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  • Publication Date: 11-2003
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: A stable institutional framework in Chile has provided the foundations for growth and confidence of international markets. While a comprehensive social agenda is putting pressure on resources under the recent economic slow-down, the Chilean government should be praised for having maintained a sound fiscal and monetary stance and building on its unique institutional framework based on the freedom of choice. The current challenges are to strengthen the coherence of this development policy agenda with a vision to long-term growth and broader social consensus. Chile is a small open economy, for which international competitiveness is the cornerstone for sustainable growth. The latter is the outcome of the multiple policy synergies discussed above. The first important link is to continue preserving a sound macroeconomic framework avoiding distortions that may produce excessive real exchange rate appreciation, which could hinder the incentives to invest and expand employment in the tradable sector. The deepening of financial intermediation and development of risk capital are needed to support the emergence of new and more innovative firms. A better functioning of the labour market is critical to the development of the enterprise sector. In particular increased female labour participation would support the development of light industries and services. Investment in human capital, in particular education and workers' training, is needed to develop products with a higher technological content. The administrative conditions and regulation of product markets should also be improved, notably by reducing administrative barriers to enterprise creation and removing distortions in the tax treatment of cross-border interenterprise financial flows. These policy link-ages would help increase product variety and intra-industry trade that could contribute to reduce the vulnerabilities associated with an excessive reliance on natural resources and export concentration. In all these areas of reform, Chile is now in a position to emulate and converge towards the more advanced benchmark of OECD countries.
  • Topic: Agriculture, Economics, Environment, Human Rights, International Organization, Political Economy
  • Political Geography: Chile
  • Publication Date: 11-2003
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: Trade and investment, coupled with transfers of knowledge and technology and an appropriate institutional framework, have been major engines of global economic growth in developed and developing countries over the past 50 years. From the mid-1980s, the pace of global economic integration and growth accelerated significantly. Sustaining global economic growth and achieving a better sharing of its benefits will further the interests of all countries, developing and developed alike. Recognising this, the international community has committed itself to specific Millennium Development Goals and to ways of achieving them.
  • Topic: Agriculture, Economics, Environment, Human Rights, International Organization, Political Economy
  • Publication Date: 11-2003
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: Fiscal rectitude, progress towards macroeconomic stabilisation, and past structural reforms have been necessary and desirable, but have not yet been sufficient to raise potential growth to rates that would allow closing the gap in living standards with other OECD countries. Prolonged cyclical weakness, with no unambiguous signs yet of a vigorous upturn, has depressed private investment, which is also hampered by legal and regulatory obstacles in key sectors, electricity in particular. Mexico's catching-up is further hindered by low human capital accumulation. The administration has insufficiently solid and stable revenue to finance necessary social spending and public infrastructure investment on the required scale. Policies should therefore give priority to broadening the tax base and creating conditions - economic, financial and legal - in which a competitive private sector has the ability and incentives to invest more. It is also important to spend more productively in areas such as education; efforts there should concentrate on making the existing school system, and the teaching body, more effective, and on allocating more resources to the training of adults. Although the large informal sector provides a kind of safety valve for many of the low-skilled, the formal sector must become a more attractive place in the longer term in which to work and to employ. Emigration also provides a safety valve, and remittances lift many households out of acute poverty. A migration agreement between the United States and Mexico would bring benefits to both. Levels of water and air pollution are unacceptably high in Mexican urban areas, and though policies are addressing this, the (implicit or explicit) pricing of natural resources and of polluting activities is far from optimal. Overall, Mexico needs to move ahead with comprehensive structural reforms, including most immediately approval of the tax, electricity and labour reforms, so as to fully release the country's growth potential and provide resources to deal with important issues of human capital and poverty relief.
  • Topic: Agriculture, Economics, Environment, Human Rights, International Organization, Political Economy
  • Political Geography: Mexico
  • Publication Date: 11-2003
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: Violent conflict undoubtedly affects West Africa's prospects for economic development and integration. However, the nature of these effects is still poorly understood. As part of the SWAC regional programme on conflict and stability, the SWAC Secretariat undertook a literature review and an electronic consultation of southern and northern agencies and specialists in summer 2003. This aimed to assess the economic consequences of violent conflict at multiple levels; identify operational lessons on how best to deal with these effects; and highlight key areas for further work where the SWAC can add value. The core findings of the review are presented in this note.
  • Topic: Agriculture, Economics, Environment, Human Rights, International Organization, Political Economy
  • Political Geography: West Africa
  • Publication Date: 11-2003
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: Health is higher on the international agenda than ever before and improving the health of poor people is a central issue in development. Poor people suffer worse health and die younger. They have higher than average child and maternal mortality, higher levels of disease, and more limited access to healthcare and social protection. But health is also a crucially important economic asset, particularly for poor people. Their livelihoods depend on it. When poor people become ill or injured, their entire household can become trapped in a downward spiral of lost income and high healthcare costs.
