institutional swamps (JIE_R&R)-23docx.pdf (359.95 kB)

Markets and institutional swamps: tensions confronting entrepreneurs in developing countries

Download (359.95 kB)
journal contribution
posted on 13.10.2016, 15:33 by Matthias Olthaar, Wilfred Dolfsma, Clemens Lutz, Florian Noseleit
Unrealized potential of entrepreneurial activities in developing countries has often been attributed to missing formal market-based institutions. In new institutional economics, the concept of ‘voids’ is suggested as describing an absence of market-based institutions. In reality, however, ‘institutional fabrics’ are always and necessarily complex and rich in institutions. No societal sphere is institutionally void. In the current article we contribute to existing literature on entrepreneurship and institutional economics s by presenting a framework for studying the richness and complexities of institutional fabrics, as well as ways in which entrepreneurs respond to institutions. Distinguishing four types of institutions relevant for entrepreneurs, we analyze case study data from Ethiopia, and discuss how ‘tensions’ between potentially incompatible institutions result in behavioral frictions. Some entrepreneurs play the complex institutional environment and benefit from the tensions in it, whereas others may drown into the institutional ‘swamp’ they face. Policy makers should acknowledge that institutions not only result from formal policy making and that in many cases a diverse set of institutions is needed to facilitate market exchange and solve constraining tensions. The diversity that results from initiatives of institutional entrepreneurs may create a more effective institutional environment for development.

History

School

  • Loughborough University London

Published in

Journal of Institutional Economics

Citation

OLTHAAR, M. ... et al, 2016. Markets and institutional swamps: tensions confronting entrepreneurs in developing countries. Journal of Institutional Economics, 13 (2), pp. 243-269.

Publisher

© Cambridge University Press

Version

AM (Accepted Manuscript)

Acceptance date

27/09/2016

Publication date

2016

Notes

This paper was accepted for publication in the journal Journal of Institutional Economics and the definitive published version is available at https://doi.org/10.1017/S1744137416000308.

ISSN

1744-1382

Language

en

Exports

Logo branding

Categories

Exports