Organisation for Economic Co-operation and Development
Founding member countries (1961)
Other member countries
|Formation||1948 as the OEECa
Reformed in 1961 as the OECD
|José Ángel Gurría|
|a. Organisation for European Economic Co-operation.|
The Organisation for Economic Co-operation and Development (OECD) (French: Organisation de coopération et de développement économiques, OCDE) is an intergovernmental economic organisation of 35 countries, founded in 1961 to stimulate economic progress and world trade. It is a forum of countries describing themselves as committed to democracy and the market economy, providing a platform to compare policy experiences, seeking answers to common problems, identify good practices and coordinate domestic and international policies of its members.
In 1948, the OECD originated as the Organisation for European Economic Co-operation (OEEC), led by Robert Marjolin of France, to help administer the Marshall Plan (which was rejected by the Soviet Union and its satellite states). This would be achieved by allocating American financial aid and implementing economic programs for the reconstruction of Europe after World War II. (Similar reconstruction aid was sent to the war-torn Republic of China and post-war Korea, but not under the name "Marshall Plan".)
In 1961, the OEEC was reformed into the Organisation for Economic Co-operation and Development by the Convention on the Organisation for Economic Co-operation and Development and membership was extended to non-European states. Most OECD members are high-income economies with a very high Human Development Index (HDI) and are regarded as developed countries.
The OECD's headquarters are at the Château de la Muette in Paris, France. The OECD is funded by contributions from member states at varying rates. and had a total budget of EUR 363 million in 2015.
- 1 History
- 2 Objectives and activities
- 3 Structure
- 4 Member countries
- 5 Relations with non-members
- 6 Criticism
- 7 Indicators
- 8 See also
- 9 Notes
- 10 References
- 11 External links
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. It started its operations on 16 April 1948, and originated from the work done by the Committee of European Economic Co-operation in 1947 in preparation for the Marshall Plan. Since 1949, it was headquartered in the Château de la Muette in Paris, France. After the Marshall Plan ended, the OEEC focused on economic issues.
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.
By the end of the 1950s, with the job of rebuilding Europe effectively done, some leading countries felt that the OEEC had outlived its purpose, but could be adapted to fulfill a more global mission. It would be a hard-fought task, and after several sometimes fractious meetings at the Hotel Majestic in Paris starting in January 1960, a resolution was reached to create a body that would deal not only with European and Atlantic economic issues, but devise policies to assist less developed countries. This reconstituted organisation would bring the US and Canada, who were already OEEC observers, on board as full members. It would also set to work straight away on bringing in Japan.
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. The official founding members are:
During the next 12 years Japan, Finland, Australia, and New Zealand also joined the organisation. Yugoslavia had observer status in the organisation starting with the establishment of the OECD until its dissolution as a country.
Enlargement to Central Europe
In 1989, after the Revolutions of 1989, the OECD started to assist countries in Central Europe (especially the Visegrád Group) 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 benefit of Czechoslovakia, Hungary, and Poland. This programme also included a membership option for these countries. As a result of this, Poland, Hungary, the Czech Republic, and Slovakia, as well as Mexico and South Korea became members of the OECD between 1994 and 2000.
Reform and further enlargement
In the 1990s, a number of European countries, now members of the European Union, expressed their willingness to join the organisation. In 1995, Cyprus applied for membership, but, according to the Cypriot government, it was vetoed by Turkey. In 1996, Estonia, Latvia, and Lithuania signed a Joint Declaration expressing willingness to become full members of the OECD. Slovenia also applied for membership that same year. In 2005, Malta applied to join the organisation. The EU is lobbying for admission of all EU member states. Romania reaffirmed in 2012 its intention to become a member of the organisation through the letter addressed by the Romanian Prime Minister Victor Ponta to OECD Secretary-General José Ángel Gurría. In September 2012, the government of Bulgaria confirmed it will apply for full membership before the OECD Secretariat.
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. As a result of this work, on 16 May 2007, the OECD Ministerial Council decided to open accession discussions with Chile, Estonia, Israel, Russia and Slovenia and to strengthen co-operation with Brazil, China, India, Indonesia and South Africa through a process of enhanced engagement. Chile, Slovenia, Israel and Estonia all became members in 2010.
Latvia signed an accession agreement with the OECD on 2 June 2016 and ratified the agreement on 16 June 2016. Latvia will become a full member after deposition of the ratification instrument with the French government, depository of the OECD Convention.
Objectives and activities
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. 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, with trade unions and with 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.
