The Impact of Constitutional Protection of Economic Rights on Entrepreneurship: A Taxonomic Survey

In this monograph we perform an in-depth analysis of 199 constitutional texts to single out the provisions that, by enhancing economic freedom in a country, are likely to create the institutional side of an entrepreneurial ecosystem favorable to new business creation. The relevant information on constitutions is extracted from the Comparative Constitutions Project: A Cross-National Historical Dataset of Written Constitutions (Elkins et al., 2009), a repository of valuable data on the formal characteristics of written constitutions for most independent states since 1789. Data on entrepreneurial activity in the countries taken into account in the empirical analysis are extracted from the World Bank Group Entrepreneurship Database. The study addresses a question of primary importance for the analysis of entrepreneurship: Does constitutional protection of principles and values which are commonly referred to as the "economic constitution" and which are usually associated with a country's entrepreneurial activity, positively influence the rate of new firm formation and the total endowment of entrepreneurship capital in that country? We are able to give a positive answer to this question and this legitimates us to recommend inclusion of provisions prone to entrepreneurship in the constitution of any country.