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Comparing the effectiveness of private and public sector innovation: A review essay of The myth of the entrepreneurial state

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  • Rodney Yerger

    (George Mason University)

Abstract

Deirdre McCloskey and Alberto Mingardi’s book The Myth of the Entrepreneurial State highlights a critical debate over the effectiveness of state-guided innovation by providing a detailed assessment of the claims made by Mariana Mazzucato in The Entrepreneurial State: Debunking Public vs. Private Sector Myths that the government is the boldest innovator accountable for the greatest value to society. Many of Mazzucato’s assertions of the state providing mission-oriented directionality that drives technology development do not survive the scrutiny of McCloskey’s Supply-Chain Fallacy nor the reality that the government can successfully harness creative destruction. However, there are occasions of public sector innovation success in the development of military technologies, particularly during times of war, which can have beneficial spillover effects. Understanding the sufficient conditions that foster innovation and the impacts of government’s influence over entrepreneurship will have critical implications and pattern predictions on future economic growth and development.

Suggested Citation

  • Rodney Yerger, 2024. "Comparing the effectiveness of private and public sector innovation: A review essay of The myth of the entrepreneurial state," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 37(4), pages 477-494, December.
    • Handle: RePEc:kap:revaec:v:37:y:2024:i:4:d:10.1007_s11138-023-00627-x
    DOI: 10.1007/s11138-023-00627-x
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    References listed on IDEAS

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    More about this item

    Keywords

    Public Goods; Entrepreneurship; Innovation; Political Economy;
    All these keywords.

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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