After a short review of recent statistics about economic growth and investment expenses in the three Belgian regions, the paper examines the main arguments to compare two kinds of public incentives to invest : targeted incentives and general incentives. The first category includes capital grant and any fiscal devices that reduce corporate tax base. A decrease in the corporate tax rate, notional interests and special regimes like coordination centres are some examples of the second instrument category. Economic literature shows that targeted incentives are more efficient but that some governance problems arise when the public instruments are granted discretionarily. Conversely general incentives are neutral but they are less efficient and they provide a windfall gain to the capital supplier without stimulating capital expenditure. Codes JEL ? H25, H32, R58.
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Volume (Year): XLVIII (2009) Issue (Month): 1 () Pages: 179-186 Download reference. The following formats are available: HTML
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Find related papers by JEL classification: H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm R58 - Urban, Rural, and Regional Economics - - Regional Government Analysis - - - Regional Development Policy