Problem
Overdependence on government subsidies
Experimental visualization of narrower problems
Other Names:
Discriminatory domestic subsidies Nature:
A wide variety of techniques is used by governments to subsidize production costs. They may be grouped as subsidies to specific industries, as regional development programmes, or as subsidies for particular economic activities (which seek to raise growth rates in broad groups of industries, to bring about significant structural adjustments, and to facilitate the adjustment of enterprises to economic shocks). Such government aids to domestic industries result in some degree of distortion of trade patterns. Some of these forms of aid may represent efforts either to offset tariff and other trade concessions or to improve balance of payments positions.
Incidence:
State subsidies in the EC were about 82 billion ecus a year in 1986-88. Of that, agriculture took an average of 11 billion ecus a year, coal 13 billion, railways 26 billion, and industry the remainder. In 1981-86, subsidies were around 89 billion ecu a year.
Broader Problems:
Overdependence on governmentDiscriminatory business practices Narrower Problems:
Overuse of industrial subsidiesCounter-productive agricultural price supportsUneconomic publishing markets for minority languagesConcealed government subsidiesCounter-productive subsidy of medical schoolsInequitable distribution of public subsidies Related Problems:
Excessive customs and trade formalities Aggravates:
Unsustainable livelihoodsDecline in government health expenditureEconomic dependence upon socially undesirable activitiesDistortion of international trade as a result of government participationCrony capitalismResource consumption exacerbated by price distortionsDistortion of international trade by embargoesExcessive environmental protectionismEconomic underdevelopmentEconomic conflict Strategies:
Undertaking cost-cuttingSecuring government subsidiesReducing discriminatory domestic subsidies Subject(s):
Commerce → FinanceGovernment → Government
Societal Problems → Dependence
Related UN Sustainable Development Goals:
Problem Type:
D: Detailed problems Date of last update
30.04.2022 – 06:05 CEST