The OECD has also constituted an anti-spam task force, which submitted a detailed report, with several background papers on spam problems in developing countries, best practices for ISPs, e-mail marketers, etc., appended. It works on the information economy and the future of the Internet economy.
The OECD publishes the Programme for International Student Assessment (PISA), which is an assessment that allows educational performances to be examined on a common measure across countries.
The OECD publishes and updates a model tax convention that serves as a template for bilateral negotiations regarding tax coordination and cooperation. This model is accompanied by a set of commentaries that reflect OECD-level interpretation of the content of the model convention provisions. In general, this model 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. 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". In May 2009, all remaining countries were removed from the list.
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 that 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 that encourage tax fraud.
On October 29, 2014, in Berlin, during the Global Forum on Transparency and Exchange of Information for Tax Purposes, all OECD and G20 countries, as well as most major international financial centres, signed a “multilateral competent authority agreement” that will activate the automatic sharing of financial data for tax purposes. Under the Foreign Account Tax Compliance Act (FATCA), the United States will automatically exchange information with other countries beginning in 2015. In 2017, 58 jurisdictions of the "early adopters"—the UK, Spain, France, Portugal, Cyprus, Malta, Germany, Italy, Isle of Man, Jersey, Guernsey, Gibraltar, Bermuda, Cayman Islands, British Virgin Islands, Ireland, Iceland, Liechtenstein, Luxembourg, San Marino, Seychelles, Argentina, and South Africa—start to share information automatically. In 2018, another 35 jurisdictions, including Australia, Austria, Bahamas, Brazil, Brunei, Canada, China, Hong Kong, Monaco, Qatar, Russia, Singapore, United Arab Emirates, and Switzerland begin sharing information.
The OECD publishes books, reports, statistics, working papers and reference materials. All titles and databases published since 1998 can be accessed via OECD iLibrary.
The OECD Library & Archives collection dates from 1947, including records from the Committee for European Economic Co-operation (CEEC) and the Organisation for European Economic Co-operation (OEEC), predecessors of today's OECD. External researchers can consult OECD publications and archival material on the OECD premises by appointment.
The OECD releases between 300 and 500 books each year. The publications are updated accordingly to the OECD iLibrary. Most books are published in English and French. The OECD flagship[vague] 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. The Factbook mainly focuses on the statistics of its member countries and sometimes other major additional countries. It is freely accessible online and delivers all the data in Excel format via StatLinks.
- The OECD Communications Outlook and the OECD Internet Economy Outlook (formerly the 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, the online bookshop or OECD Library & Archives.[n 1]
OECD Observer, an award-winning magazine[n 2] launched in 1962. The magazine appeared six times a year until 2010, and became quarterly in 2011 with the introduction of the OECD Yearbook,[n 3] launched for the 50th anniversary of the organisation. The online and mobile editions are updated regularly. News, analysis, reviews, commentaries and data on global economic, social and environmental challenges. Contains listing of the latest OECD books, plus ordering information. A OECD Observer Crossword was introduced in Q2 2013.
The OECD is known as a statistical agency, as it publishes comparable statistics on a wide number of subjects.
OECD statistics are available in several forms:
- as interactive databases on iLibrary together with key comparative and country tables,
- as static files or dynamic database views on the OECD Statistics portal,
- as StatLinks (in most OECD books, there is a URL that links to the underlying data).
There are 15 working papers series published by the various directorates of the OECD Secretariat. They are available on iLibrary, as well as on many specialised portals.
The OECD is responsible for the OECD Guidelines for the Testing of Chemicals, a continuously updated document that 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.
The OECD's structure consists of three main elements:
- The OECD member countries, each represented by a delegation led by an ambassador. Together, they form the OECD Council. Member countries act collectively through Council (and its Standing Committees) to provide direction and guidance to the work of Organisation.
- The OECD Substantive Committees, one for each work area of the OECD, plus their variety of subsidiary bodies. Committee members are typically subject-matter experts from member and non-member governments. The Committees oversee all the work on each theme (publications, task forces, conferences, and so on). Committee members then relay the conclusions to their capitals.
- The OECD Secretariat, led by the Secretary-General (currently Ángel Gurría), provides support to Standing and Substantive Committees. It is organised into Directorates, which include about 2,500 staff.
Delegates from the member countries attend committees' and other meetings. 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. 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 (i.e., 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.
