Institutions for the Selection of Entrepreneurs: Implications for Economic Growth and Financial Crises

Arbeitspapier

The search for growth-promoting policies is found to demand knowledge of how growth depends upon actions of entrepreneurs and how these actions depend upon the prevailing institutions. While institutions have extensively been examined for their influences upon the freedoms and the incentives of entrepreneurs, and thereby upon the level of employment of resources, this paper examines their influences upon the selection of entrepreneurs, and thereby upon the efficiency of that employment. This selection is crucial in the realistic but in theory seldom considered cases in which all agents, including entrepreneurs, may differ in economic abilities. A simple model shows that in the long run, selection by market competition, especially when extended to financial markets, vastly outperforms selection controlled or protected politically. Such selection may outperform market selection only during a limited period, extendable only at the price of growing bad debts and financial crises.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IUI Working Paper ; No. 510

Classification and Topics

• Classification: Wirtschaft ; Micro-Based Behavioral Economics: General‡ ; Financial Markets and the Macroeconomy ; General Financial Markets: General (includes Measurement and Data) ; Economic Development: General ; Economic Growth and Aggregate Productivity: General ; Comparative Analysis of Economic Systems
• Subject: Eonomic growth ; growth-promoting policies ; institutions ; economic abilities ; entrepreneurs ; investors ; voters ; market selection ; government selection ; financial markets ; financial crises ; Institutionalismus ; Wirtschaftswachstum ; Wachstumspolitik ; Entrepreneurship-Ansatz ; Wettbewerb ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Pelikan, Pavel
• Event: Veröffentlichung
• (who): The Research Institute of Industrial Economics (IUI)
• (where): Stockholm
• (when): 1999

Further information

• Handle: http://hdl.handle.net/10419/95200
• Last update: 10.03.2025, 11:46 AM CET