what is welfare effect of export subsidies on LDC countries?

Answer 1

Export Subsidies are really double edged sword for LDCs. If they offer export subsidies then there scarce funds are given away to some exporters whereas if they do not offer then there export will not be competitive in world market and will miss important foreign revenue.

So it has to be a balanced approach, they have to decide which export can be most competitive in world market which will require least support and will provide a competitive advantage to them.

One more important consideration which is required is about what is getting exported, general tendency is to export raw material which result in less margin and making other countries available these resources and end up importing produced good from them. In these cases countries are required to promote internal industries also.

So to summarize, thoughtful export subsidies will provide positive welfare effect but reckless, unplanned subsidies will ruin it

Answer 2

sure. Giving a subsidy on enjoyed ones production will a million/advance exports and a pair of/decrease down imports. a million/ advance exports:An incentive to offer regionally at a less costly cost, might desire to get a comparative benefit interior the worldwide industry and hence improve in exports. 2/ decrease down imports: If citizens can get enjoyed ones products extra much less costly (as a results of a subsidy from the goverment) than the imported products their call for will flow down.