Despite the regional and international discipline which has been established, industrial subsidies continue to play an important role in the policy mix of OECD governments. In an era of budgetary constraints and globalisation, their reduction and phasing-out remains a policy challenge in almost all OECD countries.

This special issue of the STI Review presents, from the perspective of national governments, the Commission of the European Communities, the WTO and the OECD, the policy approaches adopted to limit the trade-distorting potential of subsidies and to tackle public spending on industrial support programmes in the light of budget consolidation.