Political entrepreneur

The term political entrepreneur may refer to any of the following:

  • Someone (usually active in the fields of either politics or business) who founds a new political project, group, or political party
  • A businessman who seeks to gain profit through subsidies, protectionism, government contracts, or other such favorable arrangements with government(s) through political influence (also known as a rent-seeker){{cite web |last1=McCaffrey |first1=Matthew |title=What is a "Political Entrepreneur"? |url=https://mises.org/wire/what-political-entrepreneur |website=mises.org |publisher=Mises Institute |access-date=17 May 2022}}
  • An individual who identifies and acts upon opportunities to influence political outcomes, often by introducing innovative ideas or policies{{Cite web |last=Mccaffrey |first=Matthew |date=July 21, 2011 |title=A Theory of Political Entrepreneurship |url=https://www.researchgate.net/publication/267302440 |website=ResearchGate}}
  • An individual leveraging political connections to access resources and influence policy decisions, often leading to institutional distortion. {{Cite journal |last1=Belitski |first1=Maksim |last2=Grigore |first2=Ana-Maria |last3=Bratu |first3=Anca |date=2021-12-01 |title=Political entrepreneurship: entrepreneurship ecosystem perspective |url=https://link.springer.com/article/10.1007/s11365-021-00750-w |journal=International Entrepreneurship and Management Journal |language=en |volume=17 |issue=4 |pages=1973–2004 |doi=10.1007/s11365-021-00750-w |issn=1555-1938}}

Politician

In the field of business, entrepreneurship involves people taking a risk in order to create new business ventures, to gain advantage over a competitor, and to maximize profits. Political entrepreneurship involves a multitude of people all who want to make a difference or change within policies, political parties, or projects.Sheingate, A. D. (2003). Political entrepreneurship, institutional change, and american political development. Studies in American Political Development, 17(2), 185-203. doi:https://doi.org/10.1017/S0898588X03000129 They are different from other government agents and officials.McCaffrey, Matthew and Salerno, Joseph T., A Theory of Political Entrepreneurship (2011). Modern Economy, Vol. 2, No. 4, pp. 552-560., Available at SSRN: https://ssrn.com/abstract=2487134

=History and cultural context=

Political entrepreneur was a term introduced as early as Robert Dahl's Who Governs.

Its use, however, can be traced back to multi-ethnic coalitions, who after years of political struggles began to make changes. This caused for the decline of the leader within these coalitions and rather cause for the growth of a government who had the interest of the people. This form of political entrepreneurship was for the communal interest.Rabushka, A., & Shepsle, K. A. (1971). Political Entrepreneurship and Patterns of Democratic Instability in Plural Societies. Race, 12(4), 461-476. https://doi.org/10.1177/030639687101200407

In history, partisan entrepreneurs, another term for political entrepreneur, have tried to change the way the government is structured altering power administrations.{{Cite journal |last=Mishra |first=Vivek |title=Political Entrepreneurship - A Review of its Historical Aspects |url=https://www.researchgate.net/publication/309055204 |journal=International Journal of Arts, Humanities and Management Studies}} This can also cause for reinterpretation of political laws, policies or founding documents in order to make these changes.{{Cite journal |last1=Salter |first1=Alexander William |last2=Wagner |first2=Richard E. |date=2018-07-03 |title=Political entrepreneurship, emergent dynamics, and constitutional politics |url=https://www.tandfonline.com/doi/full/10.1080/00346764.2018.1425897#abstract |journal=Review of Social Economy |volume=76 |issue=3 |pages=281–301 |doi=10.1080/00346764.2018.1425897 |issn=0034-6764}}

The political activism of American business as a class has surged and ebbed at various historical moments. Variations in both business and countervailing political mobilization should be approached as problems of collective interpretation and action. Partisan leaders, not businesses or other policy-seekers themselves, have the strongest incentives to absorb the transaction costs associated with either broad-scale business or countervailing collective action. When partisan entrepreneurs see an opportunity to alter the distribution of power at the national level, they engage in a discursive exercise to remold business or oppositional interests and undertake the mobilization of these interests.

