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Since Baumol (1990), the economic literature has distinguished between two broad categories of entrepreneurship: productive and unproductive. The purpose of this paper is to introduce another subcategory: indirectly productive entrepreneurship. Sometimes, profit-seeking entrepreneurs allocate their talents to indirectly productive activities to mitigate the new costs market participants endure as a result of a government regulation. The resources used to mitigate these costs must be diverted from other uses.

This paper uses the example of cell phone storage outside New York City’s high schools to illustrate an indirectly productive entrepreneurial activity that mitigates the inefficiencies or costs created by a regulation. These costs and the resulting entrepreneurship would not have arisen absent the regulation.

These profit opportunities do not result from market entrepreneurial errors or successes but emerge from inefficiencies or unintended consequences produced by government regulations. When evaluating such entrepreneurship, the question is whether such regulation is desirable from an efficiency viewpoint because such entrepreneurship, while making such regulation less inefficient or less costly, diverts resources from other lines of production.

This paper identifies a new category of entrepreneurship: indirectly productive entrepreneurship. This paper also shows that government regulation often deters productive entrepreneurship. However, under some circumstances, regulation can indirectly encourage productive entrepreneurship by creating artificial profit opportunities that would not have existed otherwise.

The purpose of this paper is to examine the correlation between the degree of economic freedom in state institutions and industry employment and then determine how these correlations relate to economic growth.

The authors find the correlation between employment and economic freedom for each NAICS industry code and then calculate total employment in industries with positive correlation and negative correlations. The authors use these values in a GDP equation.

The authors find that employment growth in industries characterized by a negative correlation is associated with a decline in state per capita GDP. When the correlations between employment and economic freedom are positive, state per capita GDP tends to grow, even after accounting for overall economic freedom in the state.

Eliminating or reducing opportunities for firms to use government institutions to gain special treatment will lead to greater economic growth.

This paper allows the data to determine which industries potentially engage in productive and unproductive entrepreneurship.

The purpose of this paper is to deliver insight from the concept of destructive entrepreneurship to program design considerations in conflict regions.

This paper discusses and connects destructive entrepreneurship – an important yet largely unexplored question in the entrepreneurship literature – with security policy, related to evolving directions in the counterinsurgency literature and the traditional disarmament, demobilization and reintegration (DDR) literature.

Counterinsurgency is increasingly the approach used by international and domestic policymakers when dealing with regional conflict, and DDR processes have been used for decades to transition former combatants into civilian life. Three broad considerations are particularly salient (timing/sequencing/phasing, benefits and beneficiaries, and measurement) for DDR programs in the counterinsurgency context.

An incentives-based approach to understanding destructive entrepreneurship can provide useful insights for these two approaches and in particular, how they can be used together.

This paper expands the current scope of understanding of destructive entrepreneurship to the previously unconnected security policy contexts related to counterinsurgency and DDR.

The purpose of this paper is to clarify the distinctions and complementary of William Baumol and Israel Kirzner’s classifications of and insights into entrepreneurship, and thus providing a more complete taxonomy of the substance of entrepreneurial activity. This paper also attempts to clarify distinctions between unproductive and destructive entrepreneurship.

This paper illustrates a more complete taxonomy of the substance of entrepreneurial activity by examining entrepreneurial innovation in drug markets both legal and illegal, identifying cases of productive, unproductive, superfluous, erroneous, destructive, and protective entrepreneurship.

This paper finds that the classifications of entrepreneurship (productive, superfluous, unproductive, erroneous, protective and destructive) put forth by Baumol, Kirzner, and the institutional entrepreneurship literature are complementary. While Baumol seeks to explain the disequilibrating tendencies of entrepreneurship, Kirzner seeks to explain the equilibrating tendencies of entrepreneurship within the institutional context.

This paper utilizes case studies from legal and illegal drug markets to uniquely and better explain the six cases of entrepreneurship. This paper also contributes to the literature by clearly articulating the complementarity of Baumolian and Kirznerian entrepreneurship.

