Subsidies in Gozo

Abstract

The Market is not simply a question of allocation and distribution but must also be addressed as a cultural and political institution. It is within this framework that the discussion about subsidies in Gozo takes place. Subsidies are generally intended to address a certain measure of inequity. Analysing Gozo' s intricate social and economic features it is found that Gozo' s objective inequity lies primarily in its double insularity, in that it is not only physically cast off from the rest of Europe but, being part of an archipelago, it is also geographically cut off from the 'main island'. Thus, at present its economy is entirely dependent on the Maltese one, leading to a different and distinct social development, since the resources on which Gozitans can draw upon are rather limited. This means that Gozo has specific problems, which need to be addressed differently. This study only dealt with subsidies that are peculiar to the Island of Gozo. Thus, I considered only subsidies that originate from residence in Gozo (personal subsidies, mainly found in education and transport) and from economic enterprise on the island (production subsidies, mainly concerning manufacturing and agriculture). However, I also treated subtle, non-pecuniary forms of subsidies such as the provision of employment opportunities by government. This can be considered in a way as income in kind, since a basic requirement is satisfied at no cost to the applicant or recipient. However, subsidies also carry heavy political connotations and it may happen that they be used as a short-term measure in order to reap the greatest political benefit. This issue was also examined in this thesis, and some questions asked (which can be the subject of further research) whether subsidies are the best policy option in the case of Gozo. In fact it emerged quite clearly that subsidies are one of the main policy measures adopted by subsequent administrations and when they were used before elections they clearly translated themselves into a surge in votes for the party using them. However, the present environment where government is trying to curb public expenditure across the board may point to the direction that Gozo's relation with the central government needs to be redefined, paving the way for regional autonomy.