SUBSIDIES OR INCENTIVES?

For many decades, input subsidy programs launched by Governments, International Organizations and Private Donors in the fields of agriculture, health, education and others have systematically been “supply-side” driven.

Thereby, often based on external funding, the governments put subsidized products on the market for the “people” (end-users) without involving the private sector in the distribution of these subsidized products. This system has very often generated situations of clientelism and poor governance making these programs ineffective, inefficient and even counterproductive.

From the perspective of the Donors, International Organizations and the States themselves, there has been no “return” on development aid” in the sense of sustainable economic growth or welfare for no steakholder involved. On the contrary, supply-driven subsidies programs may in certain cases even have led to a reduction of economic activity or efficiency of economic operators.

Today, Donors, International Organizations and the States themselves increasingly want to transform subsidy programs into “demand-oriented incentive programs” with direct setting of intelligent incentives at the level of the target beneficiaries.

These demand-oriented incentives must be traceable and transparent, for example, with the help of instruments such as e-vouchers and e-platforms.

Furthermore, they are directly profitable for the beneficiaries in economic terms through the involvement of the private sector in the distribution of the products.

By transforming former supply-driven subsidies programs in “demand-driven incentive programs”and by implementation of new incentives programs in the same manner, Governments dispose of a genuine instrument to ensure that the objectives are met, that the beneficiaries of donor-financed products really profit from the programs and that the private sector ensures commercial viability of these incentive programs.

Design and implementation of these programs will predestine the possible level of the positive economic impact.

Rodeva disposes of vast, effective and proven experience in design and implementation of such incentive programs (see hereto Recent collaborations) in order to support sustainable economic “Return on Development Aid” for the beneficiaries and justifying the investment in development aid for the Donors.

Therefore, RODEVA offers to be your privileged partner to support any envisaged reversal of existing subsidies programs as well as to design and implement new incentive programs in different fields of economic activity such as, but not limited to, Agriculture, Healthcare and Education.

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