Making Poor Nations Rich: Entrepreneurship and the Process of Economic Development - Softcover

Softcover

ISBN 10: 0804757321 ISBN 13: 9780804757324

Verlag: STANFORD ECONOMICS & FINANCE, 2007

Inhaltsangabe

Why do some nations become rich while others remain poor? Traditional mainstream economic growth theory has done little to answer this question-during most of the twentieth century the theory focused on models that assumed growth was a simple function of labor, capital, and technology. Through a collection of case studies from Asia and Africa to Latin America and Europe, Making Poor Nations Rich argues for examining the critical role entrepreneurs and the institutional environment of private property rights and economic freedom play in economic development.

Making Poor Nations Rich begins by explaining how entrepreneurs create economic growth and why some institutional environments encourage more productive entrepreneurship than others. The volume then addresses countries and regions that have failed to develop because of barriers to entrepreneurship. Finally, the authors turn to countries that have developed by reforming their institutional environment to protect private property rights and grant greater levels of economic freedom.

The overall lesson from this volume is clear: pro-market reforms are essential to promoting the productive entrepreneurship that leads to economic growth. In countries where this institutional environment is lacking, sustained economic development will remain illusive.

Über diesen Titel

Über die Autorinnen und Autoren

Benjamin Powell is Director of the Center on Entrepreneurial Innovation at the Independent Institute and Assistant Professor of Economics at San Jose State University.

Benjamin Powell is Director of the Center on Entrepreneurial Innovation at the Independent Institute and Assistant Professor of Economics at San Jose State University.

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MAKING POOR NATIONS RICH

Entrepreneurship and the Process of Economic Development

Stanford University Press

Copyright © 2008 Board of Trustees of the Leland Stanford Junior University
All right reserved.
ISBN: 978-0-8047-5732-4

Contents

List of Illustrations...............................................................................................................................................................................viiForeword Deepak Lal................................................................................................................................................................................xiContributors........................................................................................................................................................................................xixAcknowledgments.....................................................................................................................................................................................xxiii1 Introduction Benjamin Powell....................................................................................................................................................................1PART I Institutions and Entrepreneurship2 Big Bills Left on the Sidewalk: Why Some Nations Are Rich, and Others Poor Mancur Olson Jr......................................................................................................253 Entrepreneurship and Economic Growth Randall G. Holcombe........................................................................................................................................544 Entrepreneurship: Productive, Unproductive, and Destructive William J. Baumol...................................................................................................................795 Economic Freedom and Property Rights: The Institutional Environment of Productive Entrepreneurship Robert A. Lawson.............................................................................112PART II Failures in Entrepreneurial Development6 The African Development Conundrum George B. N. Ayittey..........................................................................................................................................1377 The Case of Latin America Alvaro Vargas Llosa...................................................................................................................................................1898 Entrepreneurship or Entremanureship? Digging Through Romania's Institutional Environment for Transition Lessons Peter J. Boettke, Christopher J. Coyne, and Peter T. Leeson.....................2239 Sweden's Slowdown: The Impact of Interventionism on Entrepreneurship Dan Johansson..............................................................................................................250PART III Reform and Success in Entrepreneurial Development10 China's March Toward the Market James A. Dorn...................................................................................................................................................28311 India: The Elephant in the Age of Liberation Parth J. Shah and Renuka Sane......................................................................................................................30912 Economic Freedom and Growth: The Case of the Celtic Tiger Benjamin Powell.......................................................................................................................34213 Why Have Kiwis Not Become Tigers? Reforms, Entrepreneurship, and Economic Performance in New Zealand Frederic Sautet............................................................................36414 Look, Botswana: No Hands! Why Botswana's Government Should Let the Economy Steer Itself Scott A. Beaulier.......................................................................................396Index...............................................................................................................................................................................................429

Chapter One

Introduction

BENJAMIN POWELL

Why do some nations become rich while others remain poor? This has been a central question in economics since at least the time of Adam Smith. China, India, and Botswana are booming and in the process lifting hundreds of millions of people out of wretched poverty, while most of sub-Saharan Africa not only fails to get rich but is instead actually getting poorer.

Traditional mainstream economic growth theory doesn't help us much to answer this question-through most of the twentieth century it focused on models that assumed growth is a simple function of labor, capital, and technology. The new growth theory, of which this book is part, looks more to institutions and policy. How well does a nation protect its entrepreneurs? In what countries do you get rich by inventing a new product, and in what countries do you get rich by wresting control of government from your rivals?

Entrepreneurs drive the market toward efficient outcomes by exploiting profit opportunities and causing the market process to tend toward equilibrium (Kirzner 1973). Entrepreneurs also play a central role in the market's process of creative destruction, whereby new innovations constantly replace old technologies and send the market on a path toward a new equilibrium (Schumpeter 1934). The interaction of these two roles of the entrepreneur drives the process of economic development.

Entrepreneurs exist in almost all cultures and historical contexts. Why, then, doesn't the process of economic development occur in all countries equally? Human decision making responds to perceived costs and benefits, and not all societies have an environment that rewards productive entrepreneurship. Look at the case of imperial China. A brilliant young man would devote all of his energies to studying law in preparation for the exams that gave entrance into the upper echelons of the ruling bureaucracy. That same young man today may study electrical engineering with the dream of one day opening his own firm because now Chinese businessmen can earn greater prestige and profits than they could in the past. In which society should we expect greater economic growth?

In recent years the economics profession and policy world have begun to pay more attention to the institutional environment necessary for economic growth. Geography and other explanations for success have begun to be pushed aside as institutions have become increasingly recognized as the main driver of economic success (Rodrik, Subramanian, and Trebbi 2004). Some in the profession have moved toward detailed analytical narratives to explain individual cases in economic development. There has also been a virtual explosion in research measuring economic freedom and using it to explain economic performance. In Washington, DC, people in policy circles now generally, though incompletely, acknowledge the need for private property rights and the rule of law for economic development.

Making Poor Nations Rich seeks to push the current debate further in the direction of an appreciation for the critical role that entrepreneurs and the institutional environment of private property rights and economic freedom play in economic development. The book begins by collecting the key essays that explain how entrepreneurs create economic growth and why some particular institutional environments encourage more productive entrepreneurship than do others. Part 1 ends with a chapter explaining...

Details zur Ausgabe

• Verlag: STANFORD ECONOMICS & FINANCE
• Erscheinungsdatum: 2007
• Sprache: Englisch
• ISBN 10: 0804757321
• ISBN 13: 9780804757324
• Einband: Taschenbuch
• Anzahl der Seiten: 452
• Herausgeber: Powell Benjamin
• Kontakt zum Hersteller: Mare Nostrum Group B.V.; gpsr@mare-nostrum.co.uk; ; Doelen 72; Breda; 4831 GR; Niederlande