Much social entrepreneurship has occurred in countries with national governments with low levels of state capacity to address social problems. Yet, little or no social change originating resulting from social entrepreneurship could have become “large-scale” without the enabling institutions,...

We offer a microfoundation of social entrepreneurship through the work of Vincent and Elinor Ostrom on polycentricity (Ostromian polycentricity) and that of Friedrich Hayek on the economics of knowledge (Hayekian knowledge) that reveals both the main strength and main weakness of social...