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Why Is Small Business The Chief Business Of Congress?, Mirit Eyal-Cohen
Why Is Small Business The Chief Business Of Congress?, Mirit Eyal-Cohen
Mirit Eyal-Cohen
Small business is a sacred cow in America. In 1958, Congress created the Small Business Investment Company ("SBIC"), a unique public-private program that provides long-term capital to small entrepreneurs. From its inception, however, the SBIC has been plagued by inefficiency and failure. Yet, Congress continues to pour millions of dollars into the SBIC program, with no end in sight. What explains this failed policy course?
This article argues that the SBIC program exemplifies the pitfalls of legal and political institutional path dependency and should be replaced by private institutional lending system. Pursuant to this account, past decisions can influence future …