Born in Val di Cembra, he studied in Innsbruck and he was active in AUCT (Catholic University Association in Trentino), where he met Emanuele Lanzerotti who encouraged his passion for cooperative topics, for theories at the basis of the movement and its organisation. He understood cooperation as a redeeming element of the damages of society, a way of escape from poverty and of diffusion of morality and catholic solidarity. Paolazzi was the first SAIT director (the idea of a main office for cooperatives was created right after one of his study trips with Lanzerotti in Germany and in Switzerland) until 1920.

He took on various institutional mandates at cooperative and political level (councilor in Federation of cooperative consortia, councilman in Trento, deputy in Vienna after the elections in 1907): he had a pragmatic approach, aimed at protecting the production and economical interests of the territories.

He was also a skilled orator; he held in fact numerous conferences with the purpose of disseminating the cooperative ideals and organisation. His political career ended soon, losing his leading role within the popular party that saw Alcide Degasperi stand out. During the World War he supervised the cooperative provisions, managing a considerable part of the provincial food supplies. Accused of irredentism, he spent some months in prison in Austria; however, at the end of the war, he was isolated and accused of rejoicing for Cesare Battisti’s arrest: this forced him to resign SAIT as director. He moved to Veneto and , back in Trento, he became a priest in 1952.