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Federal spending on homelessness has increased significantly in recent years. I estimate the relationship between federal homelessness funding and homeless counts in 2011, 2013, and 2015 cross sections. I instrument for funding using a community's pre-1940 housing share, a key variable in an originally unrelated funding formula borrowed for homelessness grants. Funding increases sheltered homelessness; meanwhile, funding is unrelated to unsheltered homelessness. Lower bound estimates suggest that the minimum cost of reducing unsheltered homelessness has increased over time, from $16,400 in 2011 to $20,800 in 2013 to $50,000 in 2015. In 2013, an additional $1 thousand dollars corresponds to a .309 higher homeless rate per 10,000 people. The effect is larger for families than individuals. Funding is positively related to chronic homelessness and is unrelated to youth and child homelessness. My results suggest limitations on federal funding's ability to reduce homelessness among some of the most marginalized groups in society.

While scholars agree that institutions are critical for enabling and constraining entrepreneurial action, the mechanisms by which institutions shape individual entrepreneurs’ actions remain underdeveloped. Whereas a prior work focuses on the direct and moderating effects of institutions on entrepreneurial action, we propose that institutions also indirectly influence entrepreneurial action through their influence on the mental models of actors. To that end, we theorize an underexplored role of institutions: shaping three socio-cognitive traits (SCT)—opportunity recognition, entrepreneurial self-efficacy, and fear of failure—that influence entrepreneurial action. Using GEM data from 735,244 individuals in 86 countries, we test and find evidence that SCTs mediate the relationship between institutions and opportunity entrepreneurship. The social legitimacy of entrepreneurship exerts a weaker direct effect on opportunity entrepreneurship but a stronger indirect effect through the SCT channels relative to pro-market institutions. Our study thus provides more nuanced findings concerning the ways formal and informal institutions, as well as the direct and indirect effects of institutions, enable and constrain entrepreneurial action.Plain English SummaryPro-market institutions and favorable societal attitudes do not only create beneficial market conditions for entrepreneurship; they also potentially shape the cognitive characteristics conducive to entrepreneurial action. In a sample of 735,244 individuals in 86 countries from 2002 to 2015, we find that formal and informal institutions increase the socio-cognitive traits that, in turn, increase the propensity for opportunity-motivated entrepreneurship. This reveals that the effects of institutions on individual engagement with entrepreneurship are both direct and indirect, suggesting the importance of policy and culture in shaping the cognitive foundations of the entrepreneurial process.

Amidst considerable debate on the relationship between entrepreneurship and economic inequality, scholarship only indirectly addresses how entrepreneurship informs individuals’ relative well-being. We theorize on the nuanced relationship between entrepreneurship and equality of eudaimonic well-being through the lens of New Institutional Economics. Drawing on theories of human flourishing, we suggest that entrepreneurial action is an underappreciated mechanism by which individuals pursue well-being. Equality of well-being is thus influenced by a society’s entrepreneurial accessibility: the freedom of individuals to choose to engage in entrepreneurial action. We present a multilevel framework in which institutional factors enable entrepreneurial action by promoting entrepreneurial accessibility—a factor, that, in turn, affects well-being for individual entrepreneurs as well as societal eudaimonic equality. The ex ante conditions for equality of well-being entail institutions that yield broad entrepreneurial accessibility. Our work highlights the institutional prerequisites for human flourishing in the entrepreneurial society beyond (unequal) economic distributions.Plain English SummarySo much attention is given to entrepreneurship’s relation to income inequality that the more fundamental issue of well-being is often overlooked. Where many look to the relative equality of incomes as a societal benchmark, we call for a focus on equality in the opportunity to pursue well-being. We further suggest that engaging in entrepreneurship is a vital means of this pursuit. In turn, the freedom to pursue entrepreneurship regardless of social status or background becomes a central factor in the relative well-being of members of society—even for those who do not choose entrepreneurship. Thus, the major implication of this study is that rather than seeking to equalize outcomes, policy should be designed to promote the freedom for individuals to flourish—especially through entrepreneurial action.

In this issue, Elert and Henrekson offer an important and promising framework through which Austrian scholars to contribute to the study of entrepreneurship and innovation. I suggest a way to build upon their framework: incorporating insights from public choice. While Elert and Henrekson downplay self-interest in their institutional analysis, public choice offers important insights about the formation of public policies that affect innovation activity. Without this, a gap exists among the identification of institutional bottlenecks that hinder collaboration in the innovation bloc and the subsequent alleviation of those bottlenecks. Infusing public choice assumptions into the Collaborative Innovation Bloc framework reveals several promising areas for future research.

