Public Policies for Private Finance

Ralph De Haas and Juanita González-Uribe ()
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Juanita González-Uribe: Centre for Economic Policy Research, Paris, France

Annual Review of Financial Economics, 2025, vol. 17, issue 1, 243-266

Abstract: We review the literature on the effectiveness of public policies to facilitate firms’ access to finance. The rationale for such policies is to address market failures that cause financial constraints. Using a simple taxonomy, we discuss the current evidence on common interventions to tackle these constraints: public lending through state and development banks, public lending through private banks, subsidized credit, credit guarantee schemes, export credit agencies, publicly backed venture capital, and tax incentives for equity investors. Based on the quantity and quality of the available evidence, we summarize the policies that have proven most effective in helping firms access external financing. In addition, we highlight areas where future research is needed to address current knowledge gaps and to provide more definitive policy guidance.

Keywords: financial constraints; small business finance; public policy; entrepreneurship (search for similar items in EconPapers)
JEL-codes: D04 G20 G28 H25 H81 L26 (search for similar items in EconPapers)
Date: 2025
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Working Paper: Public policies for private finance (2025)
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DOI: 10.1146/annurev-financial-082123-105552

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