Social Entrepreneurship, Microfinance, and Economic Development in Africa

Abstract

This paper analyzes the potential impact of social entrepreneurship, and especially microfinance, on development in Africa. Social entrepreneurship could play an important role in development. However, social entrepreneurship has limited potential for structural transformation and poverty alleviation, which calls into question the recent prioritization of social entrepreneurship. Furthermore, social entrepreneurship can undermine support for state-led development and democratic reforms that are the preconditions necessary for structural transformation and long-term, large-scale development. Thus, social entrepreneurship is best seen as a useful microeconomic strategy that can contribute to development in small ways, but that cannot possibly replace a democratic developmental state.