EVALUATION OF INDUSTRIAL-POLICY - THE CASE OF THE SWEDISH TEXTILE ANDCLOTHING INDUSTRY

This paper evaluates the Swedish industrial policy for the textile and clothing industry and attempts to provide an interview-based method f or assessing the effects of state intervention. The Swedish industrial policy, in the period 1970-1990, was general and defensive in charact er. In the majority of firms interviewed, government policy had either no effect at all on firm behaviour or where effects were found there were no underlying market imperfections. Only in a minority of firms w as it found that the policy alleviated market imperfections and change d firms' investment behaviour in a way which was judged to be benefici al for the firms' competitiveness. Therefore, the Swedish industrial p olicy for the textile and clothing industry was associated with very s ubstantial inefficiencies in the use of sizeable resources.