Political economy of entrepreneurship policy

Daniel L. Bennett

Chapter 78 in Elgar Encyclopedia of Public Choice, 2025, pp 563-570 from Edward Elgar Publishing

Abstract: This chapter examines the role of public policy in fostering entrepreneurship, focusing on the debate between interventionist and laissez-faire approaches. While interventionist policies aim to address market failures and finance gaps in entrepreneurial ventures, they risk crowding out private investment and fostering unproductive behavior. In contrast, the laissez-faire perspective emphasizes the role of economic freedom, reducing government intervention to enhance entrepreneurial activity. The analysis draws on public choice theory to highlight how government failures can emerge from interventionist policies, suggesting that carefully designed policies balancing these risks are critical for fostering productive entrepreneurship.

Keywords: Entrepreneurship; Public Policy; Economic Freedom; Market Failure; Government Failure; Rent-Seeking (search for similar items in EconPapers)
Date: 2025
ISBN: 9781802207743
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