Why Does Formalization Fail? Institutional Attachment Theory and Urban Transport Reform in Lagos, Nigeria

Across Africa's rapidly urbanising cities, governments pursuing transport formalisation consistently encounter resistance from informal operators, resistance that persists despite significant economic incentives. This study argues that formalisation fails not because it reduces earnings, but because it seeks to replace an entire institutional ecosystem to which operators have developed deep attachment. Drawing on ethnographic research with danfo operators in Lagos and employing thematic analysis of interview and observational data, we develop Institutional Attachment Theory (IAT) to explain why informal actors resist formalisation. The theory proposes that resistance is determined by cumulative attachment to six institutional dimensions: economic, institutional, identity, political, risk, and social. The study introduces the Institutional Attachment-Formalization Framework (IAFF) and proposes analytical tools to operationalise the theory. Our findings demonstrate that formalisation succeeds only when formal institutions reproduce the essential functions currently supplied informally. The study reframes formalisation as institutional substitution rather than fleet replacement, with implications for transport reform, street vending, informal housing, and other domains of urban informality. The framework offers a transferable analytical tool for assessing reform readiness across informal sectors in Global South cities.