It often takes the form of a premium paid for the increased production or export of certain goods. Whereas a subsidy is a lump sum given for the purpose of promoting an enterprise considered beneficial to the public welfare, a bounty is given as a gratuity per unit of production.
Bounties are usually in the form of direct cash payments.
However, bounties can be in a concealed form such as exports relieved from payment of a tax or excise duty, special railway rates, rebates on taxes and import duties, credit facilities, and export credits guaranteed by the government. Effects of an export bounty can be destroyed by a countervailing duty imposed by an importing country. The compensatory export bounty is aimed at compensating producers for duties paid on imported raw materials used in making the particular commodity. Bounties also have been granted by states for the construction of roads, canals, railroads, and other public works, and they have been used by nations as an inducement to army enlistment. State governments in the United States have given bounties for the killing of animals regarded as destructive to livestock.