This study explores the interface between global formal and local informal institutions in Turkey’s textile waste and recycling sector, examining their impact on circular economy transitions. Grounded in 64 interviews across two interconnected clusters—one focused on textile recycling and the other on waste collection and trade—we investigate global-to-local and local-to-global institutional dynamics at the formal-informal interface. Our findings demonstrate that global formal institutions, such as certifications, regulatory policies, and transnational agreements, impose significant pressures on local informal systems, often creating operational and financial barriers for local actors. Conversely, informal institutions, characterized by tacit knowledge, informal flexible labor practices, and cultural norms, support resource recovery and local livelihoods but face exclusion. We highlight the socio-ecological consequences of these interactions, including precarious labor conditions, environmental benefits from reduced waste, and systemic tensions stemming from power imbalances and marginalization. By extending the concept of the institutional interface, this study contributes to institutional theory and circular economy literature, emphasizing the need for inclusive strategies that reconcile global sustainability objectives with local realities. Our findings call for further exploration of these dynamics in other Global South contexts, where informal systems play a critical role in addressing environmental challenges and fostering sustainable transitions.
