State Aid Policies in Response to the COVID-19 Shock: Observations and Guiding Principles

Massimo Motta; Martin Peitz

doi:10.1007/s10272-020-0902-4

State Aid Policies in Response to the COVID-19 Shock: Observations and Guiding Principles

Inter Econ. 2020;55(4):219-222. doi: 10.1007/s10272-020-0902-4. Epub 2020 Jul 28.

Authors

Massimo Motta¹, Martin Peitz²

Affiliations

¹ Barcelona Graduate School of Economics, Ramon Trias Fargas, 25-27, 08005 Barcelona, Spain.
² Department of Economics, University of Mannheim, L 7, 3-5, 68161 Mannheim, Germany.

Abstract

As a general principle, state aid to firms and sector-specific support schemes should be used only when there are market failures; that is, when there are good reasons to believe that the market would not deliver efficient and/or equitable outcomes.