Encouragement of the ‘informal sector’ of employment in developing countries, recommended by many advisers including the ILO's mission to Kenya (1972), is attacked as an ambiguous and, in part, counter‐productive policy. Ambiguous in that at least four definitions of informality (according to size of firm, degree of official enumeration, pattern of industrial relations and relationship to the State) are current; possibly counter‐productive in that much informal employment is either in the production of ‘inferior’ goods and services with few dynamic growth possibilities, or orientated towards the demands of an elite, and hence undesirable from an equity point of view.