Two Tales of Entrepreneurship: Barbados, Jamaica, and the 1973 Oil Price Shock

From 1961 to 2011, Barbados's GDP per capita grew roughly two times faster than Jamaica's. As a result, the income gap between Barbados and Jamaica is now more than three times larger than at the time of independence. Qualitative historical analysis, e xploiting the interplay between public policy and entrepreneurship before and after the 1973 oil price shock, demonstrates that pro- e ntrepreneurial policies in Barbados versus anti-business policies in Jamaica explain a large portion of the economic divergence of these two islands.