Business Support Policies : Large Spending, Little Impact

The focus of this paper is on policies that ought to support productivity, output and employment growth. This support can be direct and indirect, targeted to specific sectors or types of firms or wide ranging. The presence of externalities is the m...

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Main Author:	Dutz, Mark
Format:	Working Paper
Language:	English
Published:	World Bank, Washington, DC 2017
Subjects:	BUSINESS ENVIRONMENT EMPLOYMENT PROGRAM FISCAL POLICY BUSINESS SUPPORT TAXATION CREDIT SUBSIDIES INNOVATION POLICY INCENTIVE SCHEME RESEARCH AND DEVELOPMENT FREE TRADE ZONES
Online Access:	http://documents.worldbank.org/curated/en/458011511799140856/Business-support-policies-large-spending-little-impact http://hdl.handle.net/10986/28946

id	okr-10986-28946
recordtype	oai_dc
spelling	okr-10986-289462021-05-25T10:54:41Z Business Support Policies : Large Spending, Little Impact Dutz, Mark BUSINESS ENVIRONMENT EMPLOYMENT PROGRAM FISCAL POLICY BUSINESS SUPPORT TAXATION CREDIT SUBSIDIES INNOVATION POLICY INCENTIVE SCHEME RESEARCH AND DEVELOPMENT FREE TRADE ZONES The focus of this paper is on policies that ought to support productivity, output and employment growth. This support can be direct and indirect, targeted to specific sectors or types of firms or wide ranging. The presence of externalities is the main theoretical justification for deviating from policy neutrality if enhancing economic efficiency is the policy objective. Policies seeking to correct efficiency-related market failures could, for instance, support local within-sector Marshallian externalities or intra-sector spillovers, collective action to overcome sector-specific coordination failures, and the promotion of information spillovers associated with self-discovery and product diversification, based on static or dynamic knowledge, learning or other positive externalities (Harrison and Rodriguez-Clare, 2010). The presence of market failures is only a necessary and not sufficient rationale for government intervention. It is also important to ensure that the benefits to the economy from any intervention outweigh the associated costs including the costs of any government failures in the design and implementation of the intervention - linked among others to imperfect information by government of productivity-related firm needs, government capture and the creation of rents as well as outright corruption (Hevia et al., 2017). 2017-12-05T19:13:24Z 2017-12-05T19:13:24Z 2017-11 Working Paper http://documents.worldbank.org/curated/en/458011511799140856/Business-support-policies-large-spending-little-impact http://hdl.handle.net/10986/28946 English CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Working Paper Latin America & Caribbean Brazil
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	BUSINESS ENVIRONMENT EMPLOYMENT PROGRAM FISCAL POLICY BUSINESS SUPPORT TAXATION CREDIT SUBSIDIES INNOVATION POLICY INCENTIVE SCHEME RESEARCH AND DEVELOPMENT FREE TRADE ZONES
spellingShingle	BUSINESS ENVIRONMENT EMPLOYMENT PROGRAM FISCAL POLICY BUSINESS SUPPORT TAXATION CREDIT SUBSIDIES INNOVATION POLICY INCENTIVE SCHEME RESEARCH AND DEVELOPMENT FREE TRADE ZONES Dutz, Mark Business Support Policies : Large Spending, Little Impact
geographic_facet	Latin America & Caribbean Brazil
description	The focus of this paper is on policies that ought to support productivity, output and employment growth. This support can be direct and indirect, targeted to specific sectors or types of firms or wide ranging. The presence of externalities is the main theoretical justification for deviating from policy neutrality if enhancing economic efficiency is the policy objective. Policies seeking to correct efficiency-related market failures could, for instance, support local within-sector Marshallian externalities or intra-sector spillovers, collective action to overcome sector-specific coordination failures, and the promotion of information spillovers associated with self-discovery and product diversification, based on static or dynamic knowledge, learning or other positive externalities (Harrison and Rodriguez-Clare, 2010). The presence of market failures is only a necessary and not sufficient rationale for government intervention. It is also important to ensure that the benefits to the economy from any intervention outweigh the associated costs including the costs of any government failures in the design and implementation of the intervention - linked among others to imperfect information by government of productivity-related firm needs, government capture and the creation of rents as well as outright corruption (Hevia et al., 2017).
format	Working Paper
author	Dutz, Mark
author_facet	Dutz, Mark
author_sort	Dutz, Mark
title	Business Support Policies : Large Spending, Little Impact
title_short	Business Support Policies : Large Spending, Little Impact
title_full	Business Support Policies : Large Spending, Little Impact
title_fullStr	Business Support Policies : Large Spending, Little Impact
title_full_unstemmed	Business Support Policies : Large Spending, Little Impact
title_sort	business support policies : large spending, little impact
publisher	World Bank, Washington, DC
publishDate	2017
url	http://documents.worldbank.org/curated/en/458011511799140856/Business-support-policies-large-spending-little-impact http://hdl.handle.net/10986/28946
_version_	1764468134491717632

Business Support Policies : Large Spending, Little Impact

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