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Organisation for Economic Co-operation and Development (OECD)
     Founder States      Other Member States
Secretariat Paris, France
Membership 20 Founder States
10 Participating States
Leaders
 -  Secretary General Mexico José Ángel Gurría
Establishment
 -  as the OEEC1 16 April 1948 
 -  renamed as the OECD 30 September 1961 
Website
www.oecd.org
1 Organisation for European Economic Co-operation.

The Organisation for Economic Co-operation and Development (OECD, in French: Organisation de coopération et de développement économiques, OCDE) is a Paris-based international economic organisation of 30 countries. Most OECD members are high-income economies with a high Human Development Index (HDI) and are regarded as developed countries.

It originated in 1948 as the Organisation for European Economic Co-operation (OEEC), led by Robert Marjolin of France, to help administer the Marshall Plan for the reconstruction of Europe after World War II. Later, its membership was extended to non-European states. In 1961, it was reformed into the Organisation for Economic Co-operation and Development by the Convention on the Organisation for Economic Co-operation and Development.

The OECD's headquarters are at the Château de la Muette in Paris, France.

Contents

History

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Organisation for European Economic Co-operation

The Organisation for European Economic Co-operation (OEEC), was formed in 1948 to administer American and Canadian aid in the framework of the Marshall Plan for the reconstruction of Europe after World War II.[1] It started its operations on 16 April 1948. Since 1949, it was headquartered in the Chateau de la Muette in Paris, France. After the Marshall Plan's ending, the OEEC focused on economic questions.[2]

In the 1950s the OEEC provided the framework for negotiations aimed at determining conditions for setting up a European Free Trade Area, to bring the European Economic Community of the six and the other OEEC members together on a multilateral basis. In 1958, a European Nuclear Energy Agency was set up under the OEEC.

Foundation of the OECD

Following the 1957 Rome Treaties to launch the European Economic Community, the Convention on the Organisation for Economic Co-operation and Development was drawn up to reform the OEEC. The Convention was signed in December 1960 and the OECD officially superseded the OEEC in September 1961. It consisted of the European founder countries of the OEEC plus the United States and Canada, with Japan joining three years later. During the next 12 years Finland, Australia, and New Zealand also joined the organisation. Yugoslavia had observer status in the organisation starting the establishment of the OECD until its dissolution.[3]

More than just increasing its internal structure, OECD progressively created agencies: the Development Centre (1961), International Energy Agency (IEA, 1974), and Financial Action Task Force on Money Laundering.

Enlargement to Central and Eastern Europe

In 1989, after the political changes in Central and Eastern Europe, the OECD started to assist these countries to prepare market economy reforms. In 1990, the Centre for Co-operation with European Economies in Transition (now succeeded by the Centre for Cooperation with Non-Members) was established, and in 1991, the Programme "Partners in Transition" was launched for the cooperation with Czechoslovakia, Hungary and Poland.[3][4] This programme also included a membership option for these countries .[4] As a result of this, in 1994–2000 Poland, Hungary, Czech Republic and Slovakia as well as Mexico and the Republic of Korea became members of the organisation.

Reform and further enlargement

In 2003, the OECD established a working group headed by Japan's Ambassador to the OECD Seiichiro Noboru to work out a strategy for the enlargement and co-operation with non-members. The working group proposed that the selection of candidate countries to be based on four criteria: "like-mindedness", "significant player", "mutual benefit" and "global considerations". The working group's recommendations were presented at the OECD Ministerial Council Meeting on 13 and 14 May 2004. Based on these recommendations work, the meeting adopted an agreement on operationalisation of the proposed guidelines and on the drafting of a list of countries suitable as potential candidates for membership.[3] As a result of this work, on 16 May 2007, the OECD Ministerial Council decided to open accession discussions with Chile, Estonia, Israel, the Russian Federation and Slovenia and to strengthen co-operation with Brazil, China, India, Indonesia and South Africa through a process of enhanced engagement.[5]

Objectives and activities

One of a number of posters created by the Economic Cooperation Administration to promote the Marshall Plan in Europe

Aim

The OECD defines itself as a forum of countries committed to democracy and the market economy, providing a setting to compare policy experiences, seek answers to common problems, identify good practices, and co-ordinate domestic and international policies.[6] Its mandate covers economic, environmental, and social issues. It acts by peer pressure to improve policy and implement "soft law"—non-binding instruments that can occasionally lead to binding treaties. In this work, the OECD cooperates with businesses, trade unions and other representatives of civil society. Collaboration at the OECD regarding taxation, for example, has fostered the growth of a global web of bilateral tax treaties.

