ABSTRACT
Development subsidies nowadays are defined in general terms and mean a form of financial assistance or in-kind support a government pays to an individual, a business, or an institution in order to achieve socioeconomic development, including government purchases of goods and services, special exemptions, as well as implicit payments through government regulatory actions. This study categorizes these subsidies into nine types: cash subsidies, market price support, loans, tax subsidies, in-kind subsidies, cross subsidies, equity subsidies, procurement subsidies, and regulatory subsidies. These development subsidies are usually justified to resolve market failures and achieve socioeconomic objectives. However, development subsidies in practice might not attain their intended objectives and not reach target groups, and are often ineffective and costly. Therefore, governments should carefully plan and implement these subsidies to successfully achieve their objectives.