  • Topic: Agriculture, Economics, Environment, Human Rights, International Organization, Political Economy
  • Publication Date: 10-2003
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: To raise Austria's growth potential, significant changes in the institutional set-up will be necessary in order to achieve sound public finances, higher labour force participation - in particular among older workers - and to open up the sheltered sectors of the economy to healthy competition. Although the government's emphasis on structural spending reductions to achieve eventual budget balance while also creating room for tax cuts is appropriate, earlier fiscal easing means that under current plans budget balance will be restored only after 2007. Such a deficit path is not appropriate given Austria's high debt-to-GDP ratio. Stronger spending restraint will be necessary in order to create room for the major tax reform that the authorities are committed to. Public expenditure reform is focused on reducing public sector employment, but the cost savings are eroded by the generous early retirement programmes used to achieve these employment reductions. Comprehensive public sector reform has to address the complicated -federal fiscal relationships and make sure that tasks are allocated to the most appropriate private or public agent. More cost-benefit analysis and output performance budgeting would help to improve the efficiency with which public resources are used. The pension reform undertaken by the government marks considerable progress in moving to sustainable old-age income replacement through measures designed to increase further the labour force participation rate of older workers and women and lengthen working lives considerably. Further necessary action includes measures to improve the employability of older workers, in particular the elimination of excessive seniority wage components, and a more stringent revision of the remaining age-specific employment protection regulation. The large differences in economic performance between manufacturing, which is fully exposed to international competition, and services points to considerable scope for increasing competition by reducing entry barriers and facilitating the operations of the newly established competition authority. Proceeding along these lines will help Austria to realise the positive potential associated with Eastern enlargement while at the same time becoming more resilient to adverse supply side shocks.
  • Topic: Agriculture, Economics, Environment, Human Rights, International Organization, Political Economy
  • Political Geography: Austria
  • Publication Date: 10-2003
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: In many respects, France fares well among OECD countries in terms of indicators of the health status of its population and resources allocated to its health care system. The French population (and particularly French women) enjoys a relatively high life expectancy compared with the average across OECD countries. The French have a free choice of doctor, and can approach relatively easily both generalists and specialists. Also, the French health system has not generally experienced the problems of long waiting lists for certain treatments, as has been the case in several other OECD countries. The health care system in France is predominantly funded through public sources, but with services delivered by both the public and private sector. Universal access is provided to doctors and hospital services, with some co-payments for patients which vary depending on the type of services. Since the introduction of the Universal Health Coverage Law (Loi de la Couverture médicale universelle or CMU) in 2000, people with low income who are not covered by complementary insurance have access to doctors and hospitals free of charge. Overall, public satisfaction with the health care system in France has traditionally been much higher than in most other countries. However, health spending in France is relatively high in comparison with the OECD average.
  • Topic: Diplomacy, Economics, International Organization, International Trade and Finance, Political Economy
  • Political Geography: France
  • Publication Date: 10-2003
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: The prospects for lower growth in the medium-long term will require far-reaching fiscal and structural adjustment. The authorities have made a start in reducing public expenditure growth in line with these more subdued prospects but more restraint will be necessary to meet their medium-term objectives. Adjustments to the general public pension scheme, preferably by reducing the high replacement rates, will be needed to make the scheme sustainable in the long term. The authorities have begun to tackle the early retirement problem, which will help to reduce the scale of the required adjustments to make the general public pension scheme sustainable, but more needs to be done. The reforms to the disability pension, which is one of the major routes to premature withdrawal from the labour force, should be complemented by reducing the earlyretirement pension on an actuarial basis in relation to a pension taken at the official retirement age and by reducing the ease with which imputed contributions can be obtained. Lower growth will also diminish the buffering role of cross- border employment on the national labour market, increasing the risk that adverse shocks increase structural unemployment. To counter this risk, the authorities should reduce the high replacement rates for unemployment and related benefits and ease employment protection regulation.
  • Topic: Diplomacy, Economics, International Organization, International Trade and Finance, Political Economy
  • Political Geography: Luxembourg
  • Publication Date: 10-2003
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: Most OECD countries have been actively reforming their public sectors for two decades. Initially the problem seemed to be a relatively straightforward one of improving efficiency, reforming management practices, and divesting public involvement in commercial enterprises. These reforms have indeed had a major impact but they have also given rise to some unexpected problems of their own. Even a seemingly straightforward action such as simplifying a welfare benefit form and cutting the time taken to process it may, for example, encourage more people to apply for the benefit, increasing the workload and making it more difficult to cut waiting time. While more efficient government is certainly desirable, efficiency alone is not a guarantee of better government.
  • Topic: Diplomacy, Economics, International Organization, International Trade and Finance, Political Economy
  • Publication Date: 09-2003
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: Since the late 1990s, Finland has been a leader in exploiting information and communication technology (ICT) to renew its economy and to reform its public administration. Its reputation for successfully providing proactive electronic government services and information has brought officials from around the world to learn from its experience.
  • Topic: Diplomacy, Economics, International Organization, International Trade and Finance, Political Economy
  • Publication Date: 09-2003
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: E-government is more about government than about "e". As a tool to achieve better government, e-government offers potential solutions to leaders across the whole of government: IT managers, programme managers, agency heads, government-wide e-government planners and co-ordinators, and politicians all have a role to play. Yet the roles of these leaders differ, and even the role of an individual leader changes as e-government develops in a given country. At the beginning there may be an immediate need to foster innovation and diffusion of technology, whereas organisational change becomes more important once IT applications are in place. Certain key e-government principles are common to all leaders, though their relative importance will differ. While the elements in this policy brief may be applicable to leaders at various levels, they are especially relevant to leaders with broad responsibilities and a strategic vision of e-government.
