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The Interdependence Between Political and Economic Entrepreneurship

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  • Krug, B.
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    Abstract

    The Chinese economy has developed rapidly despite two major constraints: ill-functioning markets and a socialist past, both of which caused an environment of unenforceable contracts. In this situation the need to pool resources and to govern relational risk was paramount to the development of a private sector. While modern organisation (transaction cost-) theory can explain why and to which extent entrepreneurship in China is based on collective agents, an analysis of the (local) political market is needed to explain why China's villages provide the much needed (and valuable) public goods in form of property rights protection and contractual security. Decentralisation and jurisdictional competition facilitate the writing of a new "common law" as well as the "discovery" of new forms of collective action.

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    Bibliographic Info

    Paper provided by Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam in its series ERIM Report Series Research in Management with number ERS-2000-43-ORG.

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    Date of creation: 01 Dec 2000
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    Handle: RePEc:ems:eureri:59

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    Related research

    Keywords: economic development; entrepreneurial economy; jurisdictional competition; organisational change;

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    1. Qian, Yingyi & Roland, Gerard, 1998. "Federalism and the Soft Budget Constraint," American Economic Review, American Economic Association, vol. 88(5), pages 1143-62, December.
    2. Yingyi Qian & Barry R. Weingast, 1997. "Federalism as a Commitment to Preserving Market Incentives," Working Papers 97042, Stanford University, Department of Economics.
    3. Dennis Mueller, 1998. "Constitutional Constraints on Governments in a Global Economy," Constitutional Political Economy, Springer, vol. 9(3), pages 171-186, September.
    4. Victor Nee & David Strang, 1998. "The Emergence and Diffusion of Institutional Forms," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 154(4), pages 706-, December.
    5. Greif, Avner, 1993. "Contract Enforceability and Economic Institutions in Early Trade: the Maghribi Traders' Coalition," American Economic Review, American Economic Association, vol. 83(3), pages 525-48, June.
    6. Nooteboom, B. & Berger, H. & Noorderhaven, N.G., 1997. "Effects of trust and governance on relational risk," Open Access publications from Tilburg University urn:nbn:nl:ui:12-73834, Tilburg University.
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