The parallel market in Algeria: Nature, causes, and impacts

In the following study, the parallel market is presented as a symptom of an ailing economic system. Besides creating micro and macro economic mismanagement, it creates distortions. The present thesis supports the idea that neither repression nor a liberalization policy helps the absorption of the parallel market. Rather, it is the structural change that confronts the sources of its growth that will bring the parallel market to a one-lined official market. Although not unique in the macro-economic sense, the Algerian case presents historically specific events and challenges that led to the growth of a parallel market. The politico-economic reforms undertaken in the eighties will have dual impacts on the economy. We propose an overview of the economic situation and an analysis of the effects of the reforms on the parallel market.