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This weakens efforts to improve the banks' credit culture and blunts incentives for enterprises to improve their governance.
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Politicians justify these changes, when not reciting bogus arguments about the deficit, with the incentives for enterprise that they create.
A number of related measures were established to enhance the incentives for enterprise managers to increase the efficiency of their firms.
They have speeded up innovation by downloading the "killer applications" that have made the United States the global leader in technology: better incentives for enterprise-sponsored research and development (R&D), public funding mechanisms and intellectual property regimes to foster profitable relations between universities and firms, and a steady supply of workers with tertiary education.
By supporting the competitive process, the Merger Regulation plays an important role in guaranteeing efficiency in production, in retaining the incentive for enterprises to innovate, and in ensuring the optimal allocation of resources.
The state reformed many of its laws and procedures that were unfriendly to business, extended various incentives for new enterprises, and reformed many of the political institutions and corrupt practices that had tarnished the state's image.
Such thinking has led to lots of incentives for small enterprises and also — in countries such as India — the reservation of entire categories of products being "reserved" for production by small firms.
That unwieldy process consumed considerable time and offered little incentive for Soviet enterprises to sell or buy abroad.
Incentives for investment and enterprise?
In the case of railroads, for example, the government restricted itself to the construction of main lines as an incentive for private enterprise to provide the secondary network.
Leaders who create dog-eat-dog or go-it-alone incentives for their people reduce their enterprises' performance.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com