The OECD promotes policies designed:

  • to achieve the highest sustainable economic growth and employment and a rising standard of living in Member countries, while maintaining financial stability, and thus to contribute to the development of the world economy;
  • to contribute to sound economic expansion in Member as well as nonmember countries in the process of economic development; and
  • to contribute to the expansion of world trade on a multilateral, nondiscriminatory basis in accordance with international obligations.

International investments and multinational enterprises

Between 1995 and 1998, the OECD designed the Multilateral Agreement on Investment, which was abandoned because of a widespread criticism from civil society groups and developing countries. In 1976, the OECD adopted the Declaration on International Investment and Multinational Enterprises, which was rewritten and annexed by the OECD Guidelines for Multinational Enterprises in 2000.

Among other areas, the OECD has taken a role in co-ordinating international action on corruption and bribery, creating the OECD Anti-Bribery Convention, which came into effect in February 1999. It has been ratified by thirty-eight countries.[7]

The OECD has also constituted an anti-spam task force, which submitted a detailed report, with several quite useful background papers on spam problems in developing countries, best practices for ISPs, e-mail marketers, etc., appended. It works on the information economy[8] and the future of the Internet economy.[9]

PISA

The OECD publishes the Programme for International Student Assessment (PISA) which is an assessment that allows for a comparison of educational performances between countries.

Taxation

The OECD publishes and updates a model tax convention which serves as a template for bilateral negotiations regarding tax coordination and cooperation. This model is accompanied by a set of commentaries which reflect OECD-level interpretation of the content of the model convention provisions. This model generally allocates the primary right to tax to the country from which capital investment originates (i.e., the home, or resident country) rather than the country in which the investment is made (the host, or source country). As a result, it is most effective as between two countries with reciprocal investment flows (such as among the OECD member countries), but can be very unbalanced when one of the signatory countries is economically weaker than the other (such as between OECD and non-OECD pairings).

Since 1998, the OECD has led a charge against harmful tax practices, principally targeting the activities of tax havens (while principally accepting the policies of its member countries which would tend to encourage tax competition). These efforts have been met with mixed reaction: the primary objection is the sanctity of tax policy as a matter of sovereign entitlement.[10] The OECD maintains a 'blacklist' of countries it considers uncooperative in the drive for transparency of tax affairs and the effective exchange of information, officially called "The List of Uncooperative Tax Havens".[11] In May 2009, all remaining countries were removed from the list.[12]

On 22 October 2008, at an OECD meeting in Paris, 17 countries led by France and Germany decided to draw up a new blacklist of tax havens. The OECD has been asked to investigate around 40 new tax havens in the world where undeclared revenue is hidden and which host many of the non-regulated hedge funds that have come under fire during the 2008 financial crisis. Germany, France and other countries called on the OECD to specifically add Switzerland to a blacklist of countries which encourage tax fraud.[13]

Publishing

The OECD publishes books, reports, statistics, working papers and reference materials.

Books

The OECD releases between 300 and 500 books each year. Most books are published in English and French. The OECD flagship titles include:

  • The OECD Economic Outlook, published twice a year. It contains forecast and analysis of the economic situation of the OECD member countries.
  • The Main Economic Indicators, published monthly. It contains a large selection of timely statistical indicators.
  • The OECD Factbook, published yearly and available online, as an iPhone app and in print. The Factbook contains more than 100 economic, environmental and social indicators, each presented with a clear definition, tables and graphs. It is freely accessible online and delivers all the data in Excel format via Statlinks.
  • OECD in Figures, published yearly. A pocket-sized book full of the latest OECD statistics.
  • OECD Observer, an award-winning magazine with six issues a year. News, analysis, commentaries and data on global economic, social and environmental challenges. Contains book reviews and special section listing the latest OECD books, plus ordering information.
  • The OECD Communications Outlook and OECD Information Technology Outlook, which rotate every year. They contain forecasts and analysis of the communications and information technology industries in OECD member countries and non-member economies.
  • In 2007 the OECD published Human Capital: How what you know shapes your life, the first book in the OECD Insights series. This series uses OECD analysis and data to introduce important social and economic issues to non-specialist readers. Other books in the series cover sustainable development, international trade and international migration.

