Entrepreneurship and Growth: ¿A Latin American Paradox?

In recent Latin American history, economists have advanced many different recipes to promote the region’s economic growth. Given these differences of professional opinion and the region’s on-again, off-again development, populism and political instability have been frequent responses to economic setbacks in many countries. That economic growth continues to be discussed as a mystery seems, in any case, surprising to us. A convincing argument can be made that economic growth is intimately related to the development of productive entrepreneurial activities in the context of an appropriate institutional setup. Historical evidence shows that the great improvements in standards of living achieved during the past two centuries have been associated with the development of personal resourcefulness and ingenuity under a system of private-property rights and contractual liberty (Landes 1999; Baumol 2002). To be sure, entrepreneurship may take various forms, and certain forms are antithetical to economic growth, so we must bear this fact in mind as we develop our arguments here.