TheOrganisation for Economic Co-operation and Development (OECD;French:Organisation de coopération et de développement économiques,OCDE) is anintergovernmental organization with 38 member countries,[1][4] founded in 1961 to stimulate economic progress andworld trade. It is aforum whose member countries describe themselves as committed todemocracy and themarket economy, providing a platform to compare policy experiences, seek answers to common problems, identify good practices, and coordinate domestic and international policies of its members.
The OECD's headquarters are at theChâteau de la Muette inParis, France, which housed its predecessor organization, the Organization for European Economic Co-operation.[13] The OECD is funded by contributions from member countries at varying rates and is recognised as a highly influential publisher of mostly economic data through publications as well as annual evaluations and rankings of member countries.[14]
The OECD is the successor organization to the Organisation for European Economic Co-operation (OEEC),[15]established in April 1948 among the European recipients ofMarshall Plan aid for the reconstruction of Europe afterWorld War II.[16][17][18] Only Western European states were members of the OEEC, whose primary function was the allocation of American aid. Its Secretaries-General[19] were the FrenchmenRobert Marjolin (1948–1955) and René Sergent (1955–1960). It was headquartered in theChâteau de la Muette in Paris.
Following the end of Marshall aid in 1952, the OEEC focused on economic issues.[15] Its coordinating role was challenged after the 1957Rome Treaties establishing theEuropean Economic Community andEuratom. The OEEC provided a framework for negotiations aimed at setting up aEuropean Free Trade Area, to bring the EEC'sInner Six and other OEEC members together on a multilateral basis. In 1958, aEuropean Nuclear Energy Agency was set up in response to Euratom.
By this time, some leading countries felt that the OEEC had outlived its purpose but could be adapted to fulfil a more global mission, which proved to be a cumbersome task. Following several (occasionally unruly) meetings at theHotel Majestic in Paris, which began in January 1960, a resolution was reached to create a body that would not only solve European and Atlantic economic issues, but also devise policies that could assist less developed countries. This reconstituted organisation would bring the US and Canada, who were already OEEC observers, on board as full members, and the OEEC would set to work straight away on convincingJapan to join the organisation.[20][21][22]
TheConvention on the Organisation for Economic Co-operation and Development was signed on 14 December 1960, and the OECD officially superseded the OEEC in September 1961, consisting of the European founder countries of the OEEC, with the additions of the United States and Canada. Three countries, (Netherlands, Luxembourg, and Italy)—all OEEC members—ratified the OECD Convention after September 1961, but are nevertheless considered founding members. The official founding members are the following:
The aims of the OECD are stated in Article 1 of the Convention[24] as:
to achieve the highest sustainable economic growth and employment and a rising standard of living in Member countries, while maintaining financial stability
to contribute to sound economic expansion in Member as well as non-member countries
to contribute to the expansion of world trade
Unlike the United Nations' "Organizations," OECD uses the spelling "Organisation" with an "s" in its name, together with a hyphenated "Co-operation".
Following theRevolutions of 1989, the OECD began assisting countries in Central Europe (especially theVisegrád Group) to prepare market economy reforms. In 1990, the Centre for Co-operation with European Economies in Transition (now succeeded by the Centre for Cooperation with Non-Members) was established, and in 1991, the programme, "Partners in Transition", was launched to offer a partnership toCzechoslovakia, Hungary and Poland,[25] including a membership option for these countries.[25] As a result of this,Poland,[26]Hungary, theCzech Republic andSlovakia, as well asSouth Korea[27] andMexico, became members of the OECD between 1996 and 2000.
