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:
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
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