subsidio

Subsidio (subsidy) is a form of financial aid provided by governments or organizations to reduce the cost of goods or services, to support producers, or to influence prices and consumption. Subsidies can take direct forms, such as cash grants or payments to producers, and indirect forms, such as tax credits, exemptions, or price supports. Price subsidies keep the consumer price of a good below market value, while production subsidies lower the cost of producing a good or service.

Rationale and scope: Subsidies aim to promote economic development, protect jobs, ensure access to essential goods, address social inequalities, or spur research and innovation. They may be targeted (for specific sectors or groups) or universal. Implementation often involves budget allocations and administrative rules.

Design and evaluation: Subsidies require fiscal resources and governance to minimize waste and leakage. Evaluation uses cost-benefit analysis, impact assessments, and performance indicators. Critics highlight risks of market distortion, reduced competition, and fiscal burden; supporters emphasize potential to correct market failures and achieve social or strategic goals. Best practices include clear objectives, transparent criteria, sunset clauses, performance-based funding, and independent oversight.

Examples by sector: agricultural subsidies are common in many countries; energy subsidies for fossil fuels or renewable energy; housing, education, or healthcare subsidies; subsidies delivered through grants, tax relief, or public procurement. International trade analysis notes that subsidies can affect competition and are subject to rules in agreements such as the WTO, which restricts certain export subsidies.