East Germany joined on 3 October 1990 throughreunification with West Germany. In the 1990s, several European countries, now members of the European Union, expressed their willingness to join the Organisation. In 1995,Cyprus applied for membership, but according to the Cypriot government, it was vetoed byTurkey.[28] In 1996,Estonia,Latvia, andLithuania signed a Joint Declaration expressing willingness to become members of the OECD,[29] andSlovenia also applied for membership that same year.[30] In 2005,Malta applied to join the Organisation.[31] The EU is lobbying for the admission of allEU member states.[32]Romania reaffirmed in 2012 its intention to become a member of the Organisation through the letter addressed by Romanian Prime MinisterVictor Ponta to OECD Secretary-GeneralJosé Ángel Gurría.[33] In September 2012, the government ofBulgaria confirmed it would apply for membership before the OECD Secretariat.[34]
The OECD established a working group headed by ambassador Seiichiro Noboru to work out a plan for the enlargement with non-members. The working group defined four criteria that must be fulfilled: "like-mindedness", "significant player", "mutual benefit" and "global considerations." The working group's recommendations were presented at the OECD Ministerial Council Meeting on 13 May 2004, and on 16 May 2007, the OECD Ministerial Council decided to open accession discussions withChile,Estonia,Israel,Russia, andSlovenia, and to strengthen cooperation withBrazil,China,India,Indonesia, andSouth Africa through a process of enhanced engagement.[35] Chile, Slovenia, Israel, and Estonia all became members in 2010.[36] In March 2014, the OECD halted membership talks with Russia in response to its role in the2014 Annexation of Crimea.[37][38]
In 2013, the OECD decided to open membership talks withColombia andLatvia. In 2015, the Organisation opened talks withCosta Rica andLithuania.[39] Latvia became a member on 1 July 2016, and Lithuania soon followed on 5 July 2018.[40][41] Colombia signed the accession agreement on 30 May 2018 and became a member on 28 April 2020.[42] On 15 May 2020, the OECD decided to extend a formal invitation for Costa Rica to join the OECD,[43] which joined as a member on 25 May 2021.[2]
In June 2022, during the annual OECD Ministerial Council Meeting, the Roadmaps for the Accession to the OECD Convention forBrazil,Bulgaria,Croatia,Peru andRomania were adopted.[50] In March 2024, the Roadmaps for the Accession to the OECD were adopted withArgentina[51] andIndonesia,[52] and in July 2024, also withThailand.[53]
The OECD sets the rules governinginternational taxation for multinationals through the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations, a Model Tax Convention and country-by-country reporting rules.
The OECD publishes and updates a model tax convention that serves as a template for allocating taxation rights between countries. This model is accompanied by a set of commentaries that reflect OECD-level interpretation of the content of the model convention provisions. In general, this model allocates the primary right to tax to the country from which capital investment originates (i.e., the home, or resident country) rather than the country in which the investment is made (the host, or source country). As a result, it is most effective between two countries with reciprocal investment flows (such as among the OECD member countries), but can be unbalanced when one of the signatory countries is economically weaker than the other (such as between OECD and non-OECD pairings). Additionally, the OECD has published and updated the Transfer Pricing Guidelines since 1995. The Transfer Pricing Guidelines serve as a template for the profit allocation of inter-company transactions to countries. The latest version, of July 2017, incorporates the approved Actions developed under theBase Erosion and Profit Shifting (BEPS) project initiated by the G20.[citation needed]
Pillar 1
An OECD proposal to allocate multinational profits (for taxing purposes) to countries where they do business, by a formula, including to markets which multinationals sell into without a physical presence. This is hoped to eliminate the need forDigital Services Tax implemented by several countries, including France. There are exclusions and minimum thresholds, including banking and extractive industries. The proposal involves allocating only residual profit (i.e., profits above what is established through transfer pricing, thus creating a hybrid mechanism). This is essentially no change to what is currently allowed (routine profits allocated using transfer pricing + residual profits allocated through profit split).
Pillar 2
On 1 July 2021, finance officials from 130 countries agreed on plans for a new international taxation policy known as theglobal minimum corporate tax (of 15%). If a country taxes a multinational at a lower rate, the multinational's HQ will receive the difference.
It is not certain when the proposals will be implemented.
All the major economies agreed to pass national laws that would require corporations to pay at least 15% income tax in the countries they operate. This new policy would end the practice of locating world headquarters in small countries with very low taxation rates. Governments hope to recoup some of the lost revenue, estimated at $100 billion to $240 billion each year. The new system was promoted by theBiden Administration in the United States and the OECD. Secretary-GeneralMathias Cormann of the OECD said, "This historic package will ensure that large multinational companies pay their fair share of tax everywhere."[54]
TheOECD Guidelines for Multinational Enterprises are a set of legally non-binding guidelines attached as an annex to the OECD Declaration on International Investment and Multinational Enterprises. They are recommendations providing principles and standards for responsible business conduct formultinational corporations operating in or from countries adhering to the Declaration.[55]
The OECD publishes books, reports, statistics, working papers, and reference materials. All titles and databases published since 1998 can be accessed viaOECD iLibrary. The OECD Library & Archives collection dates from 1947, including records from theCommittee for European Economic Co-operation (CEEC) and the Organisation for European Economic Co-operation (OEEC), predecessors of today's OECD. External researchers can consult OECD publications and archival material on the OECD premises by appointment.[56]
Reports on a wide range of topics for sale at the OECD's Conference Centre Bookshop in 2019
The OECD releases about 600 books and over 400 papers yearly on topics spanning public policy. The publications are updated to the OECD iLibrary. Most books are published in English and French. The OECD flagship titles include:
TheOECD Economic Outlook, published twice a year. It contains forecast and analysis of the economic situation of the OECD member countries. The OECD exceptionally published the 2020 Economic Outlook on 10 June 2020 to adjust economic forecasts greatly impacted by theCoronavirus since the March Interim Economic Outlook. The June Economic Outlook assesses the economic impact of COVID-19 and provides projections for economic impact if a second outbreak were to occur.[57]
TheMain Economic Indicators, published monthly. It contains a large selection of timely statistical indicators.
