Suchergebnisse

An 'incentive subsidy' policy for subsidizing private R & D is proposed that can be more efficient, from a social point of view, than subsidy policies in common use such as a 'normal' subsidy policy (fixed amount granted at project start), and conditional loans (loan is repaid only if project is profitable). The incentive subsidy compensates firms for any private loss and taxes away any gain in addition the firm receives a small fraction of the resulting invention' s social value. This mechanism comes close to being perfectly incentive compatible. The firm chooses itself whether it wants to be covered under the incentive subsidy. Generally, the firm's choice coincides with three social aims: First, a project that the firm would conduct in any case should not be subsidized. Second, a project should not be subsidized if its social value is negative. Third, the subsidy should provide an incentive to maximize a project's social value. Using a simulation over a range of hypothetical research projects it is shown that the efficiency of conditional loans and normal grants declines drastically as the government's information about project parameters becomes poorer, while the incentive subsidy performs consistently well.

Government subsidized industrial R & D stands for a large and increasing segment of the total R & D conducted. Yet very little is known about the effectiveness of such subsidies. This paper summarizes the empirical literature concerning direct project subsidies, tax credits, and support for industrial research institutes. This helps to identify what makes government policy effective from the government's perspective and how it affects firms.

A number of cross-country comparisons do not find a robust negative relationship between government size and economic growth. In part this may reflect the prediction in economic theory that a negative relationship should exist primarily for rich countries with large public sectors. In this paper an econometric panel study is conducted on a sample of rich countries covering the 1970-95 period. Extended extreme bounds analyses are reported based on a regression model that tackles a number of econometric issues. Our general finding is that the more econometric problems are addressed, the more robust the relationship between government size and economic growth appears. Our most complete specifications are robust even according to the stringent extreme bounds criterion.

A number of cross-country comparisons do not find a robust negative relationship between government size and economic growth. In part this may reflect the prediction in economic theory that a negative relationship should exist primarily for rich countries with large public sectors. In this paper an econometric panel study is conducted on a sample of rich countries covering the 1970-95 period. Extended extreme bounds analyses are reported based on a regression model that tackles a number of econometric issues. Our general finding is that the more econometric problems are addressed, the more robust the relationship between government size and economic growth appears. Our most complete specifications are robust even according to the stringent extreme bounds criterion.