The Political Economics of Entrepreneurship

The crucial importance of entrepreneurship for growth and the development of welfare has lately come to be increasingly emphasized in research. It has often been taken for granted that increased entrepreneurial activity has a positive effect on growth and job creation. The starting point of this project is that entrepreneurs do not automatically make positive contributions to the economy. Instead, we start with the assumption that whether the contribution is positive depends on the institutional conditions in the economy, which determine what has also been called “the incentive structure of society” for entrepreneurship. Entrepreneurs are analyzed as economic agents who continuously look for economic rent exceeding the risk-adjusted interest in the economy. The main aim of the project is to analyze how the degree of entrepreneurial activity, and to which activities it is channeled is determined by central institutions in the economy.