TY - JOUR
T1 - Misallocation of Entrepreneurial Talent in Postconflict Environments
AU - Sanders, M.
AU - Weitzel, U.
PY - 2013/2/1
Y1 - 2013/2/1
N2 - Entrepreneurship is generally regarded as a productive force of change, innovation, and development in modern economies. Particularly for institutionally less developed environments, however, it has been argued that the same energy and talent can also be allocated to unproductive ends. In this article, we present a model that analyzes the allocation of entrepreneurial talent into productive activities and raiding in Postconflict environments, where most formal and informal institutions have broken down. We show that the distribution of initial wealth and entrepreneurial talent play a decisive role. Our analysis also suggests that microcredits can support the transition to a productive equilibrium, because they help to overcome credit constraints without creating incentives for raiding.
AB - Entrepreneurship is generally regarded as a productive force of change, innovation, and development in modern economies. Particularly for institutionally less developed environments, however, it has been argued that the same energy and talent can also be allocated to unproductive ends. In this article, we present a model that analyzes the allocation of entrepreneurial talent into productive activities and raiding in Postconflict environments, where most formal and informal institutions have broken down. We show that the distribution of initial wealth and entrepreneurial talent play a decisive role. Our analysis also suggests that microcredits can support the transition to a productive equilibrium, because they help to overcome credit constraints without creating incentives for raiding.
KW - Bottom-up reconstruction
KW - Destructive Entrepreneurship
KW - incentives
KW - institutions
KW - Postconflict regions
UR - http://www.scopus.com/inward/record.url?scp=84875120425&partnerID=8YFLogxK
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U2 - 10.1177/0022002712464852
DO - 10.1177/0022002712464852
M3 - Article
AN - SCOPUS:84875120425
VL - 57
SP - 41
EP - 64
JO - The Journal of Conflict Resolution
JF - The Journal of Conflict Resolution
SN - 0022-0027
IS - 1
ER -