- Organisation for Economic Co-operation and Development
Organisation for Economic Co-operation and Development (OECD)Founder States (1961)Other Member States
Secretariat Paris, France Membership 34 states,
20 founder states (1961)
Leaders - Secretary General José Ángel Gurría Establishment - as the OEEC1 16 April 1948 - reformed as the OECD 30 September 1961 Website
1 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 international economic organisation of 34 countries founded in 1961 to stimulate economic progress and world trade. It is a forum of countries committed to democracy and the market economy, providing a platform to compare policy experiences, seek answers to common problems, identify good practices, and co-ordinate domestic and international policies of its members.
The OECD 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. Most OECD members are high-income economies with a high Human Development Index (HDI) and are regarded as developed countries.
- 1 History
- 2 Objectives and activities
- 3 Structure
- 4 Member countries
- 5 Relations with non-members
- 6 Criticism
- 7 Indicators
- 8 See also
- 9 References
- 10 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. Since 1949, it has been headquartered in the Chateau de la Muette in Paris, France. After the Marshall Plan ended, the OEEC focused on economic questions.
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. The official founding members are the Republic of Austria, the Kingdom of Belgium, the Dominion of Canada, the Kingdom of Denmark, the French Republic, the Federal Republic of Germany, the Kingdom of Greece, the Republic of Iceland, the Republic of Ireland, the Italian Republic, the Grand Duchy of Luxembourg, the Kingdom of the Netherlands, the Kingdom of Norway, the Portuguese Republic, Spain, the Kingdom of Sweden, the Swiss Confederation, the Turkish Republic, the United Kingdom of Great Britain and Northern Ireland, and the United States of America. During the next 12 years 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.
More than just increasing its internal structure, OECD progressively created agencies: the OECD 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. This programme also included a membership option for these countries. 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. 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. On May 7, 2010, Chile became the organization's 31st member. On July 21, 2010, Slovenia became the 32nd member. On September 7, 2010, Israel became the 33rd member. On December 9, 2010, Estonia became the 34th member.
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, 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.
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 for a comparison of educational performances between countries.
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. 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 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.
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 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 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 iLibrary and the online bookshop.
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 which 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 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.
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 Organization.
- 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 Angel Gurria), provides support to Standing and Substantive Committees. It is organized in 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 (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.
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, 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[when?] around US$510 million or €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. 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.
- 1948–1955: Robert Marjolin
- 1955–1960: René Sergent
- 1960–1969: Thorkil Kristensen
- 1969–1984: Emiel van Lennep
- 1984–1994: Jean-Claude Paye
- 1994: Staffan Sohlman (interim)
- 1994–1996: Jean-Claude Paye
- 1996–2006: Don Johnston
- 2006– : José Ángel Gurría
Representatives of the 34 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
- 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 34 members of the OECD.
Country Membership Geographic location Notes Australia 7 June 1971 Oceania Austria 29 September 1961 Europe OEEC founding member. Belgium 13 September 1961 Europe OEEC founding member. Canada 10 April 1961 North America Chile 7 May 2010 South America Czech Republic 21 December 1995 Europe Denmark 30 May 1961 Europe OEEC founding member. Estonia 9 December 2010 Europe Finland 28 January 1969 Europe France 7 August 1961 Europe OEEC founding member. Germany 27 September 1961 Europe Joined OEEC in 1955 (West Germany). Greece 27 September 1961 Europe OEEC founding member. Hungary 7 May 1996 Europe Iceland 5 June 1961 Europe OEEC founding member. Ireland 17 August 1961 Europe OEEC founding member. Israel 7 September 2010 Asia Italy 29 March 1962 Europe OEEC founding member. Japan 28 April 1964 Asia South Korea 12 December 1996 Asia Luxembourg 7 December 1961 Europe OEEC founding member. Mexico 18 May 1994 North America Netherlands 13 November 1961 Europe OEEC founding member. New Zealand 29 May 1973 Oceania Norway 4 July 1961 Europe OEEC founding member. Poland 22 November 1996 Europe Portugal 4 August 1961 Europe OEEC founding member. Slovakia 14 December 2000 Europe Slovenia 21 July 2010 Europe Spain 3 August 1961 Europe Joined OEEC in 1959. Sweden 28 September 1961 Europe OEEC founding member. Switzerland 28 September 1961 Europe OEEC founding member. Turkey 2 August 1961 Eurasia OEEC founding member. United Kingdom 2 May 1961 Europe OEEC founding member. United States 12 April 1961 North America
- Cyprus: It applied for membership in 1995, but, according to the Cypriot government, it was vetoed by Turkey.
- Latvia: In 1996, Latvia along with Estonia and Lithuania signed a Joint Declaration expressing willingness of the three Baltic States to become full members of the OECD.
- Lithuania: (See Latvia.)
- Malta: In September 2005 the government of Malta applied to join the OECD as full member.
- Russia: The OECD agreed to invite Russia to become a full member in May 2007.
- Free Territory of Trieste (Zone A) (until 1954)
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 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 the Russian Federation. The OECD Ministerial Council of 2007 also decided to strengthen OECD's co-operation with Brazil, China, India, Indonesia and South Africa, through a process of enhanced engagement.
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 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 harmful tax practices has raised criticism. The primary objection is the sanctity of tax policy as a matter of sovereign entitlement.