TheOECD Factbook is published yearly and available online, as an iPhone app, and in print. The Factbook contains more than 100 economic, environmental and social indicators, each presented with a clear definition, tables, and graphs. The Factbook mainly focuses on the statistics of its member countries and sometimes other major additional countries. It is freely accessible online and delivers all the data inExcel format via StatLinks.
TheOECD Communications Outlook and the OECD Internet Economy Outlook (formerly the Information Technology Outlook), which rotate every year. They contain forecasts and analysis of the communications and information technology industries in OECD member countries and non-member economies.
In 2007 the OECD publishedHuman Capital: How what you know shapes your life, the first book in theOECD 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. The series was discontinued in 2017.[58]
All OECD books are available on the OECD iLibrary, the online bookshop or OECD Library & Archives.[56]
OECD Observer, an award-winning magazine,[n 1] was launched in 1962.[59] The magazine appeared six times a year until 2010, and became quarterly in 2011 with the introduction of theOECD Yearbook, launched for the 50th anniversary of the organisation.[60] The online and mobile[61] editions contained news, analysis, reviews, commentaries and data on global economic, social and environmental challenges and listings of the latest OECD books.[62] An OECD Observer Crossword was introduced in Q2 2013.[63] TheOECD Observer was last issued in the fourth quarter of 2019, with a double edition looking ahead at artificial intelligence, and a cover leading on why statistical offices should hire a comedian. The OECD Observer website closed in the first quarter of 2021; the archive can be consulted at www.oecd.org.
The OECD's multilateral surveillance was systematically reviewed for the first time in Kumiharu Shigehara, "Multilateral Surveillance: What the OECD can offer?"(the 1996 Global Finance Lecture, the University of Birmingham, 1996; OECD publication, Paris, 1996) at a time when Shigehara was OECD Chief Economist and Head of Economics Department (1992–1997); he was subsequently OECD Deputy Secretary-General (1997–1999).
It was also discussed in:
Kumiharu Shigehara, "Surveillance by International Institutions: Lessons from the Global Financial and Economic Crisis" (OECD Working Papers No.860, May 2011, co-authored with Paul Atkinson).[64]
Kumiharu Shigehara, "Multilateral Surveillance: the IMF, the OECD and G20" (Ligue Européenne de Coopération Économique, Paris, 2011)[65]
Kumiharu Shigehara, "The Limits of Surveillance and Financial Market Failure: Lessons from the Euro-Area Crisis" (Palgrave Macmillan 2014)[66]
The history of OECD multilateral surveillance from the 1960s to the end of the 1990s was also described in the memoirs titled "the Bank of Japan and the OECD: Recollections and Reflections", written in Japanese by Kumiharu Shigehara and published in December 2019. In his letter of 5 February 2019, Donald Johnston, OECD Secretary-General (1996–2006), noted that Shigehara's "book is very important for the OECD where there is little living institutional memory". The English edition of Shigehara's memoirs titledThe Bank of Japan, the OECD, and Beyond was published by Palgrave Macmillan in September 2024.[67]
The OECD is known as astatistical agency, as it publishes comparable statistics on numerous subjects. In July 2014, the OECD publicly released its mainstatistical databases through the OECD Data Portal, an online platform that allows visitors to create custom charts based on official OECD indicators.[68][69]
OECD statistics are available in several forms:
as interactive charts on the OECD Data Portal,
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 aURL that links to the underlying data).
In July 2024, the OECD announced that it "has transitioned to [an] open-access information model" and that Creative CommonsCC‑BY‑4.0 attribution licenses will be used on all data and publications.[70]
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.
