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Two-tiered entrepreneurship and economic development

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  • Leeson, Peter T.
  • Boettke, Peter J.

Abstract

This paper argues that there are two tiers of entrepreneurship important for economic development. One is concerned with investments in productive technologies that improve productivity and better service consumer needs. The other is concerned with the creation of protective technologies that secure citizens' private property rights vis-à-vis one another. In the developing world where governments cannot or do not protect citizens against predation, "institutional entrepreneurs" devise private mechanisms of property protection, providing the security required for productive entrepreneurship to grow. However, private protection technologies can be a double-edged sword. While private protection technologies enable some investment and exchange by securing citizens' property where government does not, potential constraints on these technologies' effectiveness may simultaneously limit their ability to expand investment and exchange beyond modest levels.

Suggested Citation

  • Leeson, Peter T. & Boettke, Peter J., 2009. "Two-tiered entrepreneurship and economic development," International Review of Law and Economics, Elsevier, vol. 29(3), pages 252-259, September.
    • Handle: RePEc:eee:irlaec:v:29:y:2009:i:3:p:252-259
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    References listed on IDEAS

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    1. Peter Leeson, 2008. "Coordination without command: Stretching the scope of spontaneous order," Public Choice, Springer, vol. 135(1), pages 67-78, April.
    2. Djankov, Simeon & Glaeser, Edward & La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei, 2003. "The new comparative economics," Journal of Comparative Economics, Elsevier, vol. 31(4), pages 595-619, December.
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    6. Leeson, Peter T., 2007. "Better off stateless: Somalia before and after government collapse," Journal of Comparative Economics, Elsevier, vol. 35(4), pages 689-710, December.
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    8. Peter T. Leeson, 2008. "Social Distance and Self-Enforcing Exchange," The Journal of Legal Studies, University of Chicago Press, vol. 37(1), pages 161-188, January.
    9. Greif,Avner, 2006. "Institutions and the Path to the Modern Economy," Cambridge Books, Cambridge University Press, number 9780521671347.
    10. Peter T. Leeson, 2006. "Cooperation and Conflict," American Journal of Economics and Sociology, Wiley Blackwell, vol. 65(4), pages 891-907, October.
    11. Peter T. Leeson, 2007. "An-arrgh-chy: The Law and Economics of Pirate Organization," Journal of Political Economy, University of Chicago Press, vol. 115(6), pages 1049-1094, December.
    12. Edward L. Glaeser & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2004. "Do Institutions Cause Growth?," Journal of Economic Growth, Springer, vol. 9(3), pages 271-303, September.
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    14. Peter T. Leeson, 2007. "Trading with Bandits," Journal of Law and Economics, University of Chicago Press, vol. 50(2), pages 303-321.
    15. Peter T. Leeson, 2008. "How Important is State Enforcement for Trade?," American Law and Economics Review, Oxford University Press, vol. 10(1), pages 61-89.
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    17. Peter T. Leeson, 2009. "The Laws of Lawlessness," The Journal of Legal Studies, University of Chicago Press, vol. 38(2), pages 471-503, June.
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