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subsidize

SUB-sih-dize /ˈsʌbsɪdaɪz/

verbB2IELTSTOEFLGRESAT

generalformal

To support an organization or activity financially, especially by government payment.

Involves public or third-party money lowering the private cost of a good or service to promote its production or consumption.

The story behind the word. From Latin 'subsidium' meaning reserve troops that sat in reserve behind front lines to assist. In 16th-century English, 'subsidy' came to mean financial aid granted by parliament to the sovereign in times of emergency.

Word relationships

underwrite: Underwrite means guaranteeing against financial loss or financing project launch, while subsidize means ongoing financial assistance to lower user cost.

tax: Taxing increases private costs to reduce activity; subsidizing reduces private costs to boost activity.

Commonly confused with

finance: Finance means providing loans or capital to be repaid; subsidize is a grant or aid reducing cost without repayment.

Word family

subsidy (noun): A sum of money granted by the government to assist an industry or business.
subsidization (noun): The act or policy of providing subsidies.

Collocations

heavily subsidize
subsidize education
state-subsidized

Example sentences

"The government decided to subsidize solar panel installation to speed up transition away from fossil fuels." Clean energy policy
"Many European cities heavily subsidize public transportation to lower traffic congestion." Public transit funding

Memory hook

SUB (under) + SIDE (sit beside and aid with money). Government cash assistance.

When not to use

Do not use when describing standard commercial purchases where full private value is exchanged.

Fun facts

Agricultural subsidies in developed nations exceed $500 billion annually, making them one of the most debated topics in international trade negotiations.