Fostering productive entrepreneurship in post-conflict economies: the importance of institutional alignment

Abstract

The aim of this article is to examine the impact of institutional development on entrepreneurship in post-conflict environments. Drawing on in-depth interviews with Kosovar entrepreneurs the article highlights how the experience of fostering entrepreneurship in a post-conflict, new born state is distinct from transition economies. The article finds that Kosovo has not encountered the same institutional challenges which have stymied entrepreneurship in transition economies which have been hampered by ‘path extension’ of institutions. Instead there has been a ‘path break’ resulting in a reshaping of formal and informal institutions as supportive of entrepreneurship. However, while positive, the prevailing nature of much entrepreneurial activity is localized with only a limited impact on economic growth. The article concludes by making a number of contributions to institutional theory and policy.