Economic Diversification Policies in Alberta

Abstract

An important objective in any country is stable economic growth. To reach this goal, governments use various industrial and diversification policies aimed at reducing the impact on the economy of various internal or external shocks. Diversification policies, as a subset of industrial policies, continue to be endorsed by the government of Alberta in spite of numerous cases in which the government involvement in business ventures through loan guarantees, subsidies, or other incentives proved to be ineffective. Industrial policies need to create an attractive environment for investments and businesses in general and not support only certain economic sectors. However, in case some measures are taken by a government to encourage certain activities, as Rodrik (2004) recommends, they should be automatically eliminated after a pre-determined period of time and activities supported must generate information and/or technological spillovers.