GRANT EQUIVALENT EXPENDITURE ON INDUSTRIAL SUBSIDIES IN THE POSTWAR UNITED-KINGDOM

The paper constructs a consistent series for UK central government exp enditure on industrial subsidies over the post-war period, valuing inc entives in grant equivalent terms from the position of a firm undertak ing investment appraisal. The analysis includes direct subsidy payment s, as well as tax allowances, and provides a disaggregation between th ose subsidies available on a national, regional and sectoral or firm s pecific basis. A time-series analysis of the assembled data shows impo rtant differences between these components, with regional assistance p erforming a long-run distributive role, while other elements perform a stabilisation function, The short-run patterns are broadly constant a cross governments, but the long-run relationships exhibit structural b reaks related to both political and economic events.