All OECD books are available on the OECD iLibrary and on the OECD online bookshop.

Statistics

The OECD is known as a premium statistical agency, as it publishes comparable statistics on a wide number of subjects.

OECD statistics are available in several forms:

  • as interactive databases on OECD iLibrary,
  • as static files or dynamic database views on the OECD Statistics portal,
  • and as StatLinks (in most OECD books, there is a URL which links to the underlying data).

Working papers

There are 15 working papers series published by the various directorates of the OECD Secretariat. They are available on SourceOECD, as well as on many specialised portals.

Reference works

The OECD is responsible for the OECD Guidelines for the Testing of Chemicals, a continually updated document which is a de facto standard (i.e., soft law).

It has published the OECD Environmental Outlook to 2030, which shows that tackling the key environmental problems we face today—including climate change, biodiversity loss, water scarcity, and the health impacts of pollution—is both achievable and affordable.

Structure

The OECD's structure revolves around three major bodies:

  • The OECD member countries, each represented by a delegation led by an ambassador. Together, they form the OECD Council. Member countries acts through the meetings.
  • The OECD Secretariat, led by the Secretary-General (currently Angel Gurria). The Secretariat is organised in directorates. There are some 2,500 agents in the OECD Secretariat.
  • The OECD committees, one for each work area of the OECD. Committee members are typically subject-matter experts from member and non-member countries. The committees commission all the work on each theme (publications, task forces, conferences, and so on). The committee members then relay the conclusions to their capitals.

Meetings

Delegates from the member countries attend committees' and other meetings, principally organised by the secretariat. Former Deputy-Secretary General Pierre Vinde estimated in 1997 that the cost borne by the member countries, such as sending their officials to OECD meetings and maintaining permanent delegations, is equivalent to the cost of running the secretariat.[14] This ratio is unique among inter-governmental organisations. In other words, the OECD is more a persistent forum or network of officials and experts than an administration.

Noteworthy meetings include:

  • The yearly Ministerial Council Meeting, with the Ministers of Economy of all member countries and the candidates for enhanced engagement among the countries.
  • The annual OECD Forum, which brings together leaders from business, government, labour, civil society and international organisations. This takes the form of conferences and discussions and is open to public participation.
  • Thematic Ministerial Meetings, held among Ministers of a given domain (ie. all Ministers of Labour, all Ministers of Environment, etc.).
  • The bi-annual World Forum on Statistics, Knowledge and Policies, which does not usually take place in the OECD. This series of meetings has the ambition to measure and foster progress in societies.

Secretariat

Exchanges between OECD governments flow from information and analysis provided by the OECD Secretariat. The secretariat collects data, monitors trends, and analyses and forecasts economic developments. It also researches social changes or evolving patterns in trade, environment, education, agriculture, technology, taxation and other areas.

The secretariat is organised in Directorates:

  • Centre for Entrepreneurship, SMEs and Local Development
  • Centre for Tax Policy and Administration
  • Development Co-operation Directorate
  • Directorate for Education
  • Directorate for Employment, Labour and Social Affairs
  • Directorate for Financial and Enterprise Affairs
  • Directorate for Science, Technology and Industry
  • Economics Department
  • Environment Directorate
  • Public Governance and Territorial Development Directorate
  • Statistics Directorate
  • Trade and Agriculture Directorate
  • General Secretariat
  • Executive Directorate
  • Public Affairs and Communication Directorate

The work of the secretariat is financed from the OECD's annual budget, currently around USD $510 million (EUR 342.9 million). The budget is funded by the member countries based on a formula related to the size of each member's gross national product.[15] The largest contributor is the United States, which contributes about one quarter of the budget, followed by Japan with 16%, Germany with 9% and the U.K. and France with 7%. The OECD governing council sets the budget and scope of work on a two-yearly basis.