Land areas, populations, economic indicators and various indexes of member states Country Area
(millions, Intl. $)
Australia 7,741,220 21,472 901,509.0 41,985 0.929 28.1 8.7 82.5 1.455 5.38 9.22 0.336 Austria 83,871 8,397 334,510.6 39,837 0.885 27.3 7.9 71.9 1.337 0.50 8.49 0.265 Belgium 30,528 10,566 405,159.7 38,346 0.886 34.1 7.1 70.2 1.413 4.00 8.05 0.269 Canada 9,984,670 33,639 1,331,266.5 39,575 0.908 27.7 8.9 80.8 1.355 7.00 9.08 0.319 Chile 756,102 17,135 253,788.6 14,811 0.805 40.7 7.2 77.4 1.710 10.50 7.67 0.503 Czech Republic 78,867 10,279 274,112.6 26,667 0.865 42.4 4.6 70.4 1.320 7.50 8.19 0.255 Denmark 43,094 5,485 215,455.4 39,281 0.895 23.8 9.3 78.6 1.289 2.50 9.52 0.248 Estonia 45,228 1,339 28,346.4 21,170 0.835 49.3 6.5 75.2 1.798 2.00 7.68 0.313 Finland 338,145 5,347 196,673.3 36,782 0.882 19.7 9.2 74.0 1.352 0.00 9.19 0.263 France 643,427 62,452 2,232,694.4 35,751 0.884 34.0 6.8 64.6 1.697 13.38 7.77 0.293 Germany 357,022 82,834 3,108,389.0 37,526 0.905 33.9 7.9 71.8 1.416 4.25 8.38 0.295 Greece 131,957 11,284 316,701.1 28,066 0.861 47.4 3.5 60.3 1.947 19.00 7.92 0.321 Hungary 93,028 10,007 210,364.0 21,022 0.816 48.7 4.7 66.6 1.495 7.50 7.21 0.272 Iceland 103,000 306 11,481.2 37,520 0.898 30.1 8.5 68.2 1.148 0.00 9.65 0.279 Ireland 70,273 4,347 175,104.5 40,282 0.908 25.3 8.0 78.7 1.370 2.00 8.79 0.299 Israel 22,072 7,285 218,019.6 29,927 0.888 N/Aa 6.1 68.5 2.901 23.25 7.48 0.371 Italy 301,340 59,004 1,995,233.4 33,815 0.874 45.8 3.9 60.3 1.775 15.00 7.83 0.337 Japan 377,915 127,176 4,330,283.7 34,050 0.901 31.0 7.8 72.8 1.287 2.50 8.08 0.329 South Korea 99,720 48,875 1,423,703.8 29,129 0.897 38.8 5.4 69.8 1.829 13.33 8.11 0.315 Luxembourg 2,586 479 42,172.5c 88,784c 0.867 26.1 8.5 76.2 1.341d 4.00 8.88 0.273 Mexico 1,964,375 108,396 1,647,212.0 15,196 0.770 75.1 3.1 67.8 2.362 47.50 6.93 0.476 Netherlands 41,543 16,448 693,319.3 42,152 0.910 28.3 8.8 74.7 1.628 0.00 8.99 0.294 New Zealand 267,710 4,258 128,614.2 30,205 0.908 24.8 9.3 82.3 1.279 1.50 9.26 0.330 Norway 323,802 4,762 274,469.1 57,637 0.943 20.4 8.6 70.3 1.356 0.00 9.80 0.250 Poland 312,685 37,798 752,088.2 19,898 0.813 46.8 5.3 64.1 1.545 8.88 7.05 0.314 Portugal 92,090 10,626 272,467.9 25,642 0.809 32.3 6.0 64.0 1.453 12.36 8.02 0.361 Slovakia 49,035 5,401 130,703.3 24,200 0.834 47.1 4.3 69.5 1.576 11.50 7.35 0.246 Slovenia 20,273 2,025 57,600.5 28,445 0.884 35.5 6.4 64.6 1.358 13.44 7.69 0.236 Spain 505,370 44,683 1,503,121.2 33,640 0.878 43.1 6.1 70.2 1.641 12.25 8.16 0.309 Sweden 450,295 9,237 368,979.8 39,946 0.904 22.8 9.2 71.9 1.401 0.00 9.50 0.259 Switzerland 41,277 7,671 359,976.4 46,927 0.903 23.2 8.7 81.9 1.421 0.00 9.09 0.276 Turkey 783,562 76,505 1,118,839.0 14,624 0.699 74.9 4.4 64.2 2.411 49.25 5.73 0.409 United Kingdom 243,610 62,309 2,213,646.4 35,527 0.863 34.1 7.6 74.5 1.631 6.00 8.16 0.341 United States 9,826,675 310,233 14,582,400.0 47,005 0.910 34.8 7.1 77.8 2.063 6.75 8.18 0.378 OECDb 36,226,367 1,228,060 42,108,407.0 34,289 0.871 36.3 6.9 71.7 1.607 9.21 8.27 0.313
a The FSI index supplies no figure for Israel, but rather supplies a figure (84.4) for "Israel/West Bank".
b OECD total used for indicators 1 through 3; OECD weighted average used for indicator 4; OECD unweighted average used for indicators 5 through 12.
c Data are for 2009.
d Data are for 2010.
Note: Green-colored cells indicate highest value or best performance in index, while yellow-colored cells indicate the opposite.
- Competition regulator
- Developed Country
- Frascati Manual
- German Marshall Fund
- Good Laboratory Practice
- Gulf Co-operation Council
- International organisations in Europe
- OECD Better Life Index
- Official statistics
- OSCE countries statistics
- Transfer pricing
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