
Why Are Some Societies More Entrepreneurial than Others? - elsewhen
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3449762
======
kayaeb
There's a good book on this called "Why Nations Fail," [1] they posit that
extractive economic policies (corrupted governments) essentially de-
incentivize entrepreneurial businesses, while inclusive policies cause them to
thrive.

They use this argument to counter "Guns, Germs, and Steel" [2] to explain
dramatic economic differences across country borders in similar environments.

[1] [https://www.goodreads.com/book/show/12158480-why-nations-
fai...](https://www.goodreads.com/book/show/12158480-why-nations-
fail?from_search=true)

[2]
[https://www.goodreads.com/book/show/1842.Guns_Germs_and_Stee...](https://www.goodreads.com/book/show/1842.Guns_Germs_and_Steel?from_search=true)

~~~
ido
Interesting!

Anecdotally I'm an Israeli who moved to Europe (first Austria then Germany)
and at least from my layman's perspective both of these countries seem both a
lot less entrepreneurial than Israel _and_ a lot less corrupt...

So I wonder if something unusual is going on or if one or more of my
perceptions are wrong.

~~~
eternalban
Typically, in a corrupt country, the 'take' of corrupt institutions and actors
critically diminishes available (finite) Capital and distorts the distribution
of what remains.

What is unusual is that Israel is the recipient of largess of the American tax
payers and enjoys continual replenishment of available Capital. Enjoy it while
it lasts.

~~~
jasonvm
Nope. Almost all US aid is in the form of military equipment, and ,
incidentally, 75% must be spent on US-made armaments. So it's more like aid to
the US military-industrial complex.

~~~
eternalban
All nations spend substantial sums of money on defense. If you don't need to
spend n% of your GDP on defense (because someone else is paying for it) that
is money in the pocket.

------
screye
The answer is a resounding yes from me.

The phenomenon cannot be more obvious when viewed at state levels in India.
The Gujarati and Marwadi communities are far more enterprising than others in
India. This is while the federal rules that all communities live under remain
the same.

Anecdotally, the cause for this seems to neatly fall out of my conversations
with friends from these communities.

There is cultural weight to being a person who doesn't work for someone else.
There is cultural pride in ownership that does not exist in most others.

On the other hand, Maharashtrians seem to value being able to separate work
and life. Being able to sleep without worrying about your enterprise and
knowing that the same reliable amount will be deposited in your account every
month is considered important.

These fundamental differences manifest even when people live under other
geographical, political and economical variables.

------
wazoox
In his very interesting book "Kicking away the ladder", the Korean economist
Han Joon-Chang quotes US merchants discovering Japan for the first time in the
1860s. They all marvelled at how lazy the Japanese were. Surprising, isn't it?

Fact is that 1860's Japan lacked all sort of resources, particularly natural
ones. In the absence of resources, there isn't much that you can do to
bootstrap yourself. With all the workers you need and the money to pay them,
you can't build a house if there isn't any timber, mortar and bricks.
Therefore, you're better off simply doing nothing, or things that don't
require much, like playing music and writing poetry.

------
mmsimanga
I can tell you why my society isn't entrepreneurial. We basically believe
everything should be hard and we frown upon people who appear to be taking
short cuts. This attitude served us well before the advent of technology but
now it just gets in the way. Let me give an example. As recently as 50-70
years ago we lived a subsistence way of farming. Working the land was done
using a hoe with a handle that is about 40cm long. Working the fields meant a
lot of time bent over. One of the neighboring tribes decided to lengthen the
handle of their hoes meaning they worked more upright. Probably had more
mechanical advantage. Our reaction as a tribe was to call the other tribe
lazy. To this day this is how we react when something new is introduced, loads
of skepticism and derision of the person who dares introduce something new. By
the time we come around to embracing whatever it is all the opportunities
associated with the new technology have been taken up by the very few
entrepreneurs. Normal from outside the region. Off course they are exceptions
but these are far and few between. We make for a great workforce and we made
for a great army back in the day when tribal wars were a thing. In this modern
world we are getting left behind. So I guess in a nutshell some societies
probably embrace change better than others.

------
jmkd
Always worth zooming out and considering this study that relates average
temperature to economic production, claiming 13C as a sweet spot
[https://www.nature.com/articles/nature15725](https://www.nature.com/articles/nature15725)

~~~
jdm2212
I believe the conventionally accepted explanation for this is Acemoglu's, and
it's that GDP is an Nth-order effect of climate. Warm weather -> highly
productive agriculture -> landholders become extremely wealthy -> oligarchic
government -> low GDP. Think of the American North and South before the Civil
War, where slavery and inequality took hold in the highly agriculturally
productive South but never in the North. The North wound up poor and more
egalitarian, but eventually industrialized and overtook the South.

Edit: warm weather also happens to correlate with another natural resource:
oil. Oil tends to produce a similar dynamic -- whoever owns the oil owns the
government and badly mismanages the government for their own benefit. The
exceptions prove the rule: Alaska and Norway were both established,
egalitarian societies _before_ the oil was found, in contrast with Middle
Eastern petrostates, Russia and Venezuela.