In the wake of the financial crisis, the United States government introduced a new large-scale initiative to address homelessness. The policy mandate is marked by both an unprecedented increase in federal funding and a dramatic reallocation of resources toward Housing First , a service model emphasizing immediate housing subsidization. Although this service paradigm has received support from a sizeable literature, our knowledge of its success to date has been limited. This paper sheds light on the unobservable or unmeasured costs of this new centralized approach to ending homelessness. I argue that federal homelessness policy under the Housing First approach 1) generates resource misallocation, 2) exacerbates the Samaritan’s dilemma, and 3) invites rent seeking.

PurposeThe purpose of this paper is to present and compare alternative theoretical frameworks for understanding entrepreneurship policy: targeted interventions to increase venture creation and/or performance. The authors contrast the Standard view of the state as a coherent entity willing and able to rectify market failures with an Individualistic view that treats policymakers as self-interested individuals with limited knowledge.Design/methodology/approachThe authors draw on the perspective of “politics as exchange” to provide a taxonomy of assumptions about knowledge and incentives of both entrepreneurship policymakers and market participants. The authors position extant literature in relation to this taxonomy, and assess the implications of alternative assumptions.FindingsThe rationale for entrepreneurship policy intervention is strong under the Standard view but becomes considerably more tenuous in the Individualistic view. The authors raise several conceptual challenges to the Standard view, highlighting inconsistencies between this view and the fundamental elements of the entrepreneurial market process such as uncertainty, dispersed knowledge and self-interest.Research limitations/implicationsEntrepreneurship policy research is often applied; hence, the theoretical rationale for intervention can be overlooked. The authors make the implicit assumptions of these rationales explicit, showing how the adoption of “realistic” assumptions offers a robust toolkit to evaluate entrepreneurship policy.Practical implicationsWhile the authors agree with entrepreneurship policy interventionists that an “entrepreneurial society” is conducive to economic development, this framework suggests that targeted efforts to promote entrepreneurship may be inconsistent with that goal.Originality/valueThe Individualistic view draws on the rich traditions of public choice and the entrepreneurial market process to highlight the intended and unintended consequences of entrepreneurship policy.

In an anecdote originating during British rule of India, colonial leadership sought to reduce the number of cobras-highly venomous snakes-in Delhi by offering a bounty for cobra tails to reduce their supply. Initially, wild cobras were hunted, and all appeared well. When a suspiciously large stream of tails was redeemed for payment, however, the government discovered that local entrepreneurs were breeding cobras for profit and so immediately disbanded the reward system. In response, the breeders released their cobras, increasing Delhi's serpent population dramatically. The incident is the presumptive basis for the term the cobra effect: instances where government efforts to solve a problem exacerbate it.

[...]we explore the discipline's approach to teaching a key concept associated with government: public good provision. [...]there is the opportunity to show students how economics provides a framework to understand and explain both the headlines they read (like those mentioned above) and the policies that affect their lives now and in the future.

This dissertation explores the interactions between non-market entrepreneurs (e.g., activists and homeless services organizations) and public policy in the fight against homelessness. In the first chapter, I investigate how public support alters non-market organizations’ behavior. I draw on the emerging literature on organizational sponsorship to understand how public support affects the diffusion of a new homeless shelter model. I find that public funding alters the non-market entrepreneurial process, leading organizations to radically change their approach to homelessness by adopting the government’s preferred shelter type in lieu of traditional or alternative programs. The second chapter asks why the government came to support innovation in homeless services in the first place. I synthesize insights from several core strands of entrepreneurship theory to provide a theory of public entrepreneurship that explicitly considers the role of evidence in the policy process. I apply this theory to explain how a complex process of public entrepreneurship involving activists, experts, and policymakers gave rise to a shift in homelessness policy in the United States at the turn of the 21st century. The final chapter asks whether federal homelessness funding reduced homelessness in communities in the period I study. I find that communities that receive greater funding have higher rates of “sheltered” homelessness (people housed by homeless services organizations); however, they do not actually have lower rates of “unsheltered” homelessness (people sleeping outside). This finding suggests a tenuous link between non-market organizations, policy change, and people experiencing homelessness—highlighting some of the limits on the government’s ability to “guide” the entrepreneurial response to complex social problems.