3.7.3—Interventionist supply-side policies

Interventionist policies use public spending, regulation or direct provision for education, infrastructure, healthcare, R&D and competition.

They can address coordination or equity problems but require funding, implementation capacity and good targeting.

Match the public action to the market failure or capability gap.

Public broadband can raise productivity where private providers will not cover remote areas.

Government action can fail through waste or capture.

Interventionist policies raise the quantity or quality of factors through education and training, better quality, quantity and access to health care, research and development, infrastructure provision and industrial policies supporting chosen sectors. For example, training raises human capital, healthcare can improve labour productivity, and transport infrastructure raises capital and network efficiency. These can shift LRAS right, but only after implementation lags and if spending is well targeted; public provision itself is not proof of a productivity gain.