~~~
cambalache
Is Alaska a big outlier inside the US regarding equality? Because the US as a
whole is nowhere near the level of Norway in terms of equality. As a matter of
fact Russia has a lower Gini coefficient. Even in the Americas US is below
Canada, Uruguay, Argentina among other and almost parity with Venezuela.

The problem in Venezuela is that the state has been weak and ineffective. Weak
!= Small, you have this suffocating bureaucracy which does nothing.

~~~
jdm2212
Oil today, or fertile agricultural land 150 years ago, doesn't make government
big or small. It just frees whoever controls the natural resource from
accountability to others and lets them do whatever they want to do. Putin
wants to run a superpower, so he pours the oil money into a bigger defense
budget than Russia's GDP justifies. Maduro is (notionally) a socialist and
pours the oil money into a bloated bureaucracy.

------
prepend
I think it has something with redemption and new identities. I think societies
that allow reboots lead to greater risk taking.

Also capital and risk distribution. I visited Amsterdam and was interested in
their history and how it took off after the invention of the corporation.

Corporations can end and the knowledge from them can go into a new venture
(redemption). They can also raise capital through distributed ownership and
distributed risk.

~~~
paganel
> I visited Amsterdam and was interested in their history and how it took off
> after the invention of the corporation.

I wonder if anyone has written a history of the Dutch economy that can be also
accessible to non-Dutch readers (i.e. translated to either English or French
or Spanish). From a very outside view (i.e. mine) the Dutch used to be a very
entrepreneurial society/people in the 1600s going into the 1700s, but it seems
that by the 1800s that spark had gone. They're of course still one of the most
developed nations in Europe and in the world, but it looks like in terms of
risk-taking they're the same as us, the rest of the Europeans, i.e. behind the
Americans and I'd say even the Chinese.

As a similar example the Italian economic historian Carlo Cipolla was blaming
the wars and the associated pests/famines of the early 1600s for Italy's
towns' fall into economic irrelevance. Not sure if they're easily accessible
on the Internet, but in one of his books [1] he presents some charts where the
population of entrepreneurial Italian cities of that time such as Firenze,
Venice, Brescia, Lucca or Bergamo felt by more than 50% during 1600-1630 (give
or take), which caused them not to be able to compete against Flemish and
especially English clothes-related industry. I wonder if anything similar
happened to the Dutch.

[1] [https://www.amazon.com/Before-Industrial-Revolution-
European...](https://www.amazon.com/Before-Industrial-Revolution-
European-1000-1700/dp/0393311988)

~~~
dr_dshiv
As an American transplant to Amsterdam, here's my take:

The Dutch have embedded innovation/entrepreneurship so deeply into their
society, it looks very different from American-style innovation. There are so
many little innovative things here that _startups_ would never get to. It is
continuous, but not relentless -- as in, it occurs within the paradigm of
working hours. Further, it tends to reflect the systemic intelligence of
organizations, at a large and small scale.

Example Domains:

Transportation (all aspects), payment (online and off), festivals (incredibly
innovative!), road construction, garbage pickup (yes! It's so futuristic!),
child care & education, psychology, medicine...

In any of these areas, I can readily think of smart innovations that would
impress Americans. The innovations are not of the "Uber for X", digital
startup-based type. So, seeing the lack of Dutch statups in VC portfolios
might suggest a less innovative culture. Here, entrepreneurship often occurs
within the context of existing systems and organizations. It's a different,
complementary way to think about things -- I rather like it.

Also, there are only 17 million people in the Netherlands. It's a much smaller
market and startups that successfully capture this market don't necessarily
transfer to external markets.

Further, when things are working really well, there isn't always a need for
disruption... Nevertheless, things in the Netherlands never seem "done". Sure,
there is great transportation, healthcare and education -- but that's because
they are always ripping it up and building the future of it. Sometimes in the
States, things can seem like we are just trying to keep the status quo from
falling apart too badly.

~~~
mcv
> _" garbage pickup (yes! It's so futuristic!)"_

Is our garbage pickup futuristic? It's certainly efficient and practical
(which are probably the most important and most typically Dutch values), but
there's nothing about underground containers that's out of reach for other
countries.

I think much of our innovation and efficiency is actually in government
organisations, from garbage pickup to our efficient and well-maintained
infrastructure (you really notice the road quality drop when you cross the
border with Belgium or Germany), to our 'polder model': talks between
government, employers and labour unions to decide on employment standards that
everybody can agree to so we won't have any strikes.

