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1. Counter-Cyclical Economic Policy

Author:
The Organization for Economic Co-operation and Development
Publication Date:
05-2010
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
The effects of the recent economic crisis have stretched policy frameworks in many OECD countries close to breaking point. Recent work by the OECD has examined how policies have interacted with the economic cycle over time and during the recent crisis. The main policy lessons are as follows: • Policy-makers should take into account uncertainties about the functioning of the economy, the nature of economic shocks or the effects of policy and take their decisions accordingly. • Policy in various areas will have to build in greater safety margins and to be more prudent during upswings. • Appropriate fiscal rules can help prepare fiscal policy for the next downturn by leading to swifter consolidation during the upturn. • The monetary and financial policy framework needs to achieve a better articulation between economic and financial stability. • Financial policy needs to strengthen micro-prudential regulation, regulatory interventions may need to target emerging credit-driven bubbles and macro-prudential policies should address systemic risks. • There may be a case for monetary policy leaning against the wind, if asset prices are driven by a credit boom and financial regulation is judged to be insufficiently robust. • Changes to structural policy settings can improve the resilience of the economy to shocks and affect the degree of leverage households and firms take on.
Topic:
Economics, Fiscal Policy, Economic Stability, and Economic Crisis
Political Geography:
Global Focus

2. Pension Reform in China

Author:
Felix Salditt, Peter Whiteford, and Willem Adema
Publication Date:
06-2007
Content Type:
Working Paper
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
China is currently in the process of developing the largest pension system in the world, and it is doing this at a time of unparalleled economic and demographic transition. The central government has followed a step-by-step approach to develop a system that can accommodate a rapidly aging society within a rapidly growing, but still largely underdeveloped economy. This paper analyses how far the process of creating a national old age insurance system had proceeded by the end of 2006. It provides a detailed description of this system and an assessment of to what degree it has so far achieved ?its primary goal of social security for more people?
Topic:
Economics, Reform, Welfare, and Pension
Political Geography:
China and Asia

3. Toward a More Efficient Taxation System in New Zealand

Author:
Annabelle Mourougane
Publication Date:
06-2007
Content Type:
Working Paper
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
After the radical reforms undertaken in the 1980s, the NZ tax system has long been regarded as one of most efficient within the OECD, and is based on a comprehensive income approach. Looking forward, the country will require a tax regime that helps the economy to continue raising living standards, supports savings and investment and copes with emerging pressures such as increasing geographic mobility of labour and capital. In this context, it will be important to have in place a clear long-term direction for the tax system to guide reforms. There are at least two broad options that are worth considering: adapting the system within a comprehensive income approach or adopting a dual income tax system. Future changes to the tax system need to be consistent with the approach ultimately adopted. In any case, a number of limitations of current tax bases will need to be tackled.
Topic:
Economics, Tax Systems, Collaborative Efficiency, and Investment
Political Geography:
New Zealand and Oceania

4. Why has Swedish Inflation been Persistently Low?

Author:
Felix Hufner
Publication Date:
06-2007
Content Type:
Working Paper
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
Average inflation in Sweden has been one of the lowest among European countries since the mid- 1990s. Three supply-side factors help to explain this phenomenon, all related in some sense to increased global integration. First, a shift towards imports from low-cost producing countries has resulted in falling import prices. Second, deregulation and increased product market competition with foreign companies entering the market has led to price falls in some sectors, notably in retailing. Third, wage growth has lagged productivity and kept unit labour costs down. This paper reviews these factors and analyzes the policy options for the central bank.
Topic:
Economics, Labor Issues, Monetary Policy, and Inflation
Political Geography:
Europe, Sweden, and Scandinavia