US military contracting has been plagued by systematic corruption, fraud, and waste during both times of peace and war. These outcomes result from the inherent features of the US military sector which incentivize unproductive entrepreneurship. The paper aims to discuss these issues.

Drawing on the insights of Baumol (1990) as their base theoretical framework, the authors explore how the industrial organization of the US military sector creates incentives for unproductive entrepreneurship. Evidence from US government reports regarding US efforts in Afghanistan and Iraq is provided to illustrate the central claims.

The military sector is characterized by an entangled network of government bureaus and private firms whose existence is dependent on continued government spending. These realities, coupled with a dysfunctional procurement processes, reward unproductive behaviors during peacetime. During wartime these incentives are intensified, as significant emergency resources are injected into an already defective contracting system. The recent experiences in Afghanistan and Iraq illustrate these dynamics.

The authors make three main contributions. First, contrary to common treatments by economists, much military spending fails to meet the definition of a public good. Second, waste, fraud, and abuse in military contracting is a result of rules and the incentives those rules create. Third, the only way to change the situation is to change the overarching rules governing the people operating in the military sector.

The purpose of this paper is to consider the impact of Baumol’s work on entrepreneurship has had on framing the economic development puzzle.

In many ways, the intuition behind the paper is straightforward. Entrepreneurs allocate their time and attention based on the relative payoffs they face in any given social setting. If the institutional environment rewards productive entrepreneurship, then the time and attention of entrepreneurial actors in the economy will be directed toward realizing the gains from trade and the gains from innovation. If, on the other hand, there are greater returns from the allocation of that time and attention toward rent-seeking and even criminal activity, alert individuals will respond to those incentives accordingly. The simplicity of the point being made is part of the brilliance in Baumol’s article. As with other classics in economics, once stated the proposition seems to be so basic it is amazing that others did not put it that way beforehand.

It has been 25 years since Baumol published his paper in the Journal of Political Economy, and as pointed out, it has had a significant scientific impact. But to put things in perspective, James Buchanan’s “An economic theory of clubs” published in 1965 has accumulated roughly 3,500 citations, F.A. Hayek’s “The use of knowledge in society,” published in 1945 has over 12,000, and Ronald Coase’s “The problem of social cost” published in 1960 has over 28,000 citations. So Baumol’s paper would put him in rather elite company. The great strength of the paper is to focus the attention on the relative payoffs of productive, unproductive and destructive entrepreneurial activity. But one of the most significant disappointments of the subsequent history of this paper is a methodological one. The comparative case study approach that Baumol employed did not result in a renewed appreciation for narrative forms of empirical research in political economy. It could legitimately be argued that the sort of questions about the fundamental institutional causes of economic growth and development can only be captured with these more historical methods. Attempts to force fit this analysis into a set of methodological tools which have already revealed themselves to be inadequate to do justice of the role of institutions and disregard the underlying cultural norms and beliefs that characterize human sociability.

In this paper, the authors will focus on the contribution made by Baumol’s 1990 paper on the field of comparative political economy, and in particular on the literature on transitional political economy. Section 2 places Baumol’s argument in the context of the failure of neoclassical growth theory. Section 3, the authors argue that although the Baumol framing was an improvement over the old comparative economic systems literature, contemporary transitional political economists have failed to fully realize the implications of the institutional revolution. They have therefore been unable to understand the causes of the heterogeneity of outcomes among those countries that transitioned from communism to the market economy in the 1990s. In Section 4, the authors argue that the political economy of transition will gain from a more sophisticated view of the economic process of the market economy, an appreciation of the entrepreneurial function, and a deeper understanding of the role of formal and informal institutions and their effect on entrepreneurship. The authors will illustrate the point with some examples from the recent history of the Russian political and economic transition. Credible commitment problems and the deficiencies of the institutional reforms of the early 1990s were responsible for the failure of reallocating the entrepreneurial talent that existed in the Soviet economy to productive economic activities. The framework can therefore be used to solve the puzzle of why the announced liberalization of Russian markets and privatization of previously state-owned resources led to economic stagnation, the growth of black markets, and the rise of organized crime, instead of economic development through the operations of smoothly operating markets. Section 5 briefly concludes.

