Evaluating the Case for Export Subsidies
(Highlights of the paper covered in the Economics Focus column of the Economist, December 14, 2000. Forthcoming in David Greenaway, Reanto Flôres and Germán Calfat, ed., Essays in Honor of Mathew Tharakan; also available as Policy Research Working Paper 2276, World Bank, January 2000) With import-substitution policies having failed and discredited, there has been a shift in favor of interventions on behalf of export interests. In this paper, I argue that, upon close scrutiny, the arguments for such interventions suffer from many of the same flaws as the old arguments for import substitution.