  • Topic: Diplomacy, Economics, International Organization, International Trade and Finance, Political Economy
  • Publication Date: 09-2003
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: Foreign investment has played an important role in China's economic development for almost a quarter of a century and is vital for that development to continue. But while China has been highly successful in attracting foreign direct investment (FDI) so far, and has made significant progress in improving its FDI policy framework, it has not fully exploited its potential to attract investment from OECD countries. To make the most of the potential benefits of joining the World Trade Organization (WTO) and to increase FDI inflows while enhancing their contribution to domestic development China will need to persevere with efforts to bring its laws and regulations into harmony with internationally recognised standards and to ensure they are fully and consistently implemented at local level.
  • Topic: Diplomacy, Economics, International Organization, International Trade and Finance, Political Economy
  • Political Geography: China
  • Publication Date: 09-2003
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: Canada's economy has done comparatively well over the past two years, demonstrating a noticeably improved resilience to unfavourable shocks. Over the medium term the economy is poised to achieve growth rates that compare favourably with past performance, but that will not be enough to eliminate the per capita income gap with the United States. The fundamental challenge is to make Canada an even more attractive place to live, work and invest. While past reforms have begun to pay off, there is still unfinished business. To boost the employment rate further the government should reduce disincentive effects arising from the tax and benefit systems by, for example, making greater use of in-work benefits and reintroducing experience rating of Employment Insurance users. Faster productivity gains are more likely to be achieved in an economic environment conducive to innovation. A key to greater dynamism is strengthening competition by eliminating remaining foreign ownership limits and barriers to internal and external trade and continuing electricity deregulation. Investing in skills should also remain a priority, with a particular emphasis on adult education. The nation has benefited by importing human capital from abroad through immigration but needs to intensify its efforts to remove the obstacles that prevent immigrants from having their skills fully utilised in the labour market. Having introduced a sound fiscal framework and reformed its public pension system Canada is in a better position than most other countries in facing ageing-related fiscal challenges, but the trend rise in health-care costs remains a risk. With the recent budget the government chose to address the short-term needs of the existing system. But, ultimately, ways to control the rise in budgetary costs - whether through incentives to raise efficiency or through cost sharing - will need to be explored, otherwise the resources needed to finance the future burden should be set aside in advance, for example by setting a bolder debt reduction target. Finally, environmental sustainability will be enhanced with least cost to the economy if the ambitious greenhouse gas emissions reduction is achieved through market-oriented instruments rather than command and control measures or voluntary agreements.
  • Topic: Diplomacy, Economics, International Organization, International Trade and Finance, Political Economy
  • Political Geography: United States, Canada
  • Publication Date: 08-2003
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: The OECD recognises the valuable contribution that civil society can make to the public policy-making process, and attaches great importance to the Organisation's own consultation and dialogue with civil society organisations (CSOs). This continuing dialogue builds trust in public institutions and promotes public understanding of the benefits and challenges of global economic and social change.
  • Topic: Diplomacy, Economics, International Organization, International Trade and Finance, Political Economy
  • Publication Date: 08-2003
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: Trade and investment, coupled with transfers of knowledge and technology and an appropriate institutional framework, have been major engines of global economic growth in developed and developing countries over the past 50 years. From the mid-1980s, the pace of global economic integration and growth accelerated significantly. Sustaining global economic growth and achieving a better sharing of its benefits will further the interests of all countries, developing and developed alike. Recognising this, the international community has committed itself to specific Millennium Development Goals and to ways of achieving them.
  • Topic: Diplomacy, Economics, International Organization, International Trade and Finance, Political Economy
  • Publication Date: 08-2003
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: The building sector is economically important in OECD countries, accounting for a significant proportion of industrial activities and jobs. In fact, the construction industry - buildings and infrastructure such as roads and electricity networks - accounts for around 5%-15% of their gross domestic product (GDP), and 45%-55% of their gross capital formation. The industry also provides 5%-10% of total employment in OECD countries. The building sector also has a great impact on the environment. Building activities such as design, construction, use, refurbishment and demolition all affect the environment, either directly or indirectly. p>
  • Topic: Diplomacy, Economics, International Organization, International Trade and Finance, Political Economy
  • Publication Date: 08-2003
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: The global annual welfare gains from further multilateral trade liberalisation, involving both tariff reduction and trade facilitation, would be substantial. Recent OECD estimates suggest that they would range, depending on the precise scenario, between US$117 billion and US$173 billion. For individual economies, depending on the region to which they belong, the gains would amount to annual real increases in gross domestic product (GDP) of between 0.2% and 1.8%, the OECD estimates show. These figures are sufficiently impressive to inspire international action. But would the gains be automatic? Would significantly improved market access be enough to stimulate diversification and trade-led growth? And will increased trade necessarily contribute to reducing poverty and achieving the other Millennium Development Goals identified by the international community?
