Institutions and Entrepreneurship: A Comparative Evaluation in SEE

Entrepreneurs are a driving force of transformation in that they activate the new market institutions, including the new private sector; innovate products and processes, markets and social relations; assist companies privatization and restructuring; support competition and transform economic organization. However, there is no guarantee that privatization and liberalization result in entrepreneurship: it may result in ‘proprietorship’, that is, aversion to capital accumulation and competition and orientation towards consumption of the surplus (Scase 2003). As a consequence, entrepreneurs often make no productive contribution at all by producing goods and services that increase the overall economic value produced in the economy, and in some cases play a destructive role (Baumol 1993, 2004).