Working Paper No. 1144

Status Quo Institutions and the Benefits of Institutional Deviations

Published: December 8, 2016, revised March 2017Pages: 61Keywords: Regulation; Norms; Innovation; Entrepreneurship JEL-codes: L50; M13; O31
Published version

Status Quo Institutions and the Benefits of Institutional Deviations Niklas Elert and Magnus Henrekson


We nuance the widely held view that well-functioning institutions are the ultimate prerequisite for innovation and entrepreneurship. This is done by putting the spotlight on the role that formal and informal institutions have in serving the economic status quo, conserving old habits and incumbent economic interests. Therefore, existing institutions often act as impediments to entrepreneurship and innovation.

We argue that a common yet underappreciated source of institutional change arises when individuals deviate from the behavior stipulated by existing institutions. All types of deviations are certainly not beneficial, but when they take the form of innovations introduced by entrepreneurs, they can be a powerful source of economic and institutional change. An institutional setup should strike a balance between the need for stability that protects people’s expectations and flexibility and adaptability to innovations and the ensuing entrepreneurship.

 

 

Niklas Elert

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Ph: +46 8 665 4583
niklas.elert@ifn.se

Magnus Henrekson

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Ph: +46 (0)8 665 4502
magnus.henrekson@ifn.se

Integrating Immigrants into the Nordic Labour Markets

An Overall Perspective

Pages-from-2019-Calmfors-Gassen---Integrating-Immigrants-into-the-Nordic-Labour-Markets.gif

Denmark, Finland, Norway and Sweden face similar problems of integrating large groups of immigrants, especially low-educated ones from outside the EU, into their labour markets. In this volume, edited by Lars Calmfors, IFN, and Nora Sánchez Gassen in cooperation with researchers from across the Nordic Region analyse how labour market integration of immigrants can be promoted. 

About the book

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