  • Topic: Diplomacy, Economics, International Organization, International Trade and Finance, Political Economy
  • Publication Date: 08-2003
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: Services, from health and education to telecommunications and transport, are becoming the single largest sector in many economies. Not only do they provide the bulk of employment and income in many countries, but in areas such as the financial or telecommunications sectors, services provide vital input for the production of other goods and services. So the efficiency of the services sector is crucial to the efficiency of the overall economy.
  • Topic: Diplomacy, Economics, International Organization, International Trade and Finance, Political Economy
  • Publication Date: 08-2003
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: The development focus of the current multilateral trade negotiations launched in Doha in late 2001 has highlighted the need for trade liberalisation in areas of export interest for developing countries. When it comes to services, a key issue for these countries is the temporary movement of people across borders to supply services, for example in areas such as nursing or information technology.
  • Topic: Diplomacy, Economics, International Organization, International Trade and Finance, Political Economy
  • Publication Date: 08-2003
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: Regional trade agreements (RTAs) are an integral part of international trade, accounting for almost half of world trade and expected to grow further in the next few years. These agreements operate alongside global multilateral agreements under the World Trade Organization (WTO), and have both positive and negative effects. They can be attractive, for example, because it may be easier for a small group of neighbouring countries with similar concerns and cultures to agree on market opening in a particular area than to reach agreement in a wider forum such as the WTO. They can also offer new approaches to rule-making and so act as stepping stones on the way to a multilateral agreement.
  • Topic: Diplomacy, Economics, International Organization, International Trade and Finance, Political Economy
  • Publication Date: 08-2003
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: International trade has grown rapidly in recent years, and with it the relative importance of border procedures such as Customs requirements, adding to the cost for governments and business, and ultimately for the customer. Indeed, surveys suggest that border-related costs such as the expense of supplying the required Customs documents or the surcharges arising from procedural delays when importing goods could total as much as 15% of the value of the goods being traded in some cases.
  • Topic: Diplomacy, Economics, International Organization, International Trade and Finance, Political Economy
  • Publication Date: 08-2003
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: The opening of markets has boosted trade and economic growth worldwide in the past few decades. Yet tariffs – taxes imposed by importing countries on foreign goods – still remain a key obstacle to market access. The potential benefits of further reducing this obstacle are significant. OECD estimates indicate that scrapping all tariffs on merchandise trade and reducing trade costs by 1% of the value of trade worldwide would boost global welfare by more than USD 170 billion dollars a year. These gains would contribute a boost to regions around the world, adding the equivalent of up to 2% to the present annual gross domestic product (GDP) in some areas. No wonder that both developed and developing countries consider substantial tariff reductions as a central goal of the current multilateral trade talks in the World Trade Organization (WTO).
  • Topic: Diplomacy, Economics, International Organization, International Trade and Finance, Political Economy
  • Publication Date: 07-2003
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: Entering its fifth year of existence, the European Economic and Monetary Union (EMU) has met major headwinds. At the advent of the single currency the euro area experienced solid economic growth, with unemployment falling and public finances rapidly improving. However, a number of structural problems were exposed with the cyclical downturn since 2001, from which the area is recovering only hesitantly. The challenges facing policy makers at present are both of a short-run and medium-run nature. Policy makers are currently grappling with sluggish demand. Responding to this challenge, monetary policy has been eased and fiscal policy reacted through the automatic stabilisers. However, the room for manoeuvre was reduced by lingering inflationary pressures and earlier insufficient fiscal adjustment in several member states. Meanwhile the euro exchange rate has appreciated significantly. Over the medium term, the Community has set ambitious targets and a vast programme for enhancing the performance of labour, product and financial markets. This programme needs to be pursued with vigour, thereby raising the odds of large gains in trend growth and jobs while making it easier to achieve sound fiscal positions.
  • Topic: Diplomacy, Economics, International Organization, International Trade and Finance, Political Economy
  • Political Geography: Europe
  • Publication Date: 07-2003
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: After several years of rapid expansion, the French economy has entered into a period of below potential growth, with a negative output gap opening up. Monetary conditions have been relaxed, while fiscal policy has eased excessively, provoking the European Commission to initiate an excessive deficit procedure. As uncertainty dissipates towards the middle of this year, the economy should pick up speed, reaching a growth rhythm of around 2 per cent in 2004. Nevertheless, over the medium term, in the absence of substantial reforms the ageing of the population risks threatening economic and fiscal equilibrium. Current pension and healthcare reform initiatives and plans to redress spending over the medium term go in the right direction. However, in order to ensure medium and long-term fiscal sustainability, additional policies to slow the expansion of health and pension spending are required, while efforts to raise employment rates and potential output are needed to improve the economy's ability to finance future ageing-related expenditure. Here, programmes that offer the possibility of on-the-job training should be expanded so as to reactivate young and lowskilled workers, while reforms to early-retirement schemes and the pension system need to be continued so as to restore work incentives for older workers. Ongoing tax and labour market reforms and policies to facilitate the development of high-tech and fast growing enterprises, which should help promote investment and higher productivity growth, also need to be pursued. The opening of the capital of stateowned enterprises and their eventual privatisation, and planned improvements to governance structures should help promote growth, but revenues from sell-offs ought to be used to reduce debt. Finally, in order to better manage the totality of public expenditures, the authorities need to implement reforms that can be used to ensure that all spending organisms contribute to controlling spending. Here, it will be necessary to implement mechanisms that would improve the effectiveness of measures to control healthcare spending. Moreover, decision-makers need to be more directly confronted with the long-term consequences of their actions. Initiatives such as decentralisation and the new budget framework law should help in this regard. Pursuit of reforms along all of these lines should permit society to meet the fiscal challenge posed by population ageing, while retaining high levels of service.
