The Relative Efficiency of Automatic and Discretionary Industrial Aid
Swales, J. Kim (2008) The Relative Efficiency of Automatic and Discretionary Industrial Aid. Discussion paper. University of Strathclyde, Glasgow.
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Abstract
For the last two decades, the primary instruments for UK regional policy have been discretionary subsidies. Such aid is targeted at “additional” projects - projects that would not have been implemented without the subsidy - and the subsidy should be the minimum necessary for the project to proceed. Discretionary subsidies are thought to be more efficient than automatic subsidies, where many of the aided projects are non-additional and all projects receive the same subsidy rate. The present paper builds on Swales (1995) and Wren (2007a) to compare three subsidy schemes: an automatic scheme and two types of discretionary scheme, one with accurate appraisal and the other with appraisal error. These schemes are assessed on their expected welfare impacts. The particular focus is the reduction in welfare gain imposed by the interaction of appraisal error and the requirements for accountability. This is substantial and difficult to detect with conventional evaluation techniques.
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Item type: Monograph(Discussion paper) ID code: 67820 Dates: DateEvent2008PublishedNotes: Discussion paper. Subjects: Social Sciences > Communities. Classes. Races > Regional economics. Space in economics Department: Strathclyde Business School > Economics Depositing user: Pure Administrator Date deposited: 14 May 2019 13:02 Last modified: 11 May 2024 00:34 URI: https://strathprints.strath.ac.uk/id/eprint/67820