Hart’ informality was an elusive thread in the fabric of Port Moresby, capital and principal urban centre of Papua New Guinea (PNG) during the late colonial period, 1945-75. Commencing in the late period of preparation for Independence, a genuine PNG voice emerged in the colonial legislature and the Pangu party took power on the eve of self-government. A consultant team, the Faber Mission of 1972, was tasked to recommend policies for an independent PNG. Keith Hart, originator of the idea of the ‘urban informal sector’, was a team member. Hart found that economic informality, while emerging in rural areas, was largely absent from PNG towns and his account of the experience is central to this paper. The Faber Report placed informality at the heart of its strategies for development and this was adopted enthusiastically by the new government. The paper describes informality as being closely linked with another issue, the need for a modern regulatory framework for formal employment. This required efforts to break a ‘Gordian knot’, originating in the nexus between retarded urbanism, archaic processes of wage determination and low labour productivity. The paper deals with the ideological ferment surrounding these events and the brief and ultimately unsuccessful attempt to ‘formalise the informal’. It examines the intellectual precursors of informality in PNG, the slender evidence for its existence and the cultural and economic reasons for this situation.

John Conroy lived and worked in PNG over the period 1970-1981, where he lectured in Economics at the University of Papua New Guinea, and served for four years, 1977-81, as Director of the PNG Institute of Applied Social and Economic Research (predecessor of the present National Research Institute). Subsequently, during the 1980s, he lived and worked in Indonesia for six years. He is currently a Visiting Fellow in Crawford School, The Australian National University. John is preparing a monograph on the idea of the informal economy and its application to PNG. This is the tenth in a series of papers, to be abridged for publication as a monograph. The previous papers are available online at http://papers.ssrn.com/sol3/cf_dev/AbsByAuth.cfm?per_id=1789610