The Dutch government supports entrepreneurs in different ways, from offering money to making it easier. If your business idea meets the requirements of one of the subsidy programs, it is possible to apply for a grant from the Netherlands Enterprise Agency (RVO).
Subsidies provide government support for certain activities or industries that would not be profitable without it. They are usually given to help struggling sectors or encourage new innovations, or to promote a particular policy or social good. They can be successful economically however, at the cost of other groups (for instance, a food subsidy helps farmers, while increasing prices for consumers) Or, they may fail economically, but they achieve the objectives of cultural or political.
Government-provided subsidies can take many forms, such as grants and tax breaks, rebates as well as direct cash payments to suppliers or customers, and price controls. They may also be indirect, for instance, road taxes that are paid by all motorists, rather than just those who travel on roads, or railway track access fees which are not exclusively imposed for passenger trains.
The advocates of subsidies claim that they can boost the effectiveness of an economy by safeguarding it from competition from abroad, or by promoting local production. They also can help combat market failures such as externalities and information inequalities. Critics argue that these policies can have negative consequences ranging from corruption to inequality and that they hinder more efficient and equitable spending by the government. They also can create perverse incentives. A company that is receiving a government subsidy may be tempted to make a donation to politicians. This could result in „regulatory capture“ and rent-seeking.
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