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Title: Markets and institutional swamps: tensions confronting entrepreneurs in developing countries
Authors: Olthaar, Matthias
Dolfsma, Wilfred
Lutz, Clemens
Noseleit, Florian
Keywords: Developing countries
Institutional entrepreneurship
Institutional fabrics
Institutional voids
Issue Date: 2016
Publisher: © Cambridge University Press
Citation: OLTHAAR, M. ... et al, 2016. Markets and institutional swamps: tensions confronting entrepreneurs in developing countries. Journal of Institutional Economics, 13 (2), pp. 243-269.
Abstract: Unrealized potential of entrepreneurial activities in developing countries has often been attributed to missing formal market-based institutions. In new institutional economics, the concept of ‘voids’ is suggested as describing an absence of market-based institutions. In reality, however, ‘institutional fabrics’ are always and necessarily complex and rich in institutions. No societal sphere is institutionally void. In the current article we contribute to existing literature on entrepreneurship and institutional economics s by presenting a framework for studying the richness and complexities of institutional fabrics, as well as ways in which entrepreneurs respond to institutions. Distinguishing four types of institutions relevant for entrepreneurs, we analyze case study data from Ethiopia, and discuss how ‘tensions’ between potentially incompatible institutions result in behavioral frictions. Some entrepreneurs play the complex institutional environment and benefit from the tensions in it, whereas others may drown into the institutional ‘swamp’ they face. Policy makers should acknowledge that institutions not only result from formal policy making and that in many cases a diverse set of institutions is needed to facilitate market exchange and solve constraining tensions. The diversity that results from initiatives of institutional entrepreneurs may create a more effective institutional environment for development.
Description: This paper was accepted for publication in the journal Journal of Institutional Economics and the definitive published version is available at https://doi.org/10.1017/S1744137416000308.
Version: Accepted for publication
DOI: 10.1017/S1744137416000308
URI: https://dspace.lboro.ac.uk/2134/22836
Publisher Link: https://doi.org/10.1017/S1744137416000308
ISSN: 1744-1382
Appears in Collections:Published Articles (Loughborough University London)

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