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"No foreign policy--no matter how ingenious--has any chance of success if it is born in the minds of a few and carried in the hearts of none." Henry Kissinger, 1973 |
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The OECD groups 30 member countries in a unique forum to discuss, develop and refine economic and social policies. They compare experiences, seek answers to common problems and work to co-ordinate domestic and international policies to help members and non-members deal with an increasingly globalised world. Their exchanges may lead to agreements to act in a formal way-- for example by establishing legally binding agreements to crack down on bribery, or codes for free flow of capital and services. The OECD is also known for 'soft law' -- non-binding instruments on difficult issues such as its Guidelines for multinational enterprises. Beyond agreements, the discussions at the OECD make for better-informed work within member countries' own governments across the broad spectrum of public policy and help clarify the impact of national policies on the international community.
The OECD is a group of like-minded countries. Essentially membership is limited only by a country's commitment to a market economy and a pluralistic democracy. It is rich, in that its 30 members produce two thirds of the world's goods and services, but it is by no means exclusive. The core of original European and North American members has expanded to include Japan, Australia, New Zealand, Finland, Mexico, Korea and four former communist states in Europe: the Czech Republic, Hungary, Poland and the Slovak Republic. Non-members are invited to subscribe to OECD agreements and treaties, and the organisation now involves in its work some 70 non-member countries from Brazil, China and Russia to least developed countries in Africa and elsewhere.
Exchanges between OECD governments flow from information and analysis provided by a Secretariat in Paris. The organisation is one of the world's largest and most reliable sources of comparable statistical, economic and social data. Parts of the Secretariat collect data, monitor trends, analyse and forecast economic developments, while others research social changes or evolving patterns in trade, environment, agriculture, technology, taxation and more.
The OECD is at the forefront of efforts to understand and help governments respond to new challenges such as sustainable development, electronic commerce, biotechnology and food safety. This work underpins discussion by member countries when they meet in specialised committees of the OECD. Much of the research and analysis is published, on paper or online.
How has it developed?
The OECD grew out of the Organisation for European Economic Co-operation ( OEEC), which was formed to administer American and Canadian aid under the Marshall Plan for the reconstruction of Europe after World War II. Since it took over from the OEEC in 1961, the OECD's vocation has been to build strong economies in its member countries, improve efficiency, hone market systems, expand free trade and contribute to development in industrialised as well as developing countries.
In recent years the OECD has moved beyond a focus on its member countries to offer its analytical expertise and accumulated experience to developing and emerging market economies.
The emergence of globalisation has seen the scope of the OECD's work move from examination of each policy area within each member country to analysis of how various policy areas interact with each other, between countries and beyond the OECD area. This is reflected in work on issues such as sustainable development, bringing together environmental, economic and social concerns across national frontiers for better understanding of the problems and the best way to tackle them together.
The Organisation is also expanding its relationship with civil society. Initially focused on relations with business and labour, these have broadened to include a wide range of non-government organisations. The OECD also increasingly invites public comment on various aspects of its work.
As it opens to many new contacts around the world, the OECD will broaden its scope, looking ahead to a post-industrial age in which it aims to weave OECD economies into a yet more prosperous and increasingly knowledge-based world economy.
Funding
The OECD is funded by the member countries. National contributions to the annual budget are based on a formula related to the size of each member's economy. The largest contributor is the United States, which provides 25% of the budget, followed by Japan. With the approval of the Council, countries may also make separate contributions to particular programmes or projects.
The size of the annual budget, currently about US $ 200 million per year, as well as the programme of work to be undertaken, is decided by member countries in the Council.
The work of the OECD
The OECD provides a setting for reflection and discussion, based on policy research and analysis, that helps governments shape policy that may lead to a formal agreement among member governments or be acted on in domestic or other international fora. Unlike the World Bank or the International Monetary Fund, the OECD does not dispense money.
The OECD's way of working consists of a highly effective process that begins with data collection and analysis and moves on to collective discussion of policy. Mutual examination by governments, multilateral surveillance and peer pressure to conform or reform are at the heart of OECD effectiveness. It was the behind the scenes work at the OECD that evaluated the cost of agricultural subsidies, key material in agreements negotiated later to lower farm subsidies. OECD analysis of the contribution of the information technology revolution to economic growth helps governments craft economic policy, while work on the causes and cures for unemployment helps give political impetus to policies to reduce it. Crucial analytical work and consensus building on trade in services fed into the successful conclusion of the Uruguay Round.
And sometimes the discussions evolve into negotiations at the OECD and OECD countries agree on rules of the game for international co-operation. They can culminate in formal agreements, for example on combating bribery, on export credits, or on capital movements; or they may produce standards and models for international taxation or recommendations and guidelines covering environmental practices or electronic commerce.
Much of the material collected and analysed at the OECD is published; from press releases and regular compilations of data and projections to one-time publications or monographs on particular issues; from surveys of the economy of each member country to regular reviews of education systems, science and technology policies or environmental performance.
OECD Member Countries
Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Spain, Sweden, Switzerland, Turkey, United Kingdom, United States
Find out more about the OECD by clicking HERE
Return to the Foreign Aid/Affairs/Defense budget by clicking HERE
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