Entrepreneurship and Economic Development: What is the Difference Between Austrian and New Institutional Approaches?
AbstractWhat is the role of entrepreneurship in economic development from the perspective of neo-Austrian and new institutional economics and what is the difference between these approaches? Neo-Austrian economists claim that economic development is caused by entrepreneurial discovery. New institutional economists argue that structure of incentives determined by the institutional environment provides a guideline for entrepreneurial decision-making. Hence, an institutional environment that rewards rent-seeking does not provide opportunities for economic development. In this paper we offer a comparison of these approaches to show that both entrepreneurial discovery and institutional environment are closely related. Moreover, with the comparison we demonstrate that entrepreneurial decision-making plays more important role in economic development when an institutional change is taken into account.
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Bibliographic InfoArticle provided by University of Economics, Prague in its journal Politická ekonomie.
Volume (Year): 2010 (2010)
Issue (Month): 5 ()
Postal: Redakce Politické ekonomie, Vysoká škola ekonomická, nám. W. Churchilla 4, 130 67 Praha 3
Find related papers by JEL classification:
- B25 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Historical; Institutional; Evolutionary; Austrian
- D8 - Microeconomics - - Information, Knowledge, and Uncertainty
- L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
- O1 - Economic Development, Technological Change, and Growth - - Economic Development
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