ABSTRACT
Entrepreneurship generates economic progress, but a look around the world, and a look back through history, shows that some places are more entrepreneurial than others, and that some places are more prosperous than others. Obviously, the entrepreneurial process that produces prosperity is not automatic. History also shows that places with little entrepreneurship can be transformed to become entrepreneurial and more prosperous, so whether an economy is entrepreneurial is not determined by exogenous factors, and can be changed. Similarly, while some places in the world have enjoyed substantial economic progress, others have stagnated and even sunk into economic decline. If entrepreneurship is the key to economic progress, and if economies can be made more entrepreneurial, an important policy issue is how entrepreneurship can be encouraged. The answer is that institutions that create economic freedom by protecting property rights and removing impediments to market exchange encourage entrepreneurship and lead to economic progress.