It's true that we don't have the kind of startup culture that California has,
despite attempts from the government. I'm not sure why, but then again, even
in the 17th century, our big innovation was the invention of the
multinational, globe-spanning corporation, not the small startup. And a big
part of the innovation there was not so much the risk taken, but the way those
risks were mitigated: financial products that spread the risk around. Many
ships at the time were funded were funded through a system of life insurance.

~~~
mercer
> It's true that we don't have the kind of startup culture that California
> has, despite attempts from the government.

I've been part of an Amsterdam startup and 'started' my own companies with
various people a few times, and my impression is that there are a few reasons
for this:

1\. much as it's easy to start a company, it seems difficult to get funding.
The government seems to be trying, but it still feels less than what I read
about SV (or at least SV in the past?).

2\. the market is much smaller. once you need to deal with other countries
with other languages, (tax) regulations that are often much more complicated
and bureaucratic, cultural differences, etc., things get much more difficult,
and I've noticed multiple small startups around here just don't bother.

3\. for tech startup type workers at least, but probably for most workers
here, there's less of a culture of jumping into a startup. we like our steady
jobs, we are quick to complain about overwork, and there's all sorts of (good)
protections that possibly make it more difficult to find employees and grow.

In regards to 3, the startup I worked for consisted of a just-out-of-school
programmer, a wealthy-and-connected but inexperienced CEO, and a fantastic and
experienced designer who, in his forties, decided to do something 'risky' and
'new'. He also came from wealth but had done very well for himself too. and
later a social media/marketing person who was just out of college.

So the startup either involved people who could put it on their CV regardless
of how well things went, or people who could afford faffing about for a while.
I suppose I was in the latter camp, although that's more because I just don't
spend much money and make enough as a front-ender currently that I can do
'cool' things without much skin in the game.

------
bluedino
It's just a culture thing. My neighbors are Lebanese, almost everyone in the
family either owns a store, or works for one of the other people in their
store. Only a few of them have 9 to 5 jobs not related to the family.

They help each other out, you can use my van to pick things up, you can use
the corner of my store to start your own store, etc.

~~~
simonh
My wife is Chinese and Chinese people are the same way. Families treat
resources in a much more communal way than my UK family, but also outside the
family networking and personal social bonds are crucial to getting things done
and finding new business opportunities.

I suspect this is how it is across most of the world though. If you can't rely
on 'society' and particularly the government or legal system, you find ways to
rely on each other instead. In the 'developed world' those social bonding
muscles have atrophied away.

~~~
nitwit005
There's a danger of only seeing the portion of the culture that left their
country with the intent to start a business.

I see a decent number of Japanese businessmen where I am. I know they're not
at exactly representative of Japan. They're part of companies that thought
investing in Silicon Valley would be a good idea and were willing to move
here.

------
known
Why startups condense in America?
[http://paulgraham.com/america.html](http://paulgraham.com/america.html)

------
filleduchaos
This is a topic that's particularly interesting to me because there's an
ethnic group in my country - the Igbo - that are so pervasively,
aggressively[0] entrepreneurial that it's become a meme. I can't really think
of another culture that has business woven as tightly into its very bones - I
haven't read the entire paper yet, but I'm curious to see if it mentions them
at all.

[0] In a good way. Several people have noted that the Igbo pretty much
invented venture capital.

~~~
barry-cotter
The Igbo are an example of a merchant minority, like both Ashkenazi and
Sephardi Jews, Armenians, Parsis and the Chinese in Southeast Asia, Lebanese
in West Africa, Latin America and elsewhere and Yankees in the US South.
There’s always hostility to merchant minorities from the majority population
but the degree of difference modulates the hostility. No Yankee enclave was
ever burned in a pogrom in the South whereas Jews everywhere in the Old World,
various Christians in the Ottoman Empire and the Chinese in SE Asia all dealt
with those regularly enough. The Igbo tried to secede from Nigeria after
independence and it was an utter bloodbath.

We know this is at least partly cultural because genetically Turks in Turkey
are over 90% Greek or Armenian with some additional Balkan and Caucasus
contribution and after mutual ethnic cleansing rid Turkey of Christians and
the rest of the Balkans of Muslims Turks eventually filled those socioeconomic
niches. Until Erdogan it looked like Turney would be richer than Greece pretty
soon.

Any Chua wrote a great book on merchant minorites, _World On Fire_.

~~~
filleduchaos
Wikipedia articles *do very little to accurately convey cultures/situations
one doesn't actually have experience with. The clear majority of Igbo people
live in their homeland in Southeastern Nigeria. Even with the quarter to a
third of Igbos that live in other parts of Nigeria I find the Western
arrogance in calling people living in their own country a "merchant minority"
rather dull.

(For more context, there are three dominant ethnic groups in Nigeria, and none
of them form a majority. The largest group - the Hausa - doesn't make up even
30% of the population, and the Igbo make up over 20% in current estimates)

> The Igbo tried to secede from Nigeria after independence and it was an utter
> bloodbath.

This was far, far more complicated than is being made out here.

