Davies, Ronald B. - In: Journal of Public Economics 101 (2013) C, pp. 68-76
to benefit its own citizens rather than foreign citizens. I show that the use of red tape – a wasteful application … process – can achieve de-facto discrimination. Key to this result is firm heterogeneity since, although the red tape cost is … applying. If the benefits of targeting subsidies outweigh the burden of red tape, red tape will be used. …