Exchanges between OECD governments benefit from the information, analysis, and preparation of the OECD Secretariat. The secretariat collects data, monitors trends, and analyses and forecasts economic developments. Under the direction and guidance of member governments, 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, Small and Medium Enterprises (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 Innovation
- 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, which was €363 million in 2015 (around US$400 million) . The budget is funded by the member countries based on a formula related to the size of each member's gross national product. 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 UK 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 that 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 European Union and the European Patent Organisation.
|№||Secretary-General||Time served||Country of origin|
|1||Robert Marjolin||1948 – 1955||France|
|2||René Sergent||1955 – 1960||France|
|3||Thorkil Kristensen||1960 - September 1961||Denmark|
|№||Secretary-General||Time served||Country of origin|
|1||Thorkil Kristensen||30 September 1961 - 30 September 1969||Denmark|
|2||Emiel van Lennep||1 October 1969 - September 1984||Netherlands|
|3||Jean-Claude Paye||1 October 1984 - 30 September 1994||France|
|—||Staffan Sohlman (interim)||1 October 1994 - November 1994||Sweden|
|3||Jean-Claude Paye||November 1994 - 30 May 1996||France|
|4||Donald Johnston||1 June 1996 - 30 May 2006||Canada|
|5||José Ángel Gurría||1 June 2006 – present||Mexico|
Representatives of the 35 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.
- Africa Partnership Forum
- Business and Industry Advisory Committee (BIAC)
- Development Assistance Committee
- OECD Development Centre
- Institutional Management in Higher Education (IMHE)
- International Transport Forum (ITF) (formally known as the European Conference of Ministers of Transport)
- International Energy Agency
- Nuclear Energy Agency
- Partnership for Democratic Governance (PDG)
- Sahel and West Africa Club
- Trade Union Advisory Committee (TUAC)
There are currently 35 members of the OECD. The list includes 22 of the 28 European Union member states. The EU states not in the OECD are Bulgaria, Croatia, Cyprus, Lithuania, Malta, and Romania.
- Free Territory of Trieste (Zone A) (member of the OEEC until 1954, when it ceased to exist as an independent territorial entity).
Countries which have been invited to join
- Latvia: In May 2013, the OECD began accession negotiations with Latvia. In May 2016, the OECD invited Latvia to become the organization's 35th member. Latvia will become a full member after deposition of the ratification instrument with the French government, depository of the OECD Convention.
Countries currently in accession talks
- Colombia: In May 2013, the OECD decided to open accession negotiations with Colombia. On October 25, 2013, the OECD officially launched Colombia's accession process.
- Costa Rica: In May 2013, the OECD declared its intention to open accession negotiations with Costa Rica in 2015. On 9 April 2015, the OECD decided to open accession negotiations with Costa Rica.
- Lithuania: In May 2013, the OECD declared its intention to open accession negotiations with Lithuania in 2015. On 9 April 2015, the OECD decided to open accession negotiations with Lithuania.
- Russia: In May 2007, the OECD decided to open accession negotiations with Russia. In March 2014, the OECD halted membership talks in response to Russia's role in the 2014 Crimean crisis.
Relations with non-members
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 Global Relations Secretariat develops and oversees the strategic orientations of the relations with non-members.
On 16 May 2007, the OECD Ministerial Council decided to strengthen OECD's co-operation with Brazil, China, India, Indonesia and South Africa, through a process of enhanced engagement. The countries listed are key partners to the OECD. The countries contribute to the OECD's work in a sustained and comprehensive manner by direct and active participation in substantive bodies of the Organisation determined by mutual interest.
The OECD explores 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.
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 to a select few rich nations. In 1997–1998, the draft Multilateral Agreement on Investment (MAI) 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 competitive tax practices has raised criticism. The primary objection is the sanctity of tax policy as a matter of sovereign entitlement.
The following table shows various data for OECD member states, including area, population, economic output and income inequality, as well as various composite indices, including human development, viability of the state, rule of law, perception of corruption, economic freedom, state of peace, freedom of the press and democratic level.
|Note: The colors indicate the country's global position in the respective indicator. For example, a green cell indicates that the country is ranked in the upper 25% of the list (including all countries with available data).|
|Highest quartile||Upper-mid (3rd quartile)||Lower-mid (2nd)||Lowest|
- Competition regulator
- Frascati Manual
- German Marshall Fund
- Good Laboratory Practice
- Gulf Co-operation Council
- International organisations in Europe
- OECD Better Life Index
- Official development assistance
- Official statistics
- OSCE countries statistics
- Social quality
- Transfer pricing
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