A Theory of Political Entrepreneurship

Modern Economy, Vol. 2, No. 4, pp. 552-560.

9 Pages Posted: 27 Aug 2014

See all articles by Matthew McCaffrey

Matthew McCaffrey

University of Manchester - Manchester Business School

Joseph T. Salerno

Ludwig von Mises Institute; Auburn University ; Pace University - Lubin School of Business

Date Written: 2011

Abstract

This paper adapts the entrepreneurial theory developed by Richard Cantillon, Frank Knight, and Ludwig von Mises to the theory of "political entrepreneurship." Political entrepreneurship is an outgrowth of the theory of the market entrepreneur, and derives from extending entrepreneurial theory from the market into the political sphere of action. By applying the theory of the entrepreneur to political behavior, we provide a basis for identifying political entrepreneurs, and for separating them analytically from other government agents. The essence of political entrepreneurship is the redirection of production from the path it would have taken in an unregulated market. Nevertheless, this production does produce an income stream to political entrepreneurs which closely resembles the profit of market entrepreneurs.

Keywords: Entrepreneurship, Political Entrepreneurship, Ownership, Production, Uncertainty, Income Distribution, Profit and Loss

JEL Classification: H54, L26

Suggested Citation

McCaffrey, Matthew and Salerno, Joseph T., A Theory of Political Entrepreneurship (2011). Modern Economy, Vol. 2, No. 4, pp. 552-560.. Available at SSRN: https://ssrn.com/abstract=2487134

Matthew McCaffrey (Contact Author)

University of Manchester - Manchester Business School ( email )

United Kingdom

Joseph T. Salerno

Ludwig von Mises Institute ( email )

Auburn, AL
United States
3343212113 (Phone)

HOME PAGE: http://www.mises.org

Auburn University ( email )

415 West Magnolia Avenue
Auburn, AL 36849
United States

Pace University - Lubin School of Business ( email )

1 Pace Plaza
New York, NY 10038-1502
United States

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