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The Subsidy as a Purely Normative Concept

Published online by Cambridge University Press:  28 November 2008

Martin Ricketts
Martin Ricketts
Affiliation:
Economics, University of Buckingham
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Abstract

Although the term ‘subsidy’ is commonly used in the context of social, industrial, and trade policy, there is no general agreement concerning its precise definition. This paper argues that current usage of the term ‘subsidy’ does not permit us to isolate a distinct policy instrument. Instead, subsidies exist when the tax system fails to accord with specified ‘norms’. Thus, the subsidy turns out to be a normative concept and is defined relative to desired ends. Explicit acceptance of the normative character of subsidies might clarify policy disputes by distinguishing between disagreements over ends, and disagreements about technical relationships.

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Type
Articles
Information
Journal of Public Policy , Volume 5 , Issue 3 , August 1985 , pp. 401 - 411
Copyright
Copyright © Cambridge University Press 1985

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References

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