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

Authors: Massimo Motta and Martin Peitz

Intereconomics, Vol. 55, No 4, 219-222, August, 2020

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.