A Theory of Destructive Entrepreneurship

Abstract

Policy interest since the early 1980s has focused in different ways on the creation of a large, productive, taxable economy - in which entrepreneurship plays a role for employment, income growth and innovation. The current understanding of various forms of entrepreneurship remains incomplete, focusing largely on productive and unproductive entrepreneurship. However, destructive entrepreneurship plays an important role in many, if not most, economies. This paper addresses the conceptual gap in the allocation of entrepreneurship by proposing a theory of destructive entrepreneurship.

Keywords: destructive entrepreneurship, allocation of entrepreneurship,rent-seeking, rent-destroying, incentives, institutions, property rights, contractual enforcement, conflict, social capital, trust, ethnic capital

JEL Classification: O17, O20, P00