~~~
barry-cotter
I’m sympathetic to the claim that it’s complicated, most things are, but the
Igbo are clearly a merchant minority, and they’ve clearly been subjects of mob
mass killings, aka pogroms as well as government sponsored mass killings based
on their ethnic identity. Like every other merchant minority they also
emigrate disproportionately looking for economic opportunities. If you guessed
the ethnic makeup of Nigerians based on US or British populations you’d think
Igbo were at least half of the population, not a minority.

[https://en.wikipedia.org/wiki/1966_anti-
Igbo_pogrom](https://en.wikipedia.org/wiki/1966_anti-Igbo_pogrom)

The 1966 anti-Igbo pogrom was a series of massacres committed against Igbo
people and other people of southern Nigerian origin living in northern Nigeria
starting in May 1966 and reaching a peak after 29 September 1966.[1] These
events led to the secession of the eastern Nigerian region and the declaration
of the Republic of Biafra, which ultimately led to the Nigeria-Biafra war .
The 1966 massacres of southern Nigerians have been described as a holocaust by
"Greene -1975 . The Struggle for Secession 1966–70: A Personal Account of the
Nigerian Civil War by N. U. Akpan. The Nigerian Civil War 1967–70. The Royal
African society in January 1975 and others have variously been described as
genocide.

[https://en.m.wikipedia.org/wiki/Nigerian_Civil_War](https://en.m.wikipedia.org/wiki/Nigerian_Civil_War)

Persecution of Igbo Edit From June through October 1966, pogroms in the North
killed an estimated 80,000 to 100,000 Igbo, half of them children, and caused
more than a million to two million to flee to the Eastern Region.[77] 29
September 1966, was considered the worst day; because of massacres, it was
called 'Black Thursday'.[78][79]

Ethnomusicologist Charles Keil, who was visiting Nigeria in 1966, recounted:

> The pogroms I witnessed in Makurdi, Nigeria (late Sept. 1966) were
> foreshadowed by months of intensive anti-Ibo and anti-Eastern conversations
> among Tiv, Idoma, Hausa and other Northerners resident in Makurdi, and,
> fitting a pattern replicated in city after city, the massacres were led by
> the Nigerian army. Before, during and after the slaughter, Col. Gowon could
> be heard over the radio issuing 'guarantees of safety' to all Easterners,
> all citizens of Nigeria, but the intent of the soldiers, the only power that
> counts in Nigeria now or then, was painfully clear. After counting the
> disemboweled bodies along the Makurdi road I was escorted back to the city
> by soldiers who apologised for the stench and explained politely that they
> were doing me and the world a great favor by eliminating Igbos.

~~~
filleduchaos
> the Igbo are clearly a merchant minority

Do you actually have anything to back this up that isn't a cursory read of
Wikipedia? Who exactly of the over four hundred ethnic groups in Nigeria do
you think is the majority to the Igbo "minority"? How on earth are you
classifying populations in diaspora to people who, again, are living in their
own country?

> they’ve clearly been subjects of mob mass killings, aka pogroms as well as
> government sponsored mass killings based on their ethnic identity

Ethnic discrimination does not automatically equal "merchant minority" (or a
minority at all, in fact). The ethnic discrimination against the Igbo in
Nigeria is a more complex situation than "foreigners bad" or "minorities
different"; it's rooted more in colonialism than in anything else. Which is
understandably difficult for people in the West to understand, but it would
probably be easier if they stopped trying to fit everything into the boxes
they know and actually engaged with what was before them.

> If you guessed the ethnic makeup of Nigerians based on US or British
> populations you’d think Igbo were at least half of the population, not a
> minority.

And the other half would almost entirely be Yoruba, but I don't see you
leaping to call the Yoruba a merchant minority.

~~~
barry-cotter
The Igbo may have many different subgroups but they’re conscious of their own
existence and other groups are conscious they exist. I’m sure there are
liminal groups who are Igbo enough to be discriminated against in Hausa or
Fulani areas but different enough that in majority Igbo areas they wouldn’t be
considered “real” Igbo. Having fuzzy boundaries doesn’t disqualify an ethnic
group from existence or we wouldn’t have any. This consciousness marks them as
different and in areas where they’re a minority that makes them a minority.

They’re also clearly disproportionately involved in commerce. As you said

> there's an ethnic group in my country - the Igbo - that are so pervasively,
> aggressively[0] entrepreneurial that it's become a meme.

If they’re a minority that’s disproportionately involved in trade that makes
them a merchant minority.

They also have non-central features of being a merchant minority, like being
subject to pogroms but as I said previously Yankees are another example which
were never subject to that experience. In Ireland the Protestant minority used
to fill a similar role.

> And the other half would almost entirely be Yoruba, but I don't see you
> leaping to call the Yoruba a merchant minority.