5. Economic Survey of Hungary, 2007

Publication Date:
05-2007
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
Budget consolidation is dominating the political agenda. The Hungarian government has embarked on an ambitious four-year consolidation programme following another election-year peak in the deficit in 2006 at 9.2% of GDP. The immediate revenue increases and spending cuts are temporarily damping growth. However, if all goes according to plan, the programme will bring dividends to the economy in the longer term. This payoff is crucially dependent on: Discipline in budgetary processes. Work needs to continue on strengthening budgetary mechanisms. A system of binding medium-term spending limits should be considered. Budgetary reform also needs to extend to the sub-national governments. Success in maintaining spending freezes. The re-scheduling that brought forward part of the 13th month payment to public-sector workers this year does not affect achievement of the 2007 fiscal target in accrual terms. Nevertheless, looking forward, strong resistance to spending pressures arising from revenue windfalls is of key importance. Implementation of the structural reform programme. The healthcare reforms that are expected to deliver a large share of fiscal savings are reasonably well advanced and a welcome cut in gas-price subsidies is already reducing government spending. The reforms in education are positive but the changes to the tuition–fee system in particular should go further. It is more uncertain, however, whether all the planned cuts in government administration will be realised. Successful reform of public spending requires the participation of the counties and municipal governments. There are potential savings in administrative overheads here too and sub-national governments are responsible for providing many government services. In-depth review of these issues in this Survey reveals a need to: Capture economies of scale. Political constraints preclude widespread mergers among the large number of small municipalities. However, the joint provision of services is widespread and should be encouraged further. Efforts to rationalise through replacement of county-level governments with regional assemblies should continue. Reform financing systems. The financing of sub-national government needs simplification and greater transparency and oversight in accounts. Also, the benchmarking of services via output and performance indicators needs to become more widespread. Reform of local taxation should include widening of property tax and removal of the local business tax. Hungary's low employment rate remains a key structural handicap to economic performance. There has been welcome reform of unemployment benefits and early-retirement pensions. Planned reforms to disability pensions look promising and a concrete proposal for old-age pension reform is in the pipeline. This Survey looks in depth at the issue of prolonged parental leave and other aspects of family policy: Current efforts to boost childcare services are welcome. Future reform needs to consider further strengthening of central-government provision requirements on municipalities regarding these services, matched by appropriate funding. A system of childcare vouchers for parents would be one way of increasing efficiency in the provision of services. Reform to the very long parental leaves should be considered, along with changes to the attendant system of additional cash benefits. Savings could be used to help fund increased childcare services.
Topic:
Development, Economics, and Government
Political Geography:
Europe

6. Competitive Regional Clusters: National Policy Approaches

Publication Date:
05-2007
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
Nations and regions are struggling to remain competitive and adapt in the context of globalisation. The regional specialisations built up over decades are transforming rapidly. Many regions that were historically production centres are losing out to lower-cost locations and are reorienting their activities to higher value-added non-manufacturing industries or R manufacturing niches. Yet, given that even some of these upstream activities have begun to be off-shored to lower-cost OECD and non-OECD countries, the question for policy is how durable are the competitive strengths on which regional economies are based.
Topic:
Development, Economics, International Trade and Finance, and Nationalism

7. Economic Survey of the United States, 2007

Publication Date:
05-2007
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
Despite a sharp housing market correction, overall growth has been holding up fairly well. Strong foreign demand and a decline in import growth have slowed the rise in the external deficit. With activity near capacity limits, some inflationary pressures have emerged. Reining them in without stifling growth is the main challenge for monetary policy. Looking further ahead, the key challenges are to sustain healthy growth and ensure fiscal sustainability in the face of population ageing. Against this backdrop, the Survey focuses on the following issues: Enhancing the economy's growth potential. Trend growth is slowing because labour productivity gains, though remaining high, no longer suffice to compensate for the deceleration in potential employment due mainly to demographic factors. Prospects for productivity growth appear favourable, but further efficiency gains could be achieved by tackling unfinished business in the area of structural reform. Labour supply could be boosted by increasing work incentives for the disabled, raising the earned income tax credit and delaying retirement eligibility.
Topic:
Development, Economics, and Markets
Political Geography:
United States

