Abstract

In the last decade or so, the role of export subsidies has attracted renewed interest in the current policy debate and in the literature on strategic trade policy. While the theoretical literature is very stimulating, little is known about and scarce attention is paid to the facts about export subsidization. Simplifying, in most theoretical models governments grant production subsidies to domestic firms of an industry exporting to one specific market. In practice, several official agencies rn?y he invnlved in providing export credits and export insurance subsidies to many domestic sectors exporting to a wide range of export destinations. In spite of the work by Abraham (1990), Abraham et al. (1992), Ford and Suyker (1990), Jepma (1991), and the EC (1990), there is only partial information about the size of the subsidies involved and their sectoral and regional break-up. As a consequence, the subsidy structure resulting from a policy of export promotion remains unclear.