Why Institutions are Essential to Entrepeneurship

10.15.2019 | Articles | Mary M. Shirley

Article at a glance

  • The gradual emergence of economic institutions encouraged impersonal, long-distance trade to flourish.
  • Entrepreneurship will flourish only in economies where institutions reduce transaction costs, protect property and individuals from private theft and state confiscation, and encourage innovation and risk taking.
  • Without strong institutions, markets and entrepreneurship will not flourish and long-run growth will suffer.