An analytical framework for dealing with political entrepreneurship and reform was proposed by Michael Wohlgemuth{{Cite journal |last=Wohlgemuth |first=Michael |date=2000-01-07 |title=Political entrepreneurship and bidding for political monopoly |url=http://link.springer.com/10.1007/s001910050015 |journal=Journal of Evolutionary Economics |volume=10 |issue=3 |pages=273–295 |doi=10.1007/s001910050015 |issn=0936-9937}} "based on some new combinations of Schumpeterian political economy, an extended version of Tullock's model of democracy as franchise-bidding for natural monopoly and some basic elements of New Institutional Economics. It is shown that problems of insufficient award criteria and incomplete contracts which may arise in economic bidding schemes, also—and even more so—characterize political competition. At the same time, these conditions create leeway for Schumpeterian political entrepreneurship. The same is true for various barriers to entry in politics. These barriers affect a trade-off between political stability and political contestability which will be discussed with special emphasis on incentives and opportunities for political entrepreneurship in the sense of risking long-term investments in basic political reforms."

Businessperson

The term Political entrepreneur may also be used to contrast a pure "market entrepreneur" with someone that uses the political system to further a commercial venture or their own career. On this definition a political entrepreneur is a business entrepreneur who seeks to gain profit through subsidies, protectionism, government contracts, or other such favorable arrangements with government agents through political influence and lobbying (also referred to as corporate welfare).

Ed Younkins (in 2000) wrote: "Political entrepreneurs seek and receive help from the state and, therefore, are not true entrepreneurs." Similarly, Thomas DiLorenzo says, "a political entrepreneur succeeds primarily by influencing government to subsidize his business or industry, or to enact legislation or regulation that harms his competitors." He says, in contrast, the "market entrepreneur succeeds financially by selling a newer, better, or less expensive product on the free market without any government subsidies, direct or indirect." He gives the example of a mousetrap manufacturer who seeks to gain market share by making a better mousetrap as a market entrepreneur, and a manufacturer who lobbies Congress to ban the importation of foreign-made mousetraps as a political entrepreneur. (DiLorenzo, Thomas, Chapter 7 of How Capitalism Saved America) [http://www.mises.org/story/2317]

In practice, the division between the market entrepreneur and the political entrepreneur can have overlap. Many share characteristics of both types of entrepreneur—political and business—to varying degrees. The term appears to have been coined by Burton W. Folsom Jr. in his book, The Myth of the Robber Barons.{{cite book |last1=Folsom |first1=Burton W. |title=The Myth of the Robber Barons |date=1991 |publisher=Young America's Foundation |location=Herndon, VA |isbn=978-0-9630203-1-4}}

Famous Political Entrepreneurs

Donald J. Trump

One of the biggest Political Entrepreneurs is Donald J. Trump. Before being the 44th president of the United States, Trump was known for being a big name in the hotel and retail businesses. Trump, the business man turned politician, earned his political entrepreneur status by investments, businesses, and his search for more political power. His controversial rise to power is a result of his entrepreneurship mindset.{{Cite web |last=Kaushal |first=Bhavya |date=2018-10-22 |title=8 entrepreneurs and their Stint as Politicians |url=https://www.entrepreneur.com/en-in/entrepreneurs/8-entrepreneurs-and-their-stint-as-politicians/322093 |access-date=2025-02-06 |website=Entrepreneur |language=en}}

Michael Bloomberg

Bloomberg, another political entrepreneur, rose in the business industry with his company Innovative Market Systems. This financial data firm was established in 1982 and spearheaded his career as an entrepreneur. He turned politician when in 2001, he won the race for mayor as a democrat turned republican. Before his political career, he served with the Metropolitan Museum of Art, Central Park and Lincoln Center for Performing arts.{{Cite web |date=2025-03-04 |title=Britannica Money |url=https://www.britannica.com/money/Michael-Bloomberg |access-date=2025-03-10 |website=www.britannica.com |language=en}}

Elon Musk

Musk has seen great success as an entrepreneur for many years. He first saw success as the founder of SpaceX and Tesla motors. Both company's have made him one of the richest people in the world. Later, Musk bought the social media app Twitter, and renamed it X. While appearing as friend and advisor to Donald Trump since 2017 and the start of Donald Trumps second term in 2025, Musk was named head of The Department of Government Efficiency. While Musk is not an elected official, he has stepped into the political world as Trump takes power. Within DOGE, Musk is tasked with improving the efficiencies that are within the federal governments power.{{Cite web |date=2025-01-22 |title=Elon Musk Responds to Nazi Salute Comparisons: "They Need Better Dirty Tricks" |url=https://www.biography.com/business-leaders/elon-musk#advisor-to-donald-trump |access-date=2025-03-10 |website=Biography |language=en-US}}

