Spotlight on Public Support to Industry

Every year, up to US$45 billion are transferred from public budgets to manufacturing industry through support programmes in OECD countries. It is essential to perceive the significance of such support if we are to understand the role it plays in structural adjustment strategies and the side-effects it can have on trade, competitiveness and investment. In a globalising economy characterised by greater international competitiveness, the need for transparency is becoming increasingly apparent.This study provides the first comprehensive review of public support to industry. It makes use of a unique set of data covering 25 countries to monitor, analyse and evaluate support policies at both the international and the national level. A more in-depth analysis of support programmes is provided through 17 case studies focusing on individual countries. Special attention is also given to support for industrial R&D and for physical and intangible investment. This study shows that, in nearly all OECD countries, efforts must be made to limit the trade distortions that subsidies can produce and to contain public spending on industry support programmes, given the need for fiscal consolidation. This unique study is an invaluable analytical tool that will help us to meet these challenges.