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IR Policy

IR Policy

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Political instability and African entrepreneurship.
(1993-10) Ahwireng - Obeng, Frederick
Several close observers of African economic development believe that political instability (PI) has stunted economic progress in Africa by decreasing entrepreneurial activity. However, whether African entrepreneurs themselves regard PI as an obstacle or an opportunity, how they respond to it and how it affects their behaviour as entrepreneurs are questions yet unanswered. This inquiry is the central focus of the paper. The evidence from the African business and political literature, periodicals and newspapers suggests no direct relationships between PI, the volume of entrepreneurial activity and national welfare. On the other hand, different kinds of PI tend to create different sets of opportunity conditions for profitable entrepreneurial, initiatives. African entrepreneurs have responded rationally to potentially high private pay-offs resulting from PI and resorted to survival strategies to offset perceived and real obstacles. A considerable part of these initiatives are socially unproductive, suggesting the need for African governments to forge mutually beneficial coalitions with entrepreneurs in order to increase national welfare. The real problem is whether reliable coalitions are feasible.