Public administration and new venture startups: The association between economic development and the role of bureaucracy in startup activity

Using public administration theory, we examine whether professionalized or closed bureaucracy are associated with individual participation in startups and whether these associations are contingent on the level of economic development of a country. We use a novel cross-national 2015 dataset of bureaucratic structures and a sample of 106,818 individuals from 22 countries from the Global Entrepreneurship Monitor survey. Our findings indicate that both closed and professional public administrations lower the odds of being in a startup. Furthermore, we find that the underlying economic conditions within countries can moderate these relationships. Specifically, our results indicate that the negative relationship between both closed and professional public administrations and the odds of being in a startup is amplified in low-income countries.