If the Hausa, Fulani and Yoruba had been put into one state by the British,
the Igbo had not abc there was enough inter-state hostility to prevent
migration the Yoruba would be that *Nigeria’s merchant minority. The Yoruba
are clearly more commercial than either of the other groups. But that didn’t
happen and the Igbo are Nigeria’s merchant minority.

Classification as a merchant minority is a matter of degrees. Protestants in
Ireland, Yankees in the US, Germans along the historic borderlands with the
Slavs, all of these groups were a lot more involved in trade than the majority
popular but they also engaged heavily in primary production. Classic merchant
minorities like Jews, Armenians or Parsis didn’t. Igbo are clearly closer to
the first group than the second in those areas where they’re a majority.

~~~
filleduchaos
Have you considered that looking up things on the Internet is not exactly a
suitable proxy for actually having experience with a situation? When I
mentioned Western arrogance, I wasn't anticipating that I was going to run
full-tilt into it immediately.

> The Igbo may have many different subgroups but they’re conscious of their
> own existence and other groups are conscious they exist.

I don't quite see how that has anything in the slightest to do with what I
said - I mentioned nothing about fuzzy boundaries, and what you are "sure of"
unfortunately (or fortunately) has no actual bearing on what is real. The
barest real knowledge of Nigerian history would have informed you that the
Igbo have been in the north of the country for less than a hundred years,
which is pretty much no time at all when talking about ethnic groups.

> As you said >> there's an ethnic group in my country - the Igbo - that are
> so pervasively, aggressively[0] entrepreneurial that it's become a meme.

If you did not understand what I said, you might as well have said so rather
than go on a Wikipedia binge to seem knowledgeable. That statement was
referring to the society-wide master-apprentice system that the Igbo have,
undeniably capitalist but inherently prioritizing the success of the
collective over the success of the individual.

> If they’re a minority that’s disproportionately involved in trade that makes
> them a merchant minority.

They are not a minority, but I am rather tired of trying to explain that to
somebody who apparently thinks US/European-type demographics are the only kind
that exists. How, exactly, do you call one of three major groups that each
make up twenty-something percent of a population a minority without falling
over the cognitive dissonance?

> They also have non-central features of being a merchant minority, like being
> subject to pogroms

They were not subject to pogroms because they were a "minority", jesus christ.
The '66 pogroms in Northern Nigeria were part of a countercoup in
disproportionate response to a coup d'etat earlier the same year which had
ended the lives of (amongst others) two especially beloved Northern political
leaders - Prime Minister Tafawa Balewa and the Northern premier/Sokoto's crown
prince Ahmadu Bello - and placed Easterners in power instead. The pogroms and
the ensuing civil war, which Western Nigeria took opportunistic advantage of,
were largely an attempt to reconsolidate power in the North.

Oh actually never mind me, it was just "'minorities' bad" and not a complex
political situation in a newly independent country.

> But that didn’t happen and the Igbo are Nigeria’s merchant minority.

Or consider that of the Igbo are not among the ethnic groups in Nigeria that
could possibly be called merchant minorities - but that would actually require
knowing more than a quick Google about the country. For example, it's rather
clear that you're unaware of the history between the Yoruba and the Hausa both
prior to and during the colonial era, or that the Fulani are an actual
minority ethnic group both in Northern Nigeria and in the country as a whole
and would actually be fairly classifiable as a "merchant minority" if we cared
to apply political labels made for populations in diaspora to people living in
their own country - the Fulɓe are semi-sedentary, widely dispersed, tend to
live in ethnic enclaves, and have formed several ethnic subgroups throughout
West Africa due to integration with clear majority populations.

~~~
barry-cotter
>> The Igbo may have many different subgroups but they’re conscious of their
own existence and other groups are conscious they exist. > I don't quite see
how that has anything in the slightest to do with what I said - I mentioned
nothing about fuzzy boundaries, and what you are "sure of" unfortunately (or
fortunately) has no actual bearing on what is real. The barest real knowledge
of Nigerian history would have informed you that the Igbo have been in the
north of the country for less than a hundred years, which is pretty much no
time at all when talking about ethnic groups.

You spoke of Nigeria’s 400 ethnic groups as if this was dispositive of the
Igbo existing. Having subgroups does not mean the Igbo do not exist. Being in
what is now Nigeria for less than a hundred years is equally irrelevant.

> As you said >> there's an ethnic group in my country - the Igbo - that are
> so pervasively, aggressively[0] entrepreneurial that it's become a meme. If
> you did not understand what I said, you might as well have said so rather
> than go on a Wikipedia binge to seem knowledgeable. That statement was
> referring to the society-wide master-apprentice system that the Igbo have,
> undeniably capitalist but inherently prioritizing the success of the
> collective over the success of the individual.

