Self-Governance and Public Entrepreneurship: Beyond Markets and States

We saw in the last two sessions that there are often self-governance solutions to various collective action problems - but this leaves open the question of how those solutions are developed and how they spread out. To answer that question, we need to understand the concept of ‘public entrepreneurship’. Usually when we think about entrepreneurship, we think about the activities of businesspeople operating in a market. Business entrepreneurs are people who spot an opportunity – an opportunity that may not have been spotted by others – to sell a product or service for more than it costs to produce it. Profit is the reward for successful entrepreneurship.

Profit attracts competitors – and it’s through that process of attraction that successful business ideas are gradually spread through the market concerned. Public entrepreneurship refers to action by people who observe a collective action problem – such as littering, over-logging, over-fishing, or the need to improve the appearance of their neighbourhood – and spot an opportunity to devise a solution to the underlying problem. Public entrepreneurs, in other words, are the people who devise self-governance solutions to collective action dilemmas. When we use the term ‘public entrepreneurship’, it is tempting to equate this activity with public sector agencies and people who work for the government – but this would be mistaken.

While public entrepreneurs can be people who work for government agencies at various levels – it may also involve people working in any other aspect of society– whether people in business organisations, in voluntary associations, or just private citizens who are concerned to address a public problem of some sort. What distinguishes public entrepreneurs is not the sector of society that they are from but that their activities are directed towards addressing, solving various collective action problems. So what is it that public entrepreneurs actually do?

Well a key feature of public entrepreneurship is that it involves the use of knowledge about a resource or problem and about the people who are embedded in the particular situation to change the incentives they face in order to overcome the ‘free-rider’ or collective action problem. Let’s go back to the example of ‘urban gardening’ or ‘guerrilla gardening’ that we looked at in a previous session. In that instance public entrepreneurship was involved in multiple ways. First, public entrepreneurship involved the perception by people in the communities concerned that there was a problem in their neighbourhoods with blighted public space.

Second, it required recognition of the need to provide people with incentives in the communities to get involved in managing the space and thus to overcome the free-rider problem. Third, it required perceiving that gardening might be an activity that could mobilise incentives to encourage people to care for the public space. Fourth, it involved using the relationships developed during the urban gardening activity – the sense of trust of having solved one problem successfully – this is often referred to as social capital – to tend to other problems in the neighbourhood – for example, by contacting local businesses and members of the local authorities to show how the urban gardening movement could be used to address other concerns in the community.

All of these activities can be classed as examples of public entrepreneurship – because they were addressed towards collective action problems of various kinds – and they took place without requiring the permission of a bureaucratic hierarchy. Check out this Ted Talk on the ‘Incredible Edible’ movement – which is a wonderful example of public entrepreneurship in action.