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This paper discusses the inherent tension in the notion of entrepreneurship as developed by Ludwig von Mises and Israel Kirzner. Given that entrepreneurship is an omnipresent aspect of human action, it cannot also be the “cause” of economic development. Rather, for economic development to take place, certain institutions must be present in order for the entrepreneurial aspect of human action to flourish. After further developing this theoretical insight, an in-depth analysis of the institutions necessary for entrepreneurship is considered.