Page "Subsidy" Paragraph 4

In other cases, a subsidy may be an efficient means of correcting a market failure.

For example, economic analysis may suggest that direct subsidies ( cash benefits ) would be more efficient than indirect subsidies ( such as trade barriers ); this does not necessarily imply that direct subsidies are bad, but they may be more efficient or effective than other mechanisms to achieve the same ( or better ) results.

Insofar as they are inefficient, however, subsidies would generally be considered by economists to be bad, as economics is the study of efficient use of limited resources.

Ultimately, however, the choice to enact a subsidy is a political choice.

Note that subsidies are linked to the concept of economic transfers from one group to another.