Definition of economic support
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| Concept of economic support |
Economic support can be defined as a form of financial aid or subsidies provided to specific groups or sectors, whether they are economic entities, companies, or individuals, with the aim of promoting economic and social policies.
A subsidy can also be defined as aiming to reduce the financial burdens on citizens in the country through the provision of cash or commodity subsidies in order to reduce inflation and reduce the prices of goods and services.
Types of economic support
We find that the types of support, especially the government, are divided into several sections, the most important of which are:
- Direct support: In this type, the government reduces the prices of basic commodities, and a specific percentage of the size of the general budget is allocated to the non-existence of these commodities.
- Production support: In this type, the government supports production through investments in order to support “economic growth” After the financial crisis in 2008, many countries resorted to boosting production rates, such as Spain, France, the United States of America, and Germany.
- Supporting entrepreneurs: In this type, the government aims to support institutions and companies as a kind of “economic stimulus” and to support the growth of “employment” rates.
The importance of the state implementing economic support
Countries apply the concept of economic support, to reduce and repair the gap between groups of people and to legalize the disparity between incomes to support economic growth and the convergence of income levels.
Countries may also resort to subsidies for political purposes. Most electoral programs promise to reduce the prices of basic commodities to increase their popularity.
In the event of political crises or revolutions, some regimes resort to increasing support to spread reassurance and stability of the situation.
Sometimes government subsidies aim at stabilizing the prices of goods to keep them within the reach of the consumer and producer.
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