The topic of government bailouts for failing companies frequently appears in IELTS Writing Task 2, particularly during periods of economic uncertainty. Based on past exam analysis, this theme has appeared in various forms since 2018, with notable frequency in 2020-2022 during the global pandemic. Let’s examine one common variation of this question that regularly emerges in actual IELTS tests.
Government bailout concept showing financial rescue operation for failing businesses
Understanding the Task
Some people believe that governments should provide financial assistance to failing private companies to prevent economic problems and job losses. Others think companies should be responsible for their own survival in the marketplace. Discuss both views and give your opinion.
Task Analysis
- Topic: Government financial support for failing companies
- Task type: Discussion + Opinion
- Key points to address:
- Arguments for government bailouts
- Arguments against government intervention
- Personal stance with justification
Sample Essay 1 (Band 8.5)
The question of whether governments should rescue struggling private companies has become increasingly relevant in today’s interconnected economy. While some advocate for state intervention to prevent economic instability, others maintain that companies should face market consequences independently. I believe a balanced approach is necessary, with carefully considered government support in specific circumstances.
Government assistance to failing companies can be justified through several compelling arguments. Firstly, large corporate failures often trigger widespread economic ripple effects, potentially leading to systemic crises that affect entire industries. For example, the collapse of major automotive manufacturers could devastate thousands of smaller supply chain businesses and local economies dependent on them. Additionally, preventing company failures helps preserve employment, thereby maintaining consumer spending power and social stability. The 2008 financial crisis demonstrated how strategic government interventions prevented complete economic meltdown in many countries.
Economic ripple effect showing interconnected impact of business failures
However, opponents of government bailouts present equally valid concerns. The fundamental principle of free-market economics suggests that inefficient businesses should naturally fail, allowing more innovative and competitive companies to emerge. When governments intervene, they risk creating moral hazard, where companies become less prudent knowing they have a safety net. Furthermore, using public funds to rescue private enterprises raises questions about fairness and the appropriate use of taxpayer money, especially when other social needs require funding.
In my view, the optimal approach lies in establishing clear criteria for government intervention. Support should be limited to cases where company failure would cause substantial societal damage or trigger broader economic crises. Such assistance should come with strict conditions, including management changes, restructuring requirements, and repayment obligations. This balanced strategy helps maintain market discipline while protecting against catastrophic economic disruptions.
Sample Essay 2 (Band 6.5)
There is much debate about whether governments should help private companies that are having financial problems. This essay will discuss both sides of this issue and share my thoughts.
Those who support government help have some good reasons. First, when big companies fail, many people lose their jobs. This creates problems for families and communities. Second, if important companies close, it can hurt the whole economy. For example, if a car company closes, many small companies that make car parts will also have problems.
On the other hand, some people think companies should solve their own problems. They say that using government money to help private companies is not fair to taxpayers. Also, if companies know the government will always help them, they might take too many risks. This is not good for the economy.
I think governments should only help companies in special situations. They should help if the company is very important for the economy and many jobs depend on it. But the help should have strict rules. Companies should show they can change and become better before getting help.
Analysis of Band Scores
Band 8.5 Essay Analysis:
- Complex sentence structures with sophisticated linking
- Advanced vocabulary and precise word choice
- Clear progression of ideas with excellent examples
- Well-developed arguments with nuanced analysis
- Coherent paragraphing with smooth transitions
Band 6.5 Essay Analysis:
- Simpler sentence structures
- Basic but clear vocabulary
- Some development of ideas but less sophisticated
- Limited use of examples and evidence
- Basic organization with visible paragraphing
Key Vocabulary to Remember
- bailout (n) /ˈbeɪlaʊt/ – emergency financial assistance
- systemic crisis (n) /sɪˈstemɪk ˈkraɪsɪs/ – widespread problem affecting entire system
- moral hazard (n) /ˈmɒrəl ˈhæzəd/ – lack of incentive to guard against risk
- ripple effect (n) /ˈrɪpl ɪˈfekt/ – spreading consequence
- prudent (adj) /ˈpruːdnt/ – acting with care and thought
- intervention (n) /ˌɪntəˈvenʃn/ – act of becoming involved
- catastrophic (adj) /ˌkætəˈstrɒfɪk/ – involving sudden damage or suffering
- innovative (adj) /ˈɪnəveɪtɪv/ – introducing new ideas or methods
Consider practicing with similar topics like:
- Government support for traditional industries
- Public funding for environmental protection in private sector
- State intervention in times of natural disasters
Share your practice essays in the comments for feedback and discussion!
