government protection against import competition may deter managers from adopting the innovations needed to compete globally and to provide their own consumers with highquality products a low price.
Who should Bear the cost?
Second, even if policymakers can determine those infant industries likely to succeed, it does not necessarily follow that those companies therein should receive government assistance. Some segment of the economy must incur the higher cost when local production is still inefficient, such as consumers paying higher prices for the protected products or taxpayers paying for subsidies. Further, when taxes go to pay subsidies, governments can spend less elsewhere, such as on education and infrastructure, to improve overall competitiveness. There are many examples of entreprenurs who endured early losses to achieve future benefits, without public help from consumers or taxpayers.