Subsidies justification

Economists differ widely in their views on the practical importance of these market failures, on what remedies are appropriate, and whether governments can satisfactorily remedy the problem. One clear principle is that the problem be identified as precisely as possible and the assistance be targeted as closely as possible to the problem. For example, if information is inadequate, providing knowledge about options would be preferable to aiding a specific option. The three justifications for subsidies set a minimum test of aid that many programs fail to pass. 

Evidence-based practice. The link between subsidies and outputs creates an opportunity to specify what the outputs will be. This is important for two reasons. First, it enables the subsidies to be used explicidy to address health problems for which a solid justification exists. Second, it allows policymakers to specify interventions that are known to be evidence based and cost effective. Many health care services have litde im-... 

Why are subsidies needed to address the problem What will the subsidies be used for Is there evidence that such expenditures are cost effective Could the subsidies be used more effectively in addressing other health sector problems Subsidies are justified when the market fails to achieve social goals—a common phenomenon in the health sector. Externalities such as the social costs of high birth rates and communicable disease, socioeconomic inequalities in health, and the risks of catastrophic health care costs are often dted as justifications for subsidies. This is the time to... 

Justification for choice of problem and use of public subsidies Externalities associated with social costs of orphaned children if disease is not detected and/or treated on time, socioeconomic inequalities in... 

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