Two-Tiered Entrepreneurship and Economic Development

8 Pages Posted: 22 May 2006 Last revised: 25 Oct 2010

Peter T. Leeson

George Mason University - Department of Economics

Peter J. Boettke

George Mason University - Department of Economics

Date Written: July 28, 2010

Abstract

This paper argues that there are two tiers of entrepreneurship important for economic development. One is concerned with investments in productive technologies that improve productivity and better service consumer needs. The other is concerned with the creation of protective technologies that secure citizens’ private property rights vis-à-vis one another. In the developing world where governments cannot or do not protect citizens against predation, “institutional entrepreneurs” devise private mechanisms of property protection, providing the security required for productive entrepreneurship to grow. However, private protection technologies can be a double-edged sword. While private protection technologies enable some investment and exchange by securing citizens’ property where government does not, potential constraints on these technologies’ effectiveness may simultaneously limit their ability to expand investment and exchange beyond modest levels.

Suggested Citation

Leeson, Peter T. and Boettke, Peter J., Two-Tiered Entrepreneurship and Economic Development (July 28, 2010). International Review of Law and Economics, Vol. 29, No. 3, pp. 252-259, 2009. Available at SSRN: https://ssrn.com/abstract=903475

Peter T. Leeson (Contact Author)

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States

HOME PAGE: http://www.peterleeson.com

Peter J. Boettke

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States
703-993-1149 (Phone)
703-993-1133 (Fax)

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