If you meant to write something different that’s fine but what you wrote is
obviously true. Without regard to master apprentice models the Igbo do more
buying and selling as middlemen, whether in wholesale or retail trade than
other Nigerian ethnic groups. They are more educated and set up more
businesses.

>> If they’re a minority that’s disproportionately involved in trade that
makes them a merchant minority.

>They are not a minority, but I am rather tired of trying to explain that to
somebody who apparently thinks US/European-type demographics are the only kind
that exists. How, exactly, do you call one of three major groups that each
make up twenty-something percent of a population a minority without falling
over the cognitive dissonance?

It’s entirely possible for a state not to have a majority ethnic group. That
means all ethnic groups are minorities. If one of those groups is
disproportionately mercantile they’re a merchant minority. If they’re
disproportionately likely to enlist in the military that makes them a military
minority. The Hausa are way over represented in the Nigerian military compared
to their share of the population, like Southerners in the US. They’d be a
military minority.

>> They also have non-central features of being a merchant minority, like
being subject to pogroms

>> They were not subject to pogroms because they were a "minority", jesus
christ. The '66 pogroms in Northern Nigeria were part of a countercoup in
disproportionate response to a coup d'etat earlier the same year which had
ended the lives of (amongst others) two especially beloved Northern political
leaders

>> Oh actually never mind me, it was just "'minorities' bad" and not a complex
political situation in a newly independent country.

A complex political situation in a newly independent country is entirely
compatible with pogroms. People were killed for being Igbo in large numbers,
by civilians and the state. This happened in part because of the assumed
political loyalties of Igbo people. I imagine we can both agree on that.

> But that didn’t happen and the Igbo are Nigeria’s merchant minority.

> Or consider that of the Igbo are not among the ethnic groups in Nigeria that
> could possibly be called merchant minorities

Then which ethnic groups are better candidates? Is there a group that is
almost entirely engaged in trade with minimal involvement in primary
production, and that does so for the market when it does?

> For example, it's rather clear that you're unaware of the history between
> the Yoruba and the Hausa both prior to and during the colonial era, or that
> the Fulani are an actual minority ethnic group both in Northern Nigeria and
> in the country as a whole and would actually be fairly classifiable as a
> "merchant minority" if we cared to apply political labels made for
> populations in diaspora to people living in their own country - the Fulɓe
> are semi-sedentary, widely dispersed, tend to live in ethnic enclaves, and
> have formed several ethnic subgroups throughout West Africa due to
> integration with clear majority populations.

The Fulani are a terrible candidate for a merchant minority. They’re
pastoralists who are widely dispersed across West Africa because they kept on
conquering other people as nomads who can move their wealth and people large
distances in short amounts of time are wont to do. Semi-sedentary herders of
cattle, some of whom have settled permanently in towns, with insignificant
numbers of settled farmers of crops are not merchant minorities under any
understanding of the term. Even less so when they were the pre-colonial ruling
class in the areas of Nigeria where they’re a minority. And being in one’s own
country is hardly dispositive of being a merchant minority. The Armenians in
the Ottoman Empire and Jews in inter-war Poland were merchant minorities in
their own countries. If the Igbo were predominantly concentrated in their own
country they’d be a merchant majority there, like Jews in Israel.

------
sharadov
Most important reasons -

1\. Do you tolerate failure? Is it treated as a learning step or are you
marked for life ( huge stigma in some societies,IMO America does this better
than anyone else.).

2\. Individual vs Group Think ( lots of societies don't tolerate people who
think differently, frequently ostracized or outcast).

3\. Capital

4\. IP protection

5\. Immigration Policy - Do you allow immigrants in? Immigrants are hungry,
they come with nothing, expect nothing and have huge appetite for risk.

------
johnchristopher
A day or two ago there was a comment on HN about the differences between
eastern and western societies regarding entrepreneurship and/or motivations
(the west is driven by events while the east is driven by its location). I am
pretty sure there's a link between that comment and that submission but I
can't find the original comment at the moment.

------
ramtatatam
Nations developed different set of laws. Nations with simpler laws make it
simpler to take risk. To run business means take risk, but you will never win
if you have state as your enemy.

I say this from experience, was living in both over bureaucratised country
with such complex regulations that even bureaucrats could not follow. In such
country your business relies on mood/honesty of public servant who handles
you. I was also living in the country where I have not heard from state for 7
years while I was running my business there. I was paying my fair share of
taxes and state was not throwing roadblocks under my legs.

After a bit of thinking I'd also stress out how important juridical system is.
If you have to wait 10 years for ruling you will be definitely more risk
averse.

~~~
jdm2212
The paper argues the opposite explicitly. From the abstract: "Rather, the
evidence shows that the strongest predictors of cross-national variation in
entrepreneurial activity were normative, with social norms being the most
strongly associated with entrepreneurialism and rates of organizational
founding."