Evasive entrepreneurs innovate by circumventing or disrupting existing formal institutional frameworks. Since such evasions rarely go unnoticed, they usually lead to responses from lawmakers and regulators. The paper aims to discuss this issue.

The authors introduce a conceptual model to illustrate and map the interdependencey between evasive entrepreneurship and the regulatory response it provokes. The authors apply this framework to the case of the file sharing platform The Pirate Bay, a venture with a number of clearly innovative and evasive features.

The platform was a radical, widely applied innovation that transformed the internet landscape, yet its founders became convicted criminals because of it.

Applying the evasive entrepreneurship framework to this case improves the understanding of the relationship between policymaking and entrepreneurship in the digital age, and is a first step toward exploring best responses for regulators facing evasive entrepreneurship.

The purpose of this study was to evaluate the increase in sensitivity of a single risperidone administration in relation to energy intake of Wistar rats treated with cafeteria diet from birth to adulthood (119 days).

During the lactation period, six litters of Wistar rats (dam + 8 pups each litter) were fed one of the following two diets: Control (n = 3) or Cafeteria (n = 3) diets and water ad libitum. After weaning, the males were placed in individual cages, receiving the same diet offered to their respective dams (Control = 18; or Cafeteria = 18) until adulthood (119 postnatal days). The following parameters were evaluated: food and energy intake; macronutrient intake; weight gain; adipose tissue relative weight; sucrose preference; food intake after an administration of risperidone (0.1 mg/kg body weight).

The Cafeteria group showed a higher energy intake in relation to the Control group (p < 0.001). The consumption of energy beyond the individual needs can be understood as a hyperphagic condition. Also, the Cafeteria group reported greater weight gain (p = 0.048) and accumulation of adipose tissue (p < 0.001) with respect to the Control group. These results indicate that the cafeteria diet generated obesity in animals. The Cafeteria group showed reduced sucrose preference (p = 0.031), which is associated with the development of anhedonia-like behavior. In the food intake test, risperidone showed a greater sensitivity in Cafeteria animals, promoting a decrease in their energy intake in relation to the Control group that received risperidone (p = 0.040).

The cafeteria diet promoted hyperphagia, anhedonia-like behavior and obesity in animals. Acute risperidone administration showed greater sensitivity in the Cafeteria group, with a decrease in energy intake. The reported effects may be related to a downregulation of the dopaminergic system in the NAc region.

The purpose of this paper is to evaluate the pathological, biochemical and redox state parameters of liver tissue in Wistar rats treated from birth to adulthood (119 days) with cafeteria diet.

During the lactation, 6 liters of Wistar rats (dam + 8 pups each) were fed one of two diets: control (CTRL; n = 3) or cafeteria (CAF; n = 3) diets and water ad libitum. After weaning, the males were placed in individual cages, receiving the same diet offered to their respective dams (CTRL or CAF; n = 18) until adulthood. The following parameters were evaluated: absolute and relative liver weight; blood, liver and feces biochemistry; liver histology; and redox state of the liver.

When assessing the relative and absolute organ weight, no significant differences were found between the groups. The Cafeteria group exhibited higher values of serum LDL-c (p = 0.008), VLDL-c (p = 0.03) and triglycerides (p = 0.01), as well as several micro and macrovacuoles of fat accumulation, higher hepatic lipid (p = 0.03) and cholesterol (p = 0.0001) levels regarding Control group. Cafeteria group showed greater expression of glutathione-s-transferase (p = 0.03) and superoxide dismutase (p = 0.005) enzymes compared to the control group. In the case of the markers of oxidative stress, there was no difference between the groups.

A simple and standardized cafeteria diet caused an accumulation of fatty acids in liver tissue, inducing a state of hepatic steatosis besides an increased expression of antioxidant enzymes.