We assess state banks, development banks, public lending through private banks, subsidized credit, credit guarantees, export credit agencies, publicly backed VC, and tax incentives for equity investors. The evidence? Mixed but increasingly rigorous (2/n)

Well-designed policies *can* alleviate financial constraints and promote firm growth, especially for SMEs. But effectiveness is highly context-dependent. One-size-fits-all approaches don't work (3/n)

Beware the downsides. Fiscal costs, distorted incentives, and crowding out private finance are real risks, as credit guarantees during COVID-19 have shown, for example (4/n)

Strongest evidence: Credit guarantee schemes have been extensively studied with quasi-experimental methods. Generally positive effects on SME credit access, though impact on defaults varies. Microcredit: lots of RCTs, showing limited impact on profits/income (5/n)

🏦 State banks: Can support growth & employment, especially during crises. But susceptible to political interference. 🌍 Export credit agencies: Promising evidence. EXIM Bank shutdown in US showed these can matter for exports, especially for financially constrained firms (6/n)

Publicly backed VC & tax incentives: Most controversial. Government-sponsored GPs often underperform private ones, though recent China evidence suggests they may foster innovation despite lower financial returns (7/n)

🔬 Bottom line: We need more rigorous evaluation (especially RCTs and quasi-experimental designs), better measurement of spillovers and long-term effects, and greater use of structural models for counterfactual analysis (8/n)

Priority gaps: Public lending through private banks as well as subsidized credit remain understudied. And we still don't know enough about how different policies interact with each other. Full paper: https://t.co/nrOYyVQVJS (9/9)