Mild Government Failure

Shang-Jin Wei, Jianhuan Xu, Ge Yin, Xiaobo Zhang

A relatively mild form of government failure - for example, bureaucrats can count but do not differentiate quality - can significantly affect the efficacy of industrial policy. We investigate this idea in the context of China's largest pro-innovation industrial policy using a structural model. We find that the return to the subsidy program is -19.7\% (but would be 7.8\% if the mild government failure can be removed). Furthermore, the welfare loss is exacerbated by patent trade

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Year of publication:	April 2023
Authors:	Wei, Shang-jin ; Xu, Jianhuan ; Yin, Ge ; Zhang, Xiaobo
Institutions:	National Bureau of Economic Research (issuing body)
Publisher:	Cambridge, Mass : National Bureau of Economic Research
Subject:	Industriepolitik \| Industrial policy \| Technologiepolitik \| Technology policy \| Staatsversagen \| Government failure \| Bürokratie \| Bureaucracy \| Wohlfahrtsanalyse \| Welfare analysis \| China

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Extent:	1 Online-Ressource illustrations (black and white)
Series:	NBER working paper series ; no. w31178
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Arbeitspapier ; Working Paper ; Graue Literatur ; Non-commercial literature
Language:	English
Notes:	Hardcopy version available to institutional subscribers
Other identifiers:	10.3386/w31178 [DOI]
Classification:	H21 - Efficiency; Optimal Taxation ; O14 - Industrialization; Manufacturing and Service Industries; Choice of Technology ; O25 - Industrial Policy
Source:	ECONIS - Online Catalogue of the ZBW

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