The Political Nature of Entrepreneurship in Developing Countries

• In Event: Experiments in African Politics

Abstract

Abstract: We examined the role of political connections in the choices of young prospective entrepreneurs by conducting original surveys and field experiments in Tunisia and Senegal, countries where interest in entrepreneurship is high despite the complex political obstacles facing entrepreneurs. We first administered surveys with embedded conjoint experiments to 1,110 young people to assess the determinants of entrepreneurial intention. Next, we recruited a subsample of survey respondents to participate in entrepreneurship training sessions in Tunis and Dakar where government officials offered advice to young entrepreneurs. The survey results reveal that young people are very uncertain about whether connections will affect their career prospects, yet rate connections to political parties as the most valuable attribute a prospective entrepreneur could possess. Randomized training sessions increased entrepreneurs' intention to create businesses with between 10 and 17% of this effect mediated by an exogenous increase in political connections. Long-term followup shows that although the treatment's effect on connections dissipated over time, the success of entrepreneurial efforts continued to be mediated by political connection levels. By demonstrating the powerful impact of political connections on desires to enter the business world, these results suggest that entrepreneurship promotion efforts will work better when conducted in tandem with high-level government engagement.

Authors

• Robert Kubinec, University of South Carolina

• Abhit Bhandari, Vanderbilt University

• Sekou Jabateh, New York University

• Hamza Mighri