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Public-Private Entanglement: Entrepreneurship in a Hybrid Political Order, the Case of Lebanon

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  • Stel, Nora

    ()
    (Maastricht School of Management)

  • Naudé, Wim

    ()
    (Maastricht University)

Abstract

The instability and informality that characterize hybrid political orders and its effects on entrepreneurs remains largely unexplored in the scholarly literatures. In this paper we provide initial findings from the case of entrepreneurs' access to electricity in Lebanon. Using quantitative and qualitative methods we find that political connections significantly influence the investment decisions of entrepreneurs and the performance of their firms. In general, a hybrid political order imposes a 'tax' on entrepreneurship by channelling entrepreneurial talent into lobbying and bribery; by reinforcing male and family-owned dominance in business; and by skewing investment decisions. Specifically, we find that family firms whose entrepreneurs engage in bribery, and who obtain government contracts alleviate electricity problems and perform better.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7795.

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Length: 30 pages
Date of creation: Dec 2013
Date of revision:
Handle: RePEc:iza:izadps:dp7795

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Related research

Keywords: entrepreneurship; development; political economy; electricity; infrastructure; Middle East; Lebanon; hybrid political order;

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  1. Reinikka, Ritva & Svensson, Jakob, 2002. "Coping with poor public capital," Journal of Development Economics, Elsevier, vol. 69(1), pages 51-69, October.
  2. Naude, Wim & Santos-Paulino, Amelia U. & McGillivray, Mark, 2008. "Fragile States," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  3. Douglas Gollin, 2001. "Nobody's Business but My Own: Self Employment and Small Enterprise in Economic Development," Center for Development Economics 172, Department of Economics, Williams College.
  4. Tobias Hagmann & Markus V. Hoehne, 2009. "Failures of the state failure debate: Evidence from the Somali territories," Journal of International Development, John Wiley & Sons, Ltd., vol. 21(1), pages 42-57.
  5. Baumol, William J, 1990. "Entrepreneurship: Productive, Unproductive, and Destructive," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 893-921, October.
  6. Coad, Alex & Segarra Blasco, Agustí & Teruel Carrizosa, Mercedes, 2010. "Like milk or wine: Does firm performance improve with age?," Working Papers 2072/179572, Universitat Rovira i Virgili, Department of Economics.
  7. Foster, Vivien & Steinbuks, Jevgenijs, 2009. "Paying the price for unreliable power supplies : in-house generation of electricity by firms in Africa," Policy Research Working Paper Series 4913, The World Bank.
  8. Alex Coad & Jaganaddha Tamvada, 2012. "Firm growth and barriers to growth among small firms in India," Small Business Economics, Springer, vol. 39(2), pages 383-400, September.
  9. Naudé, Wim, 2010. "Promoting Entrepreneurship in Developing Countries: Policy Challenges," Working Paper Series UNU-WIDER Working Paper P, World Institute for Development Economic Research (UNU-WIDER).
  10. Stel, Nora, 2012. "Entrepreneurship and innovation in a hybrid political order: The case of Lebanon," MERIT Working Papers 078, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  11. Quatraro, Francesco & Vivarelli, Marco, 2013. "Drivers of Entrepreneurship and Post-Entry Performance of Newborn Firms in Developing Countries," IZA Discussion Papers 7436, Institute for the Study of Labor (IZA).
  12. Berry, Chris & Forder, Ali & Sultan, Sonya & Moreno-Torres, Magui, 2004. "Approaches To Improving The Delivery Of Social Services In Difficult Environments," PRDE Working Papers 12823, Department for International Development (DFID) (UK).
  13. Philippe Alby & Jean-Jacques Dethier & Stéphane Straub, 2013. "Firms Operating under Electricity Constraints in Developing Countries," World Bank Economic Review, World Bank Group, vol. 27(1), pages 109-132.
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