  • Topic: Diplomacy, Economics, International Organization, International Trade and Finance, Political Economy
  • Political Geography: Europe, France
  • Publication Date: 06-2003
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: The traditional dynamism and flexibility of the Italian economy has faltered in recent years, in part because of the unfavourable developments in the international economy. Furthermore, structural reforms have not yet gone far enough to turn the tide. Despite supportive fiscal policies and monetary conditions, growth is sluggish, confidence is at a low ebb, inflation is above the euro-area average, and there are perceptions of a pervasive loss of competitiveness. As regards fiscal policy, room for manoeuvre has now been greatly reduced by tax cuts – desirable in themselves – and significant additional corrective measures will be required for some years to come, if medium-term targets are to be achieved and long-term fiscal sustainability is to be assured. Such corrective measures should be of a structural and permanent nature, with prime candidates being savings in public pensions and health care, and increased public sector efficiency. The pension system is very expensive, in large part because it still encourages early retirement, thus resulting in inefficient public spending and low employment rates. These perverse features need to be removed. Public health spending is not efficiently administered: recent agreements on standards and financing with regions are a step forward, and a more incisive control of costs could derive from the quarterly monitoring of spending that has already been implemented. In public administration, the retirement of large numbers of public employees creates opportunities for a more effective and less costly redeployment of human resources. Overall economic performance would be improved by policies that further strengthen competition in product markets, for example by not eroding the powers and independence of the sectoral regulators. Privatisations should be vigorously resumed and effective financial market monitoring of firms ensured. Speedier bankruptcy procedures should be introduced that give priority to efficient reallocation of resources. Together with less rigid employment protection legislation, this might encourage more small firms to expand to levels that would permit more investment in both human and R capital. Recent employment developments have been positive, and further improvements could be achieved by encouraging the social partners to allow wages of workers of all ages to more closely reflect their productivity and local conditions. Planned improvements in the social safety net and the functioning of employment services should also boost job creation by making employees willing to accept more flexible employment conditions. In the longer term, increasing the levels of output and living standards will also depend on raising the skills and qualifications of Italy's labour force. Proposed educational reforms could improve them both and thereby help to realise Italy's full economic potential.
  • Topic: Diplomacy, Economics, International Organization, International Trade and Finance, Political Economy
  • Political Geography: Italy
  • Publication Date: 06-2003
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: One of the most common complaints raised by businesses and citizens in OECD countries is the amount and complexity of government formalities and paperwork. Enterprises and citizens spend much time and devote significant resources to activities such as filling out forms, applying for permits and licences, reporting business information, notifying changes etc. In many cases, practices have become extremely complex, or irrelevant and cumbersome, generating unnecessary regulatory burdens – so-called “red tape”. The costs imposed on the economy as a whole are significant. When excessive in number and complexity, administrative regulations can impede innovation, create unnecessary barriers to trade, investment and economic efficiency, and even threaten the legitimacy of regulation and the rule of law.
  • Topic: Diplomacy, Economics, International Organization, International Trade and Finance, Political Economy
  • Publication Date: 06-2003
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: The OECD Guidelines for Multinational Enterprises are one of the world's foremost corporate responsibility instruments and are becoming an important international benchmark for corporate responsibility. They contain voluntary principles and standards for responsible business conduct in such areas as human rights, disclosure of information, anti-corruption, taxation, labour relations, environment, and consumer protection. They aim to promote the positive contributions multinational enterprises can make to economic, environmental and social progress.
  • Topic: Economics, Environment, Human Rights, International Organization, International Trade and Finance
  • Publication Date: 06-2003
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: OECD countries have recently agreed to a positive reform agenda for agricultural policies. Central to this agenda is the need to set out clearly the objectives of agricultural policies, and to monitor the performance of alternative policies in attaining them. In most cases, the best way to achieve an objective is to target it directly. Thus, where agriculture is deemed to provide public services, such as a pleasing countryside or environmental benefits, any required support for those services could be provided directly, rather than through policies that stimulate output. Conversely, environmental degradation could be taxed or regulated at source. Where agricultural households have low incomes, there may be a case for policies that concentrate benefits among poorer households, as opposed to blanket support measures that pay more to larger (and typically wealthier) farmers and to landowners. Reform along these lines would improve the cost-effectiveness of government programmes, and would greatly reduce disruptions to international markets. At the same time, not everyone will gain from reform, at least in the short term. There may therefore be a need for temporary adjustment assistance for farm households that are negatively affected. The broader opportunities to improve economic well-being call for policies that respond explicitly to a more diverse range of societal interests.