As an international organisation the terms of employment of the OECD Secretariat staff are not governed by the laws of the country in which their offices are located. Agreements with the host country safeguard the organisation's impartiality with regard to the host and member countries. Hiring and firing practices, working hours and environment, holiday time, pension plans, health insurance and life insurance, salaries, expatriation benefits and general conditions of employment are managed according to rules and regulations associated with the OECD. In order to maintain working conditions which are similar to similarly structured organisations, the OECD participates as an independent organisation in the system of co-ordinated European organisations, whose other members include NATO, the Western European Union and the European Patent Organisation.

Secretaries General

Committees

Representatives of the 30 OECD member countries and a number of observer countries meet in specialised committees on specific policy areas, such as economics, trade, science, employment, education or financial markets. There are about 200 committees, working groups and expert groups. Committees discuss policies and review progress in the given policy area.

OECD External Link to Committees: [1]

Special bodies

Member countries

There are currently 30 full members of the OECD. Of these, Mexico, Poland and Turkey (marked with *) are described as upper middle-income economies by the World Bank. The remaining 27 members are described as high-income economies.[16]

Founding members (1961):

Admitted later (listed chronologically with year of admission):

The European Commission participates in the work of the OECD alongside the EU Member States.[17]

OECD officially invited Chile as a new member country on 15 December 2009.[18][19] The accession agreement was signed on 11 January 2010 and ratified by Chile's National Congress on March 10, 2010.[20] Chile will become the first country in South America to join the organisation[21] following the deposition of an instrument of accession (ratification letter) with the depositary Government (Government of France).[22]

Relations with non-members

     OECD members     Accession candidate countries     Enhanced engagement countries

Currently, 25 non-members participate as regular observers or full participants in OECD Committees. About 50 non-members are engaged in OECD working parties, schemes or programmes. The OECD conducts a policy dialogue and capacity building activities with non-members (Country Programmes, Regional Approaches and Global Forums) to share their views on best policy practices and to bear on OECD's policy debate. The OECD's Centre for Co-operation with Non-Members develops and oversees the strategic orientations of the relations with non-members.

On 16 May 2007, the OECD Ministerial Council decided to open accession discussions with Chile, Estonia, Israel, the Russian Federation and Slovenia.[5]

The OECD Ministerial Council of 2007 also decided to strengthen OECD's co-operation with Brazil, China, India, South Africa and Indonesia, through a process of enhanced engagement or as full members.[5]

The OECD will also explore the possibilities for enhanced co-operation with selected countries and regions of strategic interest to the OECD, giving priority to South East Asia with a view to identifying countries for possible membership.

Criticism

The OECD has been criticised by several civil society groups and developing countries. The main criticism has been the narrowness of the OECD because of its limited membership.[23] In 1997–1998, the draft Multilateral Agreement on Investment was heavily criticized by several non-governmental organisations and developing countries. Many critics argued that the agreement would threaten protection of human rights, labor and environmental standards, and the least developed countries. A particular concern was that the MAI would result in a 'race to the bottom' among countries willing to lower their labor and environmental standards to attract foreign investment. Also the OECD's actions against the harmful tax practices has raised criticism. The primary objection is the sanctity of tax policy as a matter of sovereign entitlement.[10]

