Bottom-up order beats top-down reform

Street vendors have built thriving pricing, credit and dispute resolution systems with no help from the state

Tonderai Mapfumo is Research and Advocacy Officer at the Coalition for Market and Liberal Solutions, Zimbabwe.

Walk through Mbare Musika in Harare, or the Bulawayo Jobless bus terminus at six in the morning, and you will find a market that emerged without any council authorisation or even intentional private initative. Thousands of informal traders, including vegetable sellers, currency dealers, second-hand clothing wholesalers and cross-border transporters, have organised themselves into a functioning economic order complete with pricing conventions, dispute resolution, space allocation and mutual credit. It is one of the clearest live demonstrations of spontaneous market order operating anywhere in Africa today, and it deserves far more attention from free-market advocates than it currently gets.

Since 2023, COMALISO has conducted field interviews with informal traders across Harare and Bulawayo, tracking how they respond to a state that, when it isn’t taxing and harassing them, simply ignores them. What emerges is not chaos but institutional improvisation. Trader associations, often informal and sometimes registered as cooperatives, set and enforce norms for stall allocation that outperform municipal licensing schemes riddled with rent-seeking and delay. Currency dealers on Harare’s Road Port price the Zimbabwe dollar against the US dollar in near-real time, providing the public exchange-rate signal that the central bank’s official rate has long failed to supply. Cross-border traders moving goods along the Zimbabwe-Zambia-Mozambique corridor have built their own informal insurance and credit networks to manage risks that formal banks won’t touch.

This is Hayekian knowledge-use in its purest form. Dispersed actors, each holding fragments of local information about prices, risk and trust, coordinate without any central planner. It is also, more practically, a case study in what happens when a state’s formal institutions fail to deliver secure property rights, stable money or accessible dispute resolution: people build parallel ones instead. Zimbabwe’s informal economy is not a symptom of underdevelopment to be regulated away. It is evidence that market coordination persists even when the formal legal order actively works against it.

The policy lesson here is not simply “deregulate.” It is more specific than that. Formalisation efforts fail when they ignore the institutions traders have already built. Zimbabwean municipal authorities have repeatedly tried to relocate or license vendors into government-built markets, and these efforts have largely collapsed, replacing working, low-cost, trader-designed governance with expensive, top-down alternatives that strip out the flexibility the informal system depends on. It would be wrong to assume traders resist formalisation out of ignorance of its benefits. They are rationally protecting institutions that work better than what is on offer.

Tsvangirayi Mukwazhi / AP

COMALISO’s advocacy, grounded in this fieldwork, argues for a different approach: legal recognition that codifies existing trader-association governance rather than displacing it, secure and transferable space-allocation rights modelled on what associations already enforce informally, and competitive energy and utility pricing that lets traders capture more of the value they generate instead of losing it to erratic, monopoly-priced services. None of this requires large public investment. The state need only recognise a market order that already exists, and stop actively undermining it through arbitrary raids, opaque licensing and currency mismanagement.

There is a broader lesson here for readers of Economic Affairs. Much of the free-market case in the developing world is made in the register of reform proposals: what governments should do differently. Zimbabwe’s informal traders offer the other half of the story: what ordinary people do when governments fail to do it at all. Their improvised institutions form a remarkably resilient system precisely because they emerged from repeated interaction and accountability among people who depend on getting it right. Free-market advocates in Africa and elsewhere would do well to study these bottom-up orders as seriously as they study top-down reform. They show what markets look like when built from first principles, under real constraints, by people with no other option but to make exchange work.

Zimbabwe’s formal economy remains in crisis. Its informal one, built entirely from the ground up, is succeeding in the meantime, and stands as a case study in liberal political economy.