Knight, financial institutions, and entrepreneurship in developing economies

Abstract Financial institutions in developing economies fail to provide entrepreneurs with access finance grow their businesses. This severely hampers economic development these countries. We seek explain why and develop an argument model based on Knight's theory, which we augment two ways. First, by describing problems embedded financial of economies, for use the Schumpeterian view that creative destruction requires new credit fund entrepreneurial disruption de Soto's finding undocumented assets possessed cannot be leveraged as collateral finance. Second, Williamson's hierarchical institutional distinguish vertical interactions. The is illustrated using case Uganda, a country Eastern Africa. Our analysis finds Uganda suffers from intertwined misaligned formal informal institutions, limited extent codified property, sparse findings prompt policymakers consider within institutions.