8. Economic Survey of Greece, 2007

Publication Date:
05-2007
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
Growth performance over the last decade has been among the best in the OECD, though a precise calibration is not yet possible following the recent revisions to GDP data. High growth has been driven by a range of factors, some of which are transitory. It is particularly encouraging that growth has been sustained over the last two years, despite substantial fiscal consolidation, mainly being driven by investment and exports. However, significant further reforms are needed to ensure that good performance is sustained in the years to come. It is imperative to use this period of strong performance to tackle remaining weaknesses in product and labour markets and move fiscal policy further towards a sustainable position by vigorous continued consolidation and pension reform. The key challenge, in terms of political economy, is to manage the required reforms in a context where society may be unduly complacent because the “good times” appear to be continuing.
Topic:
Development, Economics, and International Trade and Finance
Political Geography:
Europe and Greece

9. Economic Survey of Italy, 2007

Publication Date:
06-2007
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
A welcome economic recovery is under way in Italy. In part, this reflects the cyclical upswing in the rest of Europe, but there are also early signs of a more fundamental improvement, notably in terms of export and labour market performance. Even so, medium-term prospects remain challenging: Total factor productivity shows little signs of resurgence, high public indebtedness threatens fiscal sustainability and population ageing looms large. Without further reforms to restore economic dynamism, living standards will be dragged down relative to other countries. This Survey discusses policies undertaken by the government to address these challenges, notably to boost competition on product markets, achieve fiscal sustainability and make fiscal federalism work – all in support of growth and adjustment.
Topic:
Development, Economics, and International Trade and Finance
Political Geography:
Europe and Italy

10. Prosecuting Cartels without Direct Evidence of Agreement

Publication Date:
06-2007
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
Cartels are agreements among competitors fixing prices, allocating markets or rigging tenders (bids). They are the most harmful of all types of competition law violations and should be sanctioned severely. Cartel cases are unique. The most important part of a cartel case is simply proving that such an agreement existed. But getting direct evidence of a cartel agreement can be difficult. Cartel operators work in secret and often do not co-operate with investigators. In these circumstances, circumstantial evidence can play an important role in proving the agreement.
Topic:
Economics, Markets, and Treaties and Agreements

11. Competition Policy and Concessions

Publication Date:
06-2007
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
Governments have long been engaged in providing goods or services to their citizens that could, in some form, be provided by the private sector. The trend over the past few decades, however, has been to transfer these functions, and the state-owned assets used to provide them, to private hands. The most common method, and the one usually preferred, is privatisation, or outright sale or transfer of ownership of the relevant assets to one or more private parties. A second, however, is concessions.
Topic:
Development, Economics, Government, and Markets

12. Competition Law and Policy in Sweden

Publication Date:
06-2007
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
Sweden's 1993 Competition Act (CA) remains the foundation of a broad policy approach that includes prohibitions against restrictive agreements and abuse of dominance, control of concentrations, advocacy and support for academic research. Enforcement of this legislation by the Swedish Competition Authority (SCA) marked a shift towards a judicial, rules-based approach.
Topic:
Development, Economics, and Government
Political Geography:
Europe and Sweden

13. Economic Survey of Slovak Republic, 2007

Publication Date:
04-2007
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
Following major economic reforms, the Slovak economy has grown strongly in recent years, driven by rapid productivity growth, but still has far to go to catch up to the per capita income levels in the advanced European countries. The incoming government has made achieving a more equal distribution of income a priority insofar as this can be done without damaging long-term growth prospects. There is considerable scope both to strengthen growth prospects and to reduce income inequality by raising employment rates, improving education outcomes (including by reducing the impact of socio-economic background), and by removing barriers to product-market competition. The new government has also reiterated its commitment to Slovakia's entry into the euro area in January 2009 and has taken steps to make it probable that Slovakia will satisfy the Maastricht criteria for entry on a sustainable basis. Policies may need to be adapted to support macroeconomic stability in the currency union.
Topic:
Development, Economics, and Poverty
Political Geography:
Europe, Eastern Europe, and Slovakia