  • Topic: Agriculture, Economics, Environment, International Trade and Finance
  • Publication Date: 05-2003
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: An important obstacle to achieving environmental goals in many countries has been the failure to adequately address the associated financial issues: the costs of achieving goals; how those costs could be minimised; and the challenge of matching costs with available resources. The need for a fresh approach has become evident as central European countries come to terms with mobilising substantial financial resources to comply with challenging EU environmental requirements, and as the countries of Eastern Europe, Caucasus and Central Asia (EECCA) struggle to maintain even the low levels of services currently delivered by environmentally-related infrastructure.
  • Topic: Economics, Environment, International Trade and Finance
  • Political Geography: Europe, Central Asia, Eastern Europe
  • Publication Date: 04-2003
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: The urban water sector presents difficult economic and political choices for governments. The provision of water and sanitation services has undoubtedly reduced disease and yielded other health benefits. Free or cheap access to water has also spurred a variety of other uses from maintaining lawns to washing cars. At the same time, this sector is plagued by a long history of under-pricing, and opposition to full cost pricing for ethical and social reasons. These factors have contributed to the unwillingness of many governments to acknowledge water as a finite natural resource and an economic good – a commodity that needs a market price reflecting the cost of provision and its true value to society.
  • Topic: Agriculture, Economics, Government, Industrial Policy
  • Publication Date: 03-2003
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: There is widespread concern that poor water management will be one of the major factors limiting sustainable development during the next few decades. Water shortages are common in many regions, and are exacerbated by the pollution or degradation of many water bodies. There are conflicting demands for available water resources, both between human, economic, and ecosystem needs and between regions sharing a single water basin, in some cases leading to geopolitical security threats. World population roughly doubled over the last 50 years, while water consumption worldwide quadrupled. With urban populations growing faster than rural populations, the financial pressures on urban water utilities are intensifying.
  • Topic: Agriculture, Economics, Environment, Human Rights, International Organization, Political Economy
  • Publication Date: 02-2003
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: OECD countries spend at least twice as much on disability-related programmes as they spend on unemployment. Disability benefits on average account for more than 10 percent of total social spending. In the Netherlands, Norway and Poland they reach as much as 20 percent.
  • Topic: Development, Economics, Government, Human Welfare, Non-Governmental Organization
  • Political Geography: Norway, Poland, Netherlands
  • Publication Date: 11-2002
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: The OECD recognises the valuable contribution that civil society can make to the public policy-making process, and attaches great importance to the Organisation's own consultation and dialogue with civil society organisations (CSOs). This continuing dialogue builds trust in public institutions and promotes public understanding of the benefits and challenges of global economic and social change.
  • Topic: Development, Economics, International Trade and Finance, Non-Governmental Organization
  • Publication Date: 11-2002
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: The on-going structuring of the Greater Helsinki Region (GHR) should be encouraged by the central government. Managing the growth of the Helsinki region is crucial to avoid urban sprawl and the waste of resources, especially in the long run. With priorities for the Greater Helsinki Region identified, there is room to negotiate a general agreement between the central government and municipalities of the GHR. This agreement should receive large publicity and raise a debate in Parliament as the goal is to reassess both the role and the dependence of Helsinki upon the rest of the country, i.e. how can Finland develop as a whole by making better use of the motor, Helsinki.
  • Topic: Development, Economics, International Trade and Finance
  • Author: Derek Blades, David Roberts
  • Publication Date: 11-2002
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: Strictly speaking, the Gross Domestic Product (GDP) is only a measure of economic activity, but in practice it is often used to compare the relative wellbeing of countries as well as their overall economic performance. To measure the latter, users normally look at the rates of growth of GDP, while for comparing relative wellbeing the levels of GDP percapita are used. The absolute level of GDP is also used for calculating policy-relevant indicators such as the ratio of government deficit to GDP, the ratio of R expenditure to GDP and the ratio of carbon dioxide emissions to GDP.
  • Topic: Economics, International Organization
  • Political Geography: Russia
  • Author: Andreas Schleicher, Claudia Tamassia
  • Publication Date: 06-2002
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: How well do school systems perform in providing young people with a solid foundation of knowledge and skills, and in preparing them for life and learning beyond school? International comparisons of the outcomes of education systems have in the past been elusive. While it has been possible to compare basic structural characteristics of educational programmes and qualifications across countries, such as their entry requirements, their labour-market destination or typical patterns of student participation (see OECD, 1999b), there are no agreed standards that would allow to compare the level of content and quality of the underlying educational activities and services. It is thus difficult to make inferences regarding the knowledge and skills individuals have actually attained from such comparisons. Moreover, knowledge and skills are acquired not just through formal education but also, and increasingly, through formal and informal learning outside regular educational programmes. However, since 1997 governments of the OECD have been working on establishing a comparative framework to assess how well their education systems meet core objectives. The result has been the OECD Programme for International Student Assessment (PISA), the most comprehensive and rigorous international effort to date to assess learning outcomes and to identify the policy levers that may help improving the performance of education systems.
