Allocating more government spending towards social and public goods relative to private subsidies is positively associated with entrepreneurship.

Much has been said about the relationship between overall government spending and entrepreneurship (generally chiding the stifling bureaucracy of 'big government'), but we can go a level deeper, asking not about the general size of government, but the way it allocates its budget. That different types of government spending have different effects on entrepreneurship dissolves the old stereotype, opening a new question: what times of government spending are most conducive to entrepreneurship?

empirical