How to Make Social Entrepreneurship Sustainable? A Diagnosis and a Few Elements of a Response

Posted: 4 May 2017

Date Written: March 6, 2017


Social entrepreneurship is a precarious activity that must always strike a delicate balance between commercial principles and social concerns. There is no shortage of discussion concerning the possible solutions that could help to maintain this balance, and social entrepreneurs are striving to reconcile conflicting aims on a daily basis, but the economic roots of this precariousness remain. Based on an analysis of these root causes, we propose a new radical approach to this precariousness, “radical” in the etymological sense of the term “root”. We start by identifying what determines the dilemma that lies at the heart of the precariousness of social entrepreneurship in present-day economic institutions. This enables us to identify the institutional conditions that might allow us to overcome it. The first condition is linked to the conservation of money in individual trade, which might be alleviated. To determine the second condition, we introduce the notion of the endogeneity of the institutional solutions to the dilemma. The lesser the involvement of the actors concerned by its formulation, the less endogenous is the solution. On this basis, we suggest institutional reforms that could prompt entrepreneurs to organize themselves in support of the actions of the most socially oriented entrepreneurs, thus safeguarding their sustainability.

Keywords: Social Entrepreneurship, Positive Externalities, Internalization, Endogeneity, Commons, Institutional Innovation

JEL Classification: D17, L31, M14, O35

Suggested Citation

Lamy, Erwan, How to Make Social Entrepreneurship Sustainable? A Diagnosis and a Few Elements of a Response (March 6, 2017). Journal of Business Ethics, Forthcoming. Available at SSRN:

Erwan Lamy (Contact Author)

ESCP Europe ( email )

79, avenue de la République
Paris, 75011

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