Self-sufficiency (No-Subsidy) Mantra and Government Funding of Elections Needed to Attain Economic Efficiency and Competitiveness

The theorem on attaining the most efficiently competitive economy crucially depends on the existence of a norm to determine commonly agreed rules.

A norm for determining a commonly agreed rule is to make the government transfer (subsidy) to a group (e.g., a company or body of individuals) less than the surplus generated by the group. The surplus is defined as the output minus consumption of the group. This norm attains self-sufficiency of every group through generation of more surplus than any government subsidy received as incentives or seed money to work and produce.

The only other alternative to the self-sufficiency norm is to grant net-subsidies (transfer exceeding surplus) to some groups. But this will not be agreed to by the groups excluded from the net-subsidy schemes. Net-subsidies for all groups are not feasible. Granting net-subsidies to some groups may be feasible, but will not be a commonly agreed.

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