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Entrepreneurship, developing countries, and development economics: new approaches and insights


This paper provides an introduction to this special issue of Small Business Economics dealing with the (long-postponed) integration of entrepreneurship into the discipline of development economics and casting a formal light on the role of entrepreneurship in developing countries. The paper departs from the premise that with more than a billion people living in absolute poverty, it is of great practical importance to understand if and when entrepreneurship is a binding constraint on economic development and catching up in developing countries. This in turn requires at least a deeper theoretical modeling of the entrepreneur in development economics. This special edition contains a number of contributions emanating from the UNU-WIDER project on Promoting Entrepreneurial Capacity, which integrates the disciplines of entrepreneurship and development economics. These contributions model and explore the role of the entrepreneur in key areas of concern for development economics, such as structural change and economic growth, income and wealth inequalities, welfare, poverty traps, and market failures. This introduction discusses and contextualizes these various contributions and their implications for further theoretical and empirical work.

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  1. 1.

    Although a case can also be made that entrepreneurship has been relatively neglected in the mainstream (in particular neo-classical) economic literature, there has over the past two to three decades been important advances in economics in formalizing entrepreneurship—such as the occupational choice model—on which the contributions in this special edition will strongly draw.

  2. 2.

    Widely read development economics textbooks such as the four-volume ‘Handbook of Development Economics’ and the ‘Leading Issues in Development Economics’ does not contain a single chapter or any substantial section on entrepreneurship.

  3. 3.

    Elsewhere I discuss occupational, behavioral, and outcomes-based definitions of entrepreneurship and the difference between entrepreneurship (as process), the entrepreneur (the agent) and the difference between the entrepreneur and the manager of a firm (See Naudé 2008, 2009).


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The papers contained in this special edition of SBE have been prepared for the UNU-WIDER project on Promoting Entrepreneurial Capacity, directed by Wim Naudé. The papers were first presented at the Project Meeting ‘Entrepreneurship and Economic Development’ held in Helsinki, Finland, on August 21–23, 2008. The papers were subsequently revised and then submitted to a double-blind refereeing process. I am grateful to the journal’s editors (particularly Zoltan Acs, David Audretsch, Adam Lederer, and Roy Thurik) for facilitating the publication of this issue. I also wish to thank Adam Swallow and Liisa Roponen for their editorial support, the many referees for their role in the evaluation and selection of the papers, and Barbara Fagerman and Lisa Winkler for their valuable assistance in the management of the project. UNU-WIDER gratefully acknowledges the financial contribution to the project by the Finnish Ministry for Foreign Affairs, and the financial contributions to the research programme by the governments of Denmark (Royal Ministry of Foreign Affairs), Finland (Ministry for Foreign Affairs), Norway (Royal Ministry of Foreign Affairs), Sweden (Swedish International Development Cooperation Agency—Sida), and the United Kingdom (Department for International Development).

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Naudé, W. Entrepreneurship, developing countries, and development economics: new approaches and insights. Small Bus Econ 34, 1 (2010).

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  • Development economics
  • Entrepreneurship
  • Poverty
  • Structural change

JEL Classifications

  • L26
  • M13
  • O1
  • O2