by Bryan Riley, Brett D. Schaefer
The Heritage Foundation
May 21, 2014
The Overseas Private Investment Corporation (OPIC) provides political risk insurance, loan guarantees, and direct loans to U.S. and foreign companies to encourage investment in developing and emerging economies. OPIC artificially lowers the cost of such investments by having the U.S. taxpayer assume a portion of the risk of the venture—a classic case of socializing risk and privatizing profits. This practice may have been justified when OPIC was created in 1969, but it is no longer justifiable when ample private-sector alternatives exist in today’s era of global markets. OPIC has become little more than corporate welfare and should not be reauthorized.