  • Topic: Economics, Political Economy
  • Author: Paul Schreyer, Francette Koechlin
  • Publication Date: 03-2002
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: How does one compare economic data between countries that is expressed in units of national currency? And in particular, how should measures of production and Gross Domestic Product (GDP) be converted into a common unit? One answer to this question is to use market exchange rates. While straightforward, this turns out to be an unsatisfactory solution for many purposes – primarily because exchange rates reflect so many more influences than the direct price comparisons that are required to make volume comparisons. Purchasing Power Parities (PPPs) provide such a price comparison and this is the rationale for the work of the OECD and other international organisations in this field (see chart 1). The OECD publishes new sets of benchmark PPPs every three years, drawing on detailed international price comparisons. Every time a new set of benchmark PPPs is released, this also gives rise to a new set of international comparisons of levels of GDP and economic welfare.
  • Topic: Economics, Political Economy
  • Author: Paul Schreyer
  • Publication Date: 02-2002
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: A major event in early 2002 was the arrival of the euro banknotes and coins and the withdrawal of the existing twelve national currencies from circulation. The event has influenced every citizen in the euro area and is clearly a historic change. It heralds a new phase in forging an “ever closer union among the peoples of Europe”. In economic terms, however, the introduction in January 1999 of the single currency after determining the irrevocably fixed exchange rates of the national currencies with the euro was a more important event. It meant that decisions on monetary policy moved from national central banks to the Governing Council of the European Central Bank. This Statistics Brief highlights some of the consequences for economic statistics of the creation of the euro area.
  • Topic: Economics, Political Economy
  • Political Geography: Europe
  • Author: Andreas Lindner, Bill Cave, Lydia Deloumeaux, Joscelyn Magdeleine
  • Publication Date: 10-2001
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: International trade statistics play a vital part in OECD's monitoring, analysis and projections of macroeconomic developments in individual economies and the world economy. In response to these needs, OECD's Secretariat manages three trade in goods and services databases of which a very large merchandise trade database.
  • Topic: Economics, Political Economy
  • Publication Date: 12-1999
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: In its sixth year of expansion, the Dutch economy has continued to perform well, with strong real GDP growth and job creation. But some tensions have appeared, and inflation is close to the upper limit of price stability as defined by the European Central Bank. The outlook is broadly favourable as GDP growth is expected to slow only moderately: this would provide a welcome cooling-off of the economy. However, fiscal policy needs to remain particularly vigilant concerning the risk of overheating, and stand ready to tighten promptly, within the budgetary framework, if so needed. A major challenge facing the authorities is to deal with the important unfinished agenda in the structural area through speeding up the process of structural reform. The announced income tax reform is particularly necessary, not only to improve fiscal efficiency and equity, but also to redress incentives to work. This would enhance labour market policies aimed at increasing the outflow from social security schemes, and would boost the active labour force and potential output. Other necessary actions include reforming the health care system and introducing more market forces in public transport and some other former public utilities. Taking advantage of the favourable conjunctural situation, the authorities should move ahead forcefully along all these lines, thereby contributing to the continuation of strong job creation in an environment of sustainable economic growth.
  • Topic: Economics
  • Political Geography: Europe, Netherlands
  • Publication Date: 12-1999
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: The economic crisis of 1998 has victimised a number of important areas of institutional development and increased social distress among much of the population. A responsible fiscal and monetary response to the crisis, bolstered by a strengthened current account, has helped to stabilise inflation and the exchange rate, although the low level of reserves, the demands of foreign debt service, and threats to the independence of the Central Bank speak for the continued fragility of the achieved level of stability. A restructuring of foreign debt is critical for consolidating trends in the fiscal sphere. While the quick onset of a recovery in GDP in the wake of the weaker rouble is encouraging, delays in structural reforms and low administered input prices raise concern about the quality and sustainability of this growth. The restructuring and regulation of the commercial banking sector continues to pose major challenges to the Central Bank and the Russian government. Throughout a decade of transition, problems in demonetisation and fiscal federalist relations, the particular focus of this Survey, have been important underlying structural obstacles to economic reform. Although some institutional reforms have provided a foundation for a market economy, delays in addressing these and other fundamental problems have impeded efficiency and increased the comparative vulnerability of the Russian economy to external shocks. The future stability and growth of the Russian economy will require the continuation of responsible macroeconomic policies, but depends first and foremost on progress in structural reform, including tax reform, effective institutions of bankruptcy, competition, more decisive and comprehensive measures to combat the process of demonetisation, defend the rule of law, and realise fundamental reform in fiscal federalist relations.
  • Topic: Economics, International Political Economy
  • Political Geography: Russia
  • Publication Date: 12-1999
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: The euro came into being under mixed auspices. On the one hand, convergence efforts in the run-up to monetary union, particularly in the fiscal area, had helped bring inflation and interest rates down to historically low levels. On the other hand, growth, which had only just started to recover in earnest after several disappointing years, was slowing down in the wake of a series of emerging market crises. The macroeconomic policy mix prevailing in 1999 combined monetary easing and modest fiscal consolidation. It contributed to sustain domestic demand, limiting the extent of the deceleration. With a brightening external environment, growth picked up vigorously in the second half of the year. In hindsight, the new regime's début is commendable, especially when recalling the gloomy predictions of some sceptics and taking into account that this first year has been a period of learning-by-doing for all agents. Major challenges lie ahead, however, both as regards long-run fiscal sustainability in the face of population ageing and as regards market structures. The policy tradeoffs facing European policymakers are harsher in some important ways than those confronting their counterparts across the Atlantic, because of deeply ingrained labour and product market rigidities. Those are being addressed in various ways, and tangible progress is being made. Nonetheless, reform efforts should be stepped up to raise economic performance significantly above the record of the 1990s.
