The Interdependence between Political and Economic Entrepreneurship

33 Pages Posted: 26 Aug 2006

See all articles by Barbara Krug

Barbara Krug

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM); Erasmus Research Institute of Management (ERIM)

Date Written: January 2000, 12

Abstract

The Chinese economy has developed rapidly despite two major constraints: ill-functioning markets and a socialist past, both of which caused an environment of unenforceable contracts. In this situation the need to pool resources and to govern relational risk was paramount to the development of a private sector. While modern organisation (transaction cost-) theory can explain why and to which extent entrepreneurship in China is based on collective agents, an analysis of the (local) political market is needed to explain why China's villages provide the much needed (and valuable) public goods in form of property rights protection and contractual security. Decentralisation and jurisdictional competition facilitate the writing of a new "common law" as well as the "discovery" of new forms of collective action.

Keywords: entrepreneurial economy, organisational change, jurisdictional competition, economic development

JEL Classification: M, M10, L2, H32, H11, L22, O53, P21

Suggested Citation

Krug, Barbara, The Interdependence between Political and Economic Entrepreneurship (January 2000, 12). ERIM Report Series Reference No. ERS-2000-43-ORG. Available at SSRN: https://ssrn.com/abstract=370852

Barbara Krug (Contact Author)

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR
Netherlands

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

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