraging & reallocation. What's more, home countries could distribute their aid packages more effectively if they had a sense that their citizenry are actively engaged in certain locations and not in others.

Final Thoughts...

Save Vernazza

Informal economies need not be the norm where the intersection of voluntary service and travel are concerned. We can create new systems and new approaches to honor the different types of travelers in the world today.

We continually encounter difficulty when we spend our energy striving to differentiate ourselves from one another. There is no collective profit in doing so. All we need do is recognize and honor that there are different approaches; once we do this, the cooperative energy of all three approaches can converge to meet the demands of streamlining the systems which inevitably impact each one.

The desire to integrate travel and volunteering will not suddenly disappear from this earth; on the contrary, the past two decades demonstrate a substantial increase in the number of participants engaged in such travel. What we can do, by formalizing the systems supporting and surrounding them, however, is move the control of these processes to the host countries and communities.

The sustainability of traveling, volunteering, and/or voluntouring is at stake as long as ownership remains with only one audience - that which caters to participants. When we expand the reins of governance to host communities, we may discover a form of voluntourism that has yet to be realized - one that truly exemplifies the importance of integrating voluntary service and travel & tourism. If this be the case, all stakeholders will probably be able to move more quickly in the aftermath of natural disasters, for example, because systems will be in place to honor the well-being of host communities and the well-meaning of visitors.

Undoubtedly, everyone will rest a bit easier if we no longer need engage in goodwill poaching.


Feige, Edgar L. (1990). Defining and Estimating Underground and Informal Economies: The New Institutional Economics Approach. Online Access (1-29).

Sassen, Saskia (1994). The Informal Economy: Between New Developments and Old Regulations. Yale Law Journal 103(8), 2289-2304.

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