Government Subsidies

This paper addresses the problems of defining and measuring government subsidies, examines why and how government subsidies are used as a fiscal policy tool, discusses their general economic effects in terms of real welfare costs and distributional implications, appraises international empirical evidence on government subsidies, and offers options for their reform. Recent international trends in government subsidy expenditure are analyzed for the 16‐year period from 1975 to 1990, using general government subsidy data for 60 countries from the United Nations' System of National Accounts (SNA). The paper reviews major policy options for subsidy reform, focusing on ways to improve the cost‐effectiveness of subsidy programs.     

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Ohne Zusammenfassung     

Does expatriate production prejudice exports?

Increasingly, German firms are adopting the practice of setting up production units abroad. The public is not altogether in favour of this trend. It is argued that in so doing German industry is creating a stick for its own back and may possibly—in the long term— prejudice its own export opportunities. In an attempt to clarify these complex questions INTERECONOMICS has talked with Dr Tacke, a member of the Board of SIEMENS AG., who has for many years been responsible for SIEMENS’ foreign policy.