June 14, 2011
Department: Wall College of Business
Professor: Dr. Robert Salvino
How easy is it to bring new ideas to the marketplace? Regulations, tax rates and patents can all influence the choices entrepreneurs make when starting new businesses. Entrepreneurs will see this information and use it to work in their favor. Some entrepreneurs will turn to the political arena to lobby for favors (tariffs on competition or tax breaks.) This can explain why certain states and various sectors may see more activity than others. For society, this entrepreneurial activity may or may not be productive in an economic sense. In other words, a great deal of effort is spent redirecting resources rather than creating new growth.
Having acquired a grant from the Koch Foundation, Dr. Rob Salvino of the Wall College of Business Administration is using part of the grant to publish a new book with Michael Tasto and Greg Randolph to emphasize the connection between formal and informal rules in society and the concentration of entrepreneurial activity, not only in the marketplace but also in the political arena. Their goal is to show how intelligent policy design can foster a sustainable foundation for productive entrepreneurship.
The Good, the Bad, and the Ugly: Entrepreneurship and Government Policy, will contain selected chapters discussing the economics of entrepreneurship from the perspectives of economic freedom and institutions, including William Baumol's work on the 'rules of the game" and their effect on the productiveness of entrepreneurial behavior. The groundwork for this approach will be the four cornerstones of economic freedom, a particularly important institutional component of a market economy:
1) Private ownership of resources or property
2) Personal choice
3) Voluntary exchange
4) Free entry into markets, or competition
The authors hope to provide a simple framework to quickly analyze the broader, long-term consequences of economic policies. Ultimately, it will be a useful tool to influence local business and community leaders, those individuals who can have significant impacts on policy reforms from a local to state and ultimately federal level.
Dr. Robert Salvino