Entrepreneurial Action, Public Policy, and Economic Outcomes

Entrepreneurial Action, Public Policy, and Economic Outcomes

New Thinking in Political Economy series

Edited by Robert F. Salvino Jr., Michael T. Tasto and Gregory M. Randolph

Examining the economics of entrepreneurship from the perspectives of productive versus unproductive entrepreneurial behavior and the role of institutions in economic outcomes, the authors in this book seek to advance the research on institutions by providing a simple framework to analyze the broader, long-term consequences of economic policies. They examine the relationship between economic freedom and economic outcomes and summarize empirical evidence and theory. The book also provides practical policy solutions that are based on the authors' cogent analyses.

Chapter 3: Economic freedom, entrepreneurship and growth

Rachel L. Coyne

Subjects: business and management, entrepreneurship, economics and finance, austrian economics, politics and public policy, public policy


This chapter provides a survey of the literature linking economic freedom, entrepreneurship, and economic growth and offers the economic theory and logic behind the expected positive empirical relationships between these three key variables. The important distinction between productive and unproductive entrepreneurship is explored to explain how entrepreneurship can impact economic growth in both positive and negative ways. Economic freedom's relationship to economic growth is detailed through an analysis of the formal and informal institutions associated with economic freedom and how these institutions are connected to economic outcomes. Finally, this chapter provides a review of empirical work linking entrepreneurship, economic freedom, and economic growth, highlighting that the three variables have the expected positive relationships.

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