14. Economic Survey of New Zealand, 2007

Publication Date:
04-2007
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
New Zealand has undertaken wide-ranging reforms over the past 20 years and now has one of the most flexible and resilient economies in the OECD. However, a large external deficit, very low household saving and still-strong inflation pressures indicate an unbalanced growth pattern. There are some signs that these imbalances are starting to unwind, but the short-term outlook remains uncertain. On current settings, it will take time for inflation pressures to dissipate and, notwithstanding a large fiscal surplus, strong growth in government spending is complicating the stabilisation task of the Reserve Bank. Moreover, additional fiscal stimulus beyond present plans – whether from spending increases or tax reductions – would delay internal and external rebalancing and exacerbate the adjustment required to ensure fiscal sustainability in the longer term.
Topic:
Development, Economics, and Markets
Political Geography:
Australia/Pacific and New Zealand

15. Fostering Regional Integration: Peer Review in Southeast Asia

Publication Date:
05-2007
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
The Southeast Asian region has shown remarkable economic dynamism. Economic growth has been robust, and trade and investment flows have been soaring as a result of increasing international division of labour.
Topic:
Development, Economics, and International Trade and Finance
Political Geography:
Southeast Asia

16. Sweden: Achieving Results for Sustained Growth

Publication Date:
03-2007
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
Regulatory reform contributes to promoting sustained economic growth, complementing sound macro-economic policies. While Sweden has made significant progress on regulatory reform since the early 1990s and enjoyed major productivity gains as a result, it should instil more competition in the public sector, cut red tape and liberalise labour markets if it is to meet the challenge of an ageing population and maintain its high standards of social welfare.
Topic:
Development, Economics, and Markets
Political Geography:
Europe and Sweden

17. Korea: Progress in Implementing Regulatory Reform

Publication Date:
03-2007
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
Regulatory reform is a priority in the effort to promote sustainable economic growth, complementing sound macroeconomic policies. It can help shift economic activity to higher value-added production and services, encourage the use of appropriate and new technology and make national economies more resilient to economic shocks. Regulatory reform is a very important asset as countries move forward in the process of globalisation.
Topic:
Development, Economics, Globalization, and Science and Technology
Political Geography:
Korea

18. Economic Survey of Belgium, 2007

Publication Date:
03-2007
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
The Belgian economy is in a strong recovery phase. The balancing of the budget since the start of the decade has allowed public debt to fall fast relative to GDP, providing a favourable macroeconomic background for the recovery. Moreover, structural reforms, particularly in the labour market, are showing signs of success. Output has accelerated and was by mid-2006 growing at 3% – the fastest pace since 2000. With growth well above potential, some production factors are already under strain. The challenge will be to persist with stability and reform-oriented policies to bolster the economy's trend growth, a challenge made more acute by the impending ageing of the population.
Topic:
Development, Economics, and Markets
Political Geography:
Europe and Belgium

19. OECD Territorial Reviews: Randstad Holland, Netherlands

Publication Date:
03-2007
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
The Randstad is the poly-centric urban area in western Netherlands, comprising Amsterdam, Rotterdam, The Hague, Utrecht, and several smaller cities. It is one of the most densely populated areas in the OECD, which has developed into an advanced urban economy with many leading sectors, such as logistics, horticulture and financial services. The Randstad has one of the lowest unemployment rates in all OECD countries and is one of the most attractive metropolitan areas for foreign direct investment.
Topic:
Civil Society, Development, and Economics
Political Geography:
Europe, Netherlands, Rotterdam, and Amsterdam

20. Assessing Environmental Policies

Publication Date:
03-2007
Content Type:
Policy Brief
Institution:
The Organisation for Economic Co-operation and Development
Abstract:
Are policies to protect the environment giving value for money – and how can we know? Recognising that policy decisions should be based on a comparison of costs and benefits, a number of OECD governments have introduced legal provisions requiring a cost-benefit analysis (CBA) of new environmental regulations or measures.
Topic:
International Relations, Economics, Environment, and Government