Entrepreneurship and innovation in a hybrid political order: The case of Lebanon
AbstractGovernance is often treated as a 'black box' explanation for unproductive or destructive entrepreneurship. In order to improve our understanding of how governance structures influence entrepreneurship and innovation it is instructive to consider how entrepreneurs function in so-called hybrid political orders. Lebanon is such a hybrid political order in which a dual game of informal clientelism and formal programmatic competition shapes entrepreneurship. In this paper I provide an exploratory overview of the governance-entrepreneurship nexus in Lebanon. It is argued that although Lebanese entrepreneurial attitudes appear to be very positive, entrepreneurial activity seems to be adversely impacted by governance challenges and entrepreneurial aspiration is severely underdeveloped. In-depth interviews with Lebanese experts show that Lebanese entrepreneurs still face significant obstacles, often related to the political context and system. These include: the high costs of utilities and infrastructure; poor government support and a lack of political vision for the economy; and instability and unpredictability related to violent conflict that make investment and planning difficult and foster a short-term, migration-focused mentality. Lebanese entrepreneurs respond to these challenges by operating as independent from government as they can; taking a regional perspective; and diversifying. The challenging context, moreover, also offers particular assets and opportunities to entrepreneurs, such as a vibrant diaspora and a supposedly resilient business mentality.
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Bibliographic InfoPaper provided by United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT) in its series MERIT Working Papers with number 078.
Date of creation: 2012
Date of revision:
Lebanon; governance; conflict; fragility; entrepreneurship; innovation; business;
Find related papers by JEL classification:
- L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
- M48 - Business Administration and Business Economics; Marketing; Accounting - - Accounting - - - Government Policy and Regulation
- O17 - Economic Development, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
- O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
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