When a state forces unregulated workers to organize through the ruling party in order to survive regulation, it turns a scattered trade into a political bloc. The pressure meant to remove vendors from the street instead made street vending a matter of party politics.
If officials hand the power to distribute scarce permits or stalls to group leaders, those leaders gain near-complete power over their members. The middleman who decides who gets a place becomes the boss, and this handover proved one of the biggest problems in moving vendors off the street.
Heavily subsidizing informal traders to move into formal markets invites them to exploit the subsidy rather than simply settle in. The cost meant to buy compliance becomes a source of private gain.