Varieties of State Aid and Technological Development : Government Support to the Pulp and Paper Industry, the 1970s to the 1990s

Abstract

Countries promote the development of pulp and paper industry through industrial, technology and innovation policy measures. Direct interventions and regional and environmental policies, together with more general governmental measures on trade negotiations, taxation, labour policies, and infrastructure development (e.g. roads, energy) have also had an impact on shaping the geographical location of and investments in the pulp and paper industry. This chapter presents an historical overview of government support on pulp and paper industry in the Organisation for Economic Co-operation and Development (OECD) countries from roughly the 1970s to the 1990s. As the earlier literature suggests, in countries where this industry was a dominant line of business, attention was paid to create a favourable regulatory environment, as the companies had bargaining power in influencing governmental policies. The Nordic countries (Finland, Sweden and Norway) are the primary examples of this kind of pattern. On the contrary, in countries in which the pulp and paper industry did not play a significant role, state aid played a less important role. State aid also influenced on the technological development of the industry.