Entrepreneurship and Economic Development: What is the Difference Between Austrian and New Institutional Approaches? (in Czech)
Politická ekonomie, Vol. 58, No. 5, pp. 623-640, 2010
18 Pages Posted: 31 Oct 2010 Last revised: 20 Sep 2012
Date Written: March 29, 2008
What is the role of entrepreneurship in economic development from the perspective of neo-austrian and new institutional economics and what is the difference between these approaches? Neo-austrian economists claim that economic development is caused by entrepreneurial discovery. New institutional economists argue that structure of incentives determined by the institutional environment provides a guideline for entrepreneurial decision-making. Hence, an institutional environment that rewards rent-seeking does not provide opportunities for economic development. In this paper we offer a comparison of these approaches to show that both entrepreneurial discovery and institutional environment are closely related. Moreover, with the comparison we demonstrate that entrepreneurial decision-making plays more important role in economic development when an institutional change is taken into account.
Note: Downloadable document in Czech.
Keywords: Economic development, entrepreneurship, neo-austrian economics, new institutional economics
JEL Classification: B25, D8, L26, O1
Suggested Citation: Suggested Citation