I've often heard it informally argued "people will become lazy if you give them handouts". Although I doubt the economic sophistication of most such assertions, I do think they have a real point: you might incentivize reduced productivity and actively harm the arc of skills development if your policies are not well thought out. On the other hand, subsidies are obviously an important device for any centralized institution.

Perverse subsidies is too broad and yet does not seem to talk about this particular tradeoff (at least in the wikipedia article on subsidies).

I'd be very pleased with a specific term, but if there isn't one, some analysis along these lines would be nice.

(If even that doesn't exist, I suspect I might have raised a question that isn't suited to the natural categorizations in economics and some gesturing towards where I might be going wrong would be helpful)


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