Entrepreneurship in a hybrid political order: The case of Lebanon

In a new article just published in the Journal of Development Studies, MSM’s Nora Stel and Wim Naudé report on pioneering research done on how the institutional context of a country affects the behaviour and performance of its entrepreneurs – and vice versa.

Although much is currently been written on ‘institutions’ (the ‘rules of the game’) and entrepreneurship, so far the bulk of the work on developing countries have been concerned with weak governance. It has largely omitted consideration of hybrid forms of governance. The latter is in fact much more common in developing countries, and refers to governance where political and economic power is divided along “diverse and competing authority structures” often in the form of Western models of governance co-existing with local indigenous systems of governance. In hybrid political regimes formal and informal authorities exist and represent an oligopolistic organisation of society, business and politics.

The authors focus on Lebanon as it has 18 religious communities that each has their regional strongholds, political parties, social institutions, and armed militias. The Lebanese State itself is hence consociational with inter-sectarian power sharing that generates endemic patronage and clientelism. As a result entrepreneurs in Lebanon are found to report political instability as their greatest single obstacle to doing business. The hybrid order also channels entrepreneurs into lobbying and bribery –into what the authors describe as a “public-private entanglement”. The authors find these effects particularly strong in the electricity supply industry, with electricity a key input for businesses and hence higher costs of electricity which negative affects the performance of all firms.

About the authors:
Nora Stel is Assistant Professor in Governance and Human Rights at MSM and PhD Candidate at Utrecht University’s Center for Conflict Studies. She is an affiliated scholar at the American University of Beirut’sIssam Fares Institute for Public Policy and Foreign Affairs.

Wim Naudé is Dean of Maastricht School of Management and Professor in Business and Entrepreneurship at Maastricht University, and a Research Fellow at IZA, the Institute for the Study of Labour in Bonn.

To read the full paper see:
Stel, N. and Naudé, W. (2016). Public-Private Entanglement: Entrepreneurship in Lebanon’s Hybrid Political Order, The Journal of Development Studies, 52(2): 254-268.
Available at:http://www.tandfonline.com/doi/full/10.1080/00220388.2015.1081173

Blogs Nora Stel
Mukhtars in the middle: Connecting state, citizens and refugees
Lebanon’s massive garbage crisis isn’t its first. Here’s what that teaches us
Palestijnse vluchtelingen in Libanon voelen zich steeds meer buitenspel gezet

For an complete overview of the blogs of Nora Stel, click here.