  • Topic: Economics
  • Political Geography: Europe
  • Publication Date: 12-1999
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: Globalisation has become a key force of change in all OECD countries. It is making our economies more open, bringing new opportunities, new markets and new wealth. But it also demands more rapid adjustment to change. The accomplishment of strategic restructuring is often required, so that workers are not displaced or excluded from the labour market and so that no localities are left to lag behind or decline. In the new economic environment, policy-makers must help build dynamic and flexible regions and cities. They must assist the transition from individual closed local economic systems to a new, open global system. To do this, it is important to “think globally and act locally”.
  • Topic: Development, Economics, Globalization, Government
  • Publication Date: 12-1999
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: The new government has set itself the ambitious tasks of lowering unemployment, modernising the economy and the social system, and securing the long term viability of the budget and the health and pension systems. Ecological goals have been given equal prominence in order to ensure the environmental sustainability of economic development. In some fields there has been progress. However, the fiscal package needs to be fully implemented to put public finances on a sustainable path and to create a tax regime that is more business friendly. These policies should be underpinned by structural reforms that strengthen future growth prospects. Such policies can benefit both macroeconomic performance and future fiscal outcomes. While short-term growth prospects are already improving, unemployment remains a major problem. With respect to its strategy for reducing unemployment, the government is seeking to obtain consensus, inter-alia on an employmentfriendly wage policy, via round-table talks with the social partners. It is important that a consistent set of policy instruments emerge that establish clear links between policies and ultimate policy goals. For Germany to attain the employment, growth and environmental aims commensurate with its key position in the European economy, requires not only favourable macroeconomic conditions, including aggregate wage developments, but a policy emphasis which more effectively enhances labour-market flexibility, as well as structural reforms that strengthen individual initiative, economic choice and the role of competition. Since structural and macroeconomic policies tend to have synergies which make them mutually reinforcing, achieving a more flexible and dynamic use of resources will help to assure progress towards the country's social, budgetary, environmental and economic goals.
  • Topic: Economics
  • Political Geography: Europe, Germany
  • Publication Date: 12-1999
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: The Icelandic economy has expanded rapidly over the past five years, bringing output to well above its potential. Clear signs of overheating have emerged, with unemployment below 2 per cent, inflation picking up and a large current external deficit. These developments are projected to continue, raising the risks of a wage-price spiral and financial instability. To guard against such risks, a significant tightening of monetary policy is required, with less priority attached to the exchange rate as a target for policy. This should be complemented by a medium-term fiscal discipline aiming at achieving a structural budget surplus. Such a course would help cope with long-term care spending that will rise with ageing. On the other hand, except for government employees, pensions should not constitute a burden for public finances, as, for the main, they will be provided by the private sector. To enhance future growth prospects, it will be important to maintain and extend the fishing quota regime in the face of legal threats and to increase competitive forces, especially in the telecommunications industry.
  • Topic: Economics
  • Political Geography: Europe, Iceland
  • Publication Date: 10-1999
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: The collapse of communism in Central and Eastern Europe and the subsequent disintegration of the Soviet Union brought the region's serious environmental problems to the attention of the international community. Although the countries in this vast area of the world are remarkably diverse, central economic planning had created a common pattern of environmental problems. Notable among these problems were levels of industrial pollution that, in many places, threatened human health; widespread land and water degradation (particularly in the former Soviet Union); and the persistent neglect of nuclear safety and nuclear waste management.
  • Topic: Economics, Emerging Markets, Environment
  • Political Geography: Eastern Europe, Soviet Union
  • Publication Date: 10-1999
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: Never before have so many countries at such different levels of development been involved in so much activity aimed at progressively rolling back obstacles to freer trade and investment. Yet, paradoxically, at no time during the post-war period has the prospect of further liberalisation generated so much public anxiety, not least within those countries that built much of their prosperity on a liberal trade and investment order.
  • Topic: Economics, Environment, Government, International Trade and Finance, Sovereignty
  • Publication Date: 07-1999
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: The goal of a large number of criminal acts is to generate a profit for the individual or group that carries out the act. Money laundering is the processing of these criminal proceeds to disguise their illegal origin. This process is of critical importance, as it enables the criminal to enjoy these profits without jeopardising their source.
  • Topic: Security, Economics, International Trade and Finance
  • Publication Date: 06-1999
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: Twice a year, in June and December, the OECD publishes its Economic Outlook (EO), which contains projections for a number of key economic variables over a two to two and a half-year horizon.
  • Topic: Economics, International Trade and Finance
  • Publication Date: 06-1998
  • Content Type: Policy Brief
  • Institution: The Organisation for Economic Co-operation and Development
  • Abstract: Population ageing in OECD countries over the coming decades could threaten future growth in prosperity. Governments should take action now across a broad range of economic, financial and social policies to ensure the foundations for maintaining prosperity in an ageing society. While reforms are already underway, much deeper reforms will be needed to meet the challenges of population ageing.
  • Topic: Economics, Government, International Trade and Finance