Political Entrepreneurship in [[Transition economy|Transition Economies]]

In a transition economy, a political entrepreneur can be defined as an individual leveraging political connections to access resources and influence policy decisions, often leading to institutional distortion in transition and developing countries, particularly in post-communist countries. {{Cite journal |last1=Belitski |first1=Maksim |last2=Grigore |first2=Ana-Maria |last3=Bratu |first3=Anca |date=2021-12-01 |title=Political entrepreneurship: entrepreneurship ecosystem perspective |url=https://link.springer.com/article/10.1007/s11365-021-00750-w |journal=International Entrepreneurship and Management Journal |language=en |volume=17 |issue=4 |pages=1973–2004 |doi=10.1007/s11365-021-00750-w |issn=1555-1938}} They emerge in these regions where weak institutions and corruption are present in order to create opportunities for rent-seeking behavior. In many transition economies, political entrepreneurship is driven by the need to control coercively obtained resources. Instead of fostering genuine economic competition, these entrepreneurs function as gatekeepers of state-controlled capital, influencing allocation through bureaucratic decision-making rather than market forces McCaffrey, Matthew and Salerno, Joseph T., A Theory of Political Entrepreneurship (2011). Modern Economy, Vol. 2, No. 4, pp. 552-560., Available at SSRN: https://ssrn.com/abstract=2487134

An example can be found in Russia during the 1990s where a group known as the "oligarchs" capitalized on privatization processes where they acquired significant wealth and political influence.{{Cite journal |last=Shinar |first=Chaim |date=2015-09-22 |title=The Russian Oligarchs, from Yeltsin to Putin |url=https://doi.org/10.1017/s1062798715000319 |journal=European Review |volume=23 |issue=4 |pages=583–596 |doi=10.1017/s1062798715000319 |issn=1062-7987}} The Russian oligarchs emerged as political entrepreneurs in 1985 where Mikhail Gorbachev created various loopholes in the economic liberalization under Gorbachev's Perestroika.{{cite web |title=The first oligarch dies, his kleptocracy thrives |url=https://www.reuters.com/article/idUS1100907644/ |access-date=15 May 2024 |website=Reuters}} This rent-seeking behavior became even more pronounced during Boris Yeltsin's presidency from 1991 to 1999, as oligarchs gained greater political influence by financing his re-election campaign in 1996. As a result, well-connected oligarchs acquired key state assets at drastically undervalued prices through the loans-for-shares scheme in the lead-up to the election.{{cite web |last1=Whitmore |first1=Brian |date=29 September 2005 |title=Russia: The End Of Loans-For-Shares |url=https://www.rferl.org/a/1061761.html |website=RadioFreeEurope}}

Political Entrepreneurs Today

Why could political entrepreneurs be beneficial to society?

With the rise of global technology, political entrepreneurs can be beneficial. Political entrepreneurs can help with the shift of power towards global tech companies by managing and creating new systems as our world evolves. We need people who are willing to come together to address societal problems with creative solutions.{{Cite web |last=Carpio |first=Alvin |date=2017-11-23 |title=The Rise of The Political Entrepreneur and Why We Need More of Them |url=https://www.weforum.org/stories/2017/11/the-rise-of-the-political-entrepreneur-and-why-we-need-more-of-them/ |access-date=2025-01-29 |website=World Economic Forum}}

Political entrepreneurs have significant political and economic power. During a time of instability, Political entrepreneurs can use this power to form international connections that will benefit the country in a time of weakness. They can use CPA, or Corporate Political Activity to encourage relationships and partnerships. Because of this, Political Entrepreneurs thrive in complex governments seeking change and reconstruction, creating an opportunity for both new leadership or in some cases power abuse.{{Cite journal |last1=Espenlaub |first1=Susanne |last2=Khurshed |first2=Arif |last3=Sitthipongpanich |first3=Thitima |date=2024-12-01 |title=Political entrepreneurs and the perils of the top office |journal=Long Range Planning |volume=57 |issue=6 |pages=102476 |doi=10.1016/j.lrp.2024.102476 |issn=0024-6301|doi-access=free }}

See also

References

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