Tackling Market Failure or Building a Cartel? Creation of an Investment Regulation System in Finnish Forest Industries
Government intervention in the economy is often justified by the need to correct market failures. This study analyzes one case, the investments of Finnish forest industries, in which, in the late 1960s and early 1970s, both policy makers and the trade association representing the sector reasoned that intervention was particularly necessary because otherwise, the only substantial natural resource in the small country would be overexploited. In the long run, however, the growth of forest resources turned out to be higher, and the demand for wood lower, than expected. Furthermore, the most influential industrialists managed to “capture” the regulatory system and make it a component of their ne…
Varieties of State Aid and Technological Development: Government Support to the Pulp and Paper Industry, the 1970s to the 1990s
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 c…