Abstract
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.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
