December 1, 2010

The Non-Productive Entrepreneurial Process

  • Christopher Coyne

    Associate Director, F. A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics
  • John A. Dove

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A large literature explores the importance of entrepreneurship as the catalyst of economic progress. In contrast, this paper argues that entrepreneurs are the driver of economic stagnation. We analyze the non-productive entrepreneurial process and discuss three channels through which non-productive activities have a multiplier effect culminating in economic decline and stagnation. Drawing on examples of non-productive entrepreneurship from both underdeveloped and developed countries, we provide insight into why economic stagnation persists in the former and why economic decline can occur in the latter.

Read this article at SpringerLink.