It published theOECD Environmental Outlook to 2030 in March 2008, which argues that tackling key environmental problems—includingclimate change,biodiversity loss,water scarcity, and the health impacts ofpollution—is both achievable and affordable.[72]
The OECD's structure consists of three main elements:[76]
The OECDmember countries, each represented by a delegation led by an ambassador. Together, they form the OECD Council. Member countries act collectively through the council (and its standing committees) to provide direction and guidance to the work of the organisation.
The OECD substantivecommittees, one for each work area of the OECD, plus their various 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 OECDSecretariat, led by the Secretary-General (currentlyMathias Cormann), provides support to standing and substantive committees. It is organised into directorates, which include about2,500 staff.
The main entrance to the OECD Conference Centre in Paris
Delegates from the member countries attend committee and other meetings. FormerDeputy Secretary-GeneralPierre Vinde [sv] 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.[77] This ratio is unique among inter-governmental organisations.[citation needed] In other words, the OECD is more a persistent forum or network of officials and experts than an administration.
The OECD regularly holds minister-level meetings and forums as platforms for a discussion on a broad spectrum of thematic issues relevant to the OECD charter, member countries, and non-member countries.[78]
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. Held every year since June 2000, the OECD Forum takes the form of conferences and discussions, is open to public participation and is held in conjunction with the MCM.
Thematic Ministerial Meetings, held among ministers of a given domain (i.e., all Ministers of Labour, all Ministers of Environment, etc.).
The bi-annual World Forum on Statistics, Knowledge and Policies, which does not usually take place in the OECD. This series of meetings has the ambition to measure and foster progress in societies.
OECD Eurasia Week, which includes several high-level policy dialogue discussions to share best practices and experiences in addressing common development and economic challenges in Eurasia.[79]
The exterior of the Château de la Muette and the grounds of the OECD Conference Centre
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 head of the OECD Secretariat and chair of the OECD Council is the Secretary-General. Secretary-General selections are made byconsensus, meaning all member states must agree on a candidate.[81]
Representatives of member and observer countries meet in specialised committees on specific policy areas, such as economics, trade, science, employment, education, development assistance or financial markets. There are about 200 committees, working groups and expert groups. Committees discuss policies and review progress in the given policy area.[88]
OECD decisions are made through voting, which requires unanimity among all of those voting. Each member country has one vote.[24] However, dissenting members which do not wish to block a decision but merely to signal their disapproval can abstain from voting.[90] 22 of the OECD member countries are also EU member states.[91]
TheFree Territory of Trieste (Zone A) was a member of the OEEC until 1954, when it merged withItaly and ceased to exist as an independent territorial entity.[15]
In May 2007, the OECD decided to open accession negotiations with Russia.[35] In March 2014, the OECD halted membership talks in response to Russia's role in that year'sCrimean Annexation and continuous human and civil rights abuses.[37][38] On 25 February 2022, the OECD terminated the accession process with Russia after itinvaded Ukraine.[129]In March 2022, Belarus was suspended from any participation in the OECD.[130]
The OECD operates on a two-year budget determined by member countries, with annual revenues over 700 million EUR during the most recent reporting period (2021–2022).[131][3]
Totalling an estimated 229.9m EUR in 2024, assessed contributions to the "Part I Budget" is largest single source of revenue for the OECD and these contributions are based on both the number of OECD members and the proportional size of their national economies.[132]
^Highly Commended certificate in the annual ALPSP/Charlesworth awards from the Association of Learned and Professional Society Publishers 2002; see article[1].
^abVicari, Jaromir; Snyder, Andrea (1 December 1995)."Czech Republic to be 26th OECD Member".CAROLINA. Faculty of Social Science of Charles University. Archived fromthe original on 10 October 2017. Retrieved31 May 2013.
^Vietnam+ (VietnamPlus) (22 January 2025)."PM meets with OECD Secretary-General in Davos".Vietnam+.Vietnam News Agency. Retrieved22 January 2025.PM Chinh suggested that the OECD consider Vietnam's early accession to the organisation and facilitate the inclusion of Vietnamese professionals within its Secretariat.
^"OECD iLibrary (formerly: Source OECD)".Ontario Council of University Libraries. 28 November 2011. Archived fromthe original on 5 March 2016. Retrieved29 January 2017.OECD iLibrary is OECD's Online Library for Books, Papers and Statistics and the gateway to OECD's analysis and data. It has replaced SourceOECD in July 2010.
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