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Improving Supply Security: Guidelines and Policy Proposals

Author

Listed:
  • Felbermayr Gabriel

    (Austrian Institute of Economic Research (WIFO), Vienna; and Austrian Supply Chain Intelligence Institute (ASCII), Vienna, Austria.)

  • Janeba Eckhard

    (University of Mannheim, Germany.)

Abstract

Supply security is threatened by technical, business, natural and policy shocks, as well as geopolitical tensions. Is there a rationale for policy intervention? If yes, what are efficient and effective measures that achieve de-risking? This article first explains why private incentives do not generally lead to an optimal diversification of supply sources, and then discusses measures that strengthen protection against and resilience in the face of shocks. Governments should refrain from policies that further disincentivise diversification such as the ex post skimming of excess profits when adverse shocks force the halt of production and should work on framework conditions that facilitate diversification. Importantly, most measures are best taken at the EU level.

Suggested Citation

  • Felbermayr Gabriel & Janeba Eckhard, 2024. "Improving Supply Security: Guidelines and Policy Proposals," Intereconomics: Review of European Economic Policy, Sciendo, vol. 59(3), pages 146-153.
    • Handle: RePEc:vrs:intere:v:59:y:2024:i:3:p:146-153:n:1007
    DOI: 10.2478/ie-2024-0031
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • L5 - Industrial Organization - - Regulation and Industrial Policy

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