~~~
ramtatatam
Well, great :) my experience shows something else :)

------
breadandcrumbel
In the last few years I had the chance to live in Amsterdam, Buenos Aires,
Perth, Sofia and Tel Aviv

From all of those cities Amsterdam and Tel Aviv a lot more innovative and the
number of entrepreneurs was high (at least felt like it)

I think that there are few criterions that a city need to have to become a
tech hub

\- Relatively small city \- Society who worship startups and entrepreneurs \-
Many Programmers and engineers (In Israel every 4 months few hundred talented
programmers are releasing from the top units in the Israel Defence Forces,
bringing high quality manpower to the ecosystem)

There are probably more criterions, those are just few I thought about now

~~~
lnsru
IDF is a great Israel’s advantage. This high quality manpower is not only
highly qualified, but also understands hierarchy and is not afraid to take
responsibility when needed. The same is valid for Switzerland and their
mandatory military service. University cannot replace army.

~~~
cpursley
I don't understand the down votes (maybe they are anti-Israel?). Heck, I'm
pretty libertarian but see the value in a mandatory military service. There's
many lessons to be learned in an environment like that including how to
effectively work together, take initiative as well as the lifelong
relationships you create.

~~~
ch4s3
Doesn’t mandatory service violate the Non-Agression Principle[1]? It is after
all coercive by definition.

[1][https://en.m.wikipedia.org/wiki/Non-
aggression_principle](https://en.m.wikipedia.org/wiki/Non-
aggression_principle)

~~~
dctoedt
The Non-Aggression Principle has its limits, mainly that we humans are by
nature self-centered and tend to short-term, me-focused thinking; we therefore
_sometimes_ need to be compelled to do things we don't want to do, sometimes
for our own good and sometimes for the good of the society that provides us
with the opportunities to do what we _do_ want to do. By analogy, parents know
better than young kids what's best for them and for the family; likewise, _for
some things_ (I stress _some_ ), individuals probably aren't the best judges
of what's best for us personally, let alone for the society as a whole that
provides the framework for our individual choices.

~~~
whatshisface
I wouldn't call the analogy between states and parents insane, but I also
wouldn't call it libertarian. In fact it may be the exact opposite of
libertarian.

~~~
ch4s3
Certainly not libertarian, and I would argue that it should be troubling to
anyone who values civil liberties.

~~~
dctoedt
I don't claim that it's libertarian. Libertarianism, at least as I understand
it, is too simplistic. Personal liberty is of high value, but it shouldn't be
made into an idol.

------
zhdc1
Hot take, but the data for this study comes from the Global Entrepreneurship
Monitor (GEM
[https://www.gemconsortium.org/](https://www.gemconsortium.org/)), which has
been repeatedly beaten to death in the literature (that is, used as a primary
data source).

I'm not saying that she doesn't add anything that hasn't already been
published, I don't know if I see it though.

~~~
zhdc1
Just to add a little context, one issue she ignores entirely is the
relationship between needs based entrepreneurship and the total
entrepreneurial activity (TEA) rate. So, one of the effects you're going to
run into are that the countries with the highest TEA rate are going to be 1.)
developing economies (which have higher needs based entrepreneurship) that 2.)
have reached a high enough development level to have functioning university
systems and 3.) are in the process of adopting western-culture norms.

As a result, all of the traditional determinants of entrepreneurial activity,
such as capital availability, education infrastructure, &c... aren't going to
matter that much because her DV only measures total entrepreneurial activity
(e.g., person A opens a street stand because they don't have any other way of
generating income) or variables that are heavily correlated with TEA, which
isn't what most folks are really interested in when they talk about
entrepreneurship.

However, her sample is also going to be biased in favor of developing
countries that have higher levels of normative western-culture beliefs (e.g.,
support for gender equality), because developing countries with university
systems sophisticated enough to know about & participate in a project such as
GEM (and generate good data) are also more likely to have already started the
process of incorporating western norms into their culture.

Gender equality is a massive value added, and I know a lot of people who have
done actual research which proves it. But, you can't run a couple of
regression models on GEM data and declare that capital access, geography,
education, and all of the other traditional determinants of entrepreneurship
aren't influential.

~~~
bakuninsbart
3.) are in the process of adopting western-culture norms.

Could you expand on this point? What does it include outside of gender
equality. The idea that this is a "western-culture norm" seems slightly
misleading in the sense that gender equality in the workplace was much earlier
and better developed in communist countries that would usually be contrasted
with "western culture" albeit of course also originating in Europe.

------
dustinmoris
I think it's mostly down to human nature. People are tribal. If there's more
people around one who are risk taking and trying to innovate, then others feel
also more inclined to go down this path, whereas if there's almost nobody
around one to do their own startup, then other people will also be less likely
to do it, because noone wants to be alone in their risk taking.

It's seen everywhere in life and starts with kids. When you have one kid
alone, he/she is less likely to jump of a 10m cliff, but if you have a group
of kids who all jump into the water then others will follow. It's the same
with adults, except you replace cliff jumping with risk
taking/innovation/startups.

I base that opinion, because I've seen a lot of friends/family who come from a
very risk averse culture/country move to a different place and then instantly
change their attitudes as they see that it's more normal elsewhere and
therefore they acustom to the thinking that it's more normal and ok to do it.

------
throw0101a
Someone once observed / joked that it may be a result of natural selection:

A lot of the people that left the proverbial Old World for (e.g.) the US were
often the most hopeful, so that's why the US is (stereotypically) optimistic.
The people that stayed behind were the ones that were more dour and/or laid
back.

