Constrained Optimization: The State and the Indian Entrepreneur

Abstract

The quality of entrepreneurship has been considered by many scholars as a critical factor in the economic development of a society. While some scholars have sought to explain the difference in entrepreneurial quality among societies based on cultural grounds, this paper argues that entrepreneurship is a function of the incentives derived from institutions and the historical context that entrepreneurs face. It also argues that entrepreneurs are not inert actors in the institutional and historical process, but are actively engaged in shaping the political-economic landscape which they inhabit. The paper undertakes an historical analysis of Indian entrepreneurship in the last hundred years as an illustrative example of this theory of entrepreneurial dynamics in a society.