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Article
How to make a dis-entrepreneur of the Schumpeterian entrepreneur: the impact of institutional settings on growth
Public Choice
  • Giuseppe Eusepi, University of Roma "La Sapienza"
  • Edgar J Wilson, University of Wollongong
Document Type
Journal Article
Publication Date
1-1-2008
Abstract

Fiscal and monetary institutions are conspicuously omitted in the conventional theory of long-run economic growth. Moving from the Schumpeterian entrepreneur, who adopts new technology because its value, according to Tobin’s q, dominates the economic rents of existing capital, we argue that the Schumpeterian entrepreneur’s incentives to innovate change when he is transplanted into the public economy. We analyze two alternative institutional settings denoted as “long chain” and “short chain”. Through the “long chain” model we show that the Schumpeterian entrepreneur is driven towards “destructive creation” of new capital, thus becoming a political dis-entrepreneur, while the quasi-contractual “short chain” model provides incentives to innovate.

RIS ID
25304
Citation Information
Giuseppe Eusepi and Edgar J Wilson. "How to make a dis-entrepreneur of the Schumpeterian entrepreneur: the impact of institutional settings on growth" Public Choice Vol. 136 Iss. 1-2 (2008) p. 39 - 54
Available at: http://works.bepress.com/ewilson/2/