See also

References

  1. ^ Christopher, Warren (1998). In the stream of history: shaping foreign policy for a new era. Stanford University Press. p. 165. ISBN 9780804734684. http://books.google.com/books?id=YipOlJqr6msC&pg=PA165. 
  2. ^ "Organisation for European Economic Co-operation". OECD. http://www.oecd.org/document/48/0,2340,en_2649_201185_1876912_1_1_1_1,00.html. Retrieved 2008-07-26. 
  3. ^ a b c "Slovenia and the OECD". Ministry of Foreign Affairs of Slovenia. http://www.mzz.gov.si/en/economy_and_business/slovenia_and_the_oecd/. Retrieved 2010-01-16. 
  4. ^ a b "The Czech Republic in the OECD". Permanent Delegation of the Czech Republic to the OECD. http://www.mzv.cz/oecd.paris/en/the_czech_republic_in_the_oecd. 
  5. ^ a b c OECD (16 May 2007). "Chair's summary of the OECD Council at Ministerial Level, Paris, 15–16 May 2007 – Innovation: Advancing the OECD Agenda for Growth and Equity". Press release. http://www.oecd.org/document/22/0,2340,en_21571361_38379933_38604566_1_1_1_1,00.html. Retrieved 2008-07-26. 
  6. ^ "About OECD". OECD. http://www.oecd.org/pages/0,3417,en_36734052_36734103_1_1_1_1_1,00.html. Retrieved 2010-01-16. 
  7. ^ "OECD Anti-Bribery Convention". OECD. http://www.oecd.org/department/0,2688,en_2649_34859_1_1_1_1_1,00.html. Retrieved 2010-01-16. 
  8. ^ "Information and Communications Policy". OECD. http://www.oecd.org/department/0,3355,en_2649_34223_1_1_1_1_1,00.html. Retrieved 2010-01-16. 
  9. ^ "Shaping Policies for a Digital World". OECD. http://www.oecd.org/site/0,3407,en_21571361_38415463_1_1_1_1_1,00.html. Retrieved 2010-01-16. 
  10. ^ a b Christians, Allison (August 29, 2008). "Sovereignty, Taxation, and Social Contract". Minnesota Journal of International Law 18. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1259975. 
  11. ^ "Sanctions threat to 'tax havens'". BBC News. 2000-06-26. http://news.bbc.co.uk/1/hi/business/806236.stm. Retrieved 2008-07-26. 
  12. ^ "List of Unco-operative Tax Havens". OECD. http://www.oecd.org/document/57/0,3343,en_2649_33745_30578809_1_1_1_1,00.html. Retrieved 2009-05-29. 
  13. ^ "17 countries call for new 'tax haven blacklist'". EuroNews. 2008-10-22. http://www.euronews.net/en/article/21/10/2008/calls-from-17-countries-for-new-tax-haven-blacklist/. Retrieved 2008-10-22. 
  14. ^ "The Power of Peer-Learning, chapter 3: OECD's Basic Rules of Conduct – A Sociology of its Institutional Culture". IRDC. 2007. http://www.idrc.ca/en/ev-114358-201-1-DO_TOPIC.html. Retrieved 2008-07-31. 
  15. ^ OECD.org
  16. ^ "Country Groups. High-income OECD members". The World Bank. http://web.worldbank.org/WBSITE/EXTERNAL/DATASTATISTICS/0,,contentMDK:20421402~pagePK:64133150~piPK:64133175~theSitePK:239419,00.html#OECD_members. Retrieved 2009-01-23. 
  17. ^ Member Countries
  18. ^ Chile invited to become a member of the OECD
  19. ^ Carolina Pica (2009-12-15). "Chile Officially Invited To Join OECD". The Wall Street Journal (Dow Jones & Company, Inc). http://online.wsj.com/article/BT-CO-20091215-710267.html. Retrieved 2009-12-15. 
  20. ^ Senado ratifica el ingreso de Chile a la Ocde
  21. ^ "Chile signs up as first OECD member in South America". 2010-01-11. http://www.oecd.org/document/26/0,3343,en_2649_34487_44365210_1_1_1_1,00.html. Retrieved 2010-01-12. 
  22. ^ "Bachelet confirma inminente ingreso de Chile a la Ocde como miembro pleno". La Tercera. 2 December 2009. http://www.tercera.com/contenido/655_205961_9.shtml. Retrieved 2009-12-02. 
  23. ^ Jorma Julin (December 2003). "The OECD: Securing the future". The OECD Observer (OECD) (240/241). http://www.oecdobserver.org/news/fullstory.php/aid/1197/The_OECD:_Securing_the_future.html. Retrieved 2010-01-16. 

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Wiktionary

Up to date as of January 15, 2010

Definition from Wiktionary, a free dictionary

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OECD

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