~~~
Bayart
Those who left were the most at risk of persecution, starvation or
disenfranchisement (due to the shrinking amount of wealth to be inherited,
similar to how half-nobodies congregated around Norman adventurers to invade
England or Italy).

The religious upheavals following the Reformation and the insane demographic
growth following in the wake of industrialization drove the settlement of
overseas colonies, not ethereal qualities like optimism and entrepreneurship.

------
hogFeast
Hm, sounds interesting but looking at rates of entrepreneurship in Fig 1.
amongst the top are (you can't really tell because they are so jammed
together): Vanuatu, Yemen, Cameroon, Zambia, Uganda...I am not sure how smart
it is reason about entrepreneurship in a developed economy against these
nations (and the difference between rates within this chart suggest to me that
most variance is going to be a function of income level).

------
liminal
I wonder if the overall level of life risk influences entrepreneurship? Two
places mentioned often on this page are America and Tel Aviv, both risky
places to live. America has no health care, many gun deaths, etc. Israel
similarly has a history of suicide bombers, rocket attacks, etc. If you think
you might die anyway, why not take a chance on starting a company?

------
simonebrunozzi
This reminds me of an old adage that you could hear in Italy, which goes
something like this:

Italy: constant war, killing, etc, and we produced the Renaissance, Leonardo
and Galileo, Music, art, etc;

Switzerland: 500 years of constant peace, and all they invented is hemmental
an nice watches.

------
tempsy
Anyone find it strange how few tech startups come out of Seattle despite all
the tech workers? It is the land of the big tech co and big tech co satellite
offices, and can think of few actual startups and believe it comes in low as
far as VC dollars go (will find source)

~~~
filereaper
I'd say it has to do with these three points:

\- Ownership of IP: IP produced in your own time on your own equipment doesn't
belong to your employer.

\- Non-competes: Not enforceable in CA

\- Access to capital: Plenty in CA.

I'd say the first two points are what differentiate Silicon Valley from the
rest of the tech capitals.

~~~
tempsy
Ok but fairly certain NYC and Boston attract multiples more VC dollars as well
vs Seattle, and at least can think of far more startups out of those cities
than Seattle. I don’t think it’s just a state specific thing.

------
Spooky23
It's about a balance in stability.

Look at state capitals in the US as compared to commercial cities as an
example. In general, big populations of people with high security (ie. .gov
workers) and contractors to the same equal stable, but boring places.

~~~
hohoho12345
You a word.

------
matthewfelgate
Could somebody explain the conclusions in lay-mans terms please?

------
hertaveinS
[https://www.result.pk/med-result.html](https://www.result.pk/med-result.html)

------
EGreg
Because some societies have the concept of limited liability and bankruptcy
protections.

------
matthewfelgate
Could somebody explain the conclusions in laymans terms?

~~~
QuesnayJr
The author contrasts two different types of explanation for entrepreneurship
-- institutional or cultural. "Institutional" means that the country has
institutions that make entrepreneurship easy. The author argues that these are
not sufficient, and that the key difference is social norms.

~~~
pnako
Oliver Williamson and the "New Institutional Economics" school came up with a
four-layer model explaining that real-time/day-to-day economic activity is
influenced by contracts (time frame: months to years) which in turn are
influenced by institutions, laws, etc. (time frame: years to decades) which in
turn are influenced by things like culture and religion (time frame:
centuries).

------
crb002
They have leisure capital.

------
jasonkester
The submitted url just copy/pastes the abstract from the paper. Here’s where
it lives:

[https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3449762](https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3449762)

~~~
mikekchar
The paper does not seem to have any of the data intact. It just says "Insert
figure 1 here", etc. Perhaps I'm missing something, but it doesn't seem very
useful as it is. The paper makes some claims, but I found it _very_ difficult
to follow the reasoning.

~~~
freddie_mercury
> It just says "Insert figure 1 here"

This is how virtually every pre-print is formatted. Scroll to the bottom and
you will find all of the tables & figures.

Laying out the paper is for the journal to do.

------
goodcanadian
Without reading the article, some ideas that come to mind are:

-differing culture making it more or less likely for someone to go down that road and making it more or less acceptable by others.

-differing legal frameworks that make it easier or more difficult to pursue entrepreneurship and make a living from it.

