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The Organisation for Economic Co-operation and Development (OECD), founded in 1961, is an intergovernmental forum of 38 member countries committed to democracy and the market economy, promoting economic progress and world trade. Most members are developed countries with high-income economies and high human development. As of 2024, OECD countries' combined population is 1.38 billion, with an average life expectancy of 80 years and a median age of 40. They represent over 62% of global nominal GDP and are official United Nations observers. The OECD, headquartered at the Château de la Muette in Paris, is influential in economic data publication and policy coordination.

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History

Organisation for European Economic Co-operation

The OECD is the successor organization to the Organisation for European Economic Co-operation (OEEC),13 established in April 1948 among the European recipients of Marshall Plan aid for the reconstruction of Europe after World War II.141516 Only Western European states were members of the OEEC, whose primary function was the allocation of American aid. Its Secretaries-General17 were the Frenchmen Robert Marjolin (1948–1955) and René Sergent (1955–1960). It was headquartered in the Château de la Muette in Paris.

Following the end of Marshall aid in 1952, the OEEC focused on economic issues.18 Its coordinating role was challenged after the 1957 Rome Treaties establishing the European Economic Community and Euratom. The OEEC provided a framework for negotiations aimed at setting up a European Free Trade Area, to bring the EEC's Inner Six and other OEEC members together on a multilateral basis. In 1958, a European 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 the Hotel 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 convincing Japan to join the organisation.192021

Founding

The Convention 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:

  • Austria
  • Belgium
  • Canada
  • Denmark
  • France
  • West Germany
  • Greece
  • Iceland
  • Ireland
  • Italy
  • Luxembourg
  • Netherlands
  • Norway
  • Portugal
  • Spain
  • Sweden
  • Switzerland
  • Turkey
  • United Kingdom
  • United States

Japan became a member in 1964, and over the following decade, Finland, Australia, and New Zealand also joined the organisation. Yugoslavia had observer status in the organisation, starting with the establishment of the OECD, until its dissolution as a country.22 The OECD also created agencies such as the OECD Development Centre (1961), International Energy Agency (IEA, 1974), and Financial Action Task Force on Money Laundering.

The aims of the OECD are stated in Article 1 of the Convention23 as:

  1. To achieve the highest sustainable economic growth and employment and a rising standard of living in Member countries, while maintaining financial stability
  2. To contribute to sound economic expansion in Member as well as non-member countries
  3. To contribute to the expansion of world trade

Enlargement to Central Europe

Following the Revolutions of 1989, the OECD began assisting countries in Central Europe (especially the Visegrád 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 to Czechoslovakia, Hungary and Poland,24 including a membership option for these countries.25 As a result of this, Poland,26 Hungary, the Czech Republic and Slovakia, as well as South Korea27 and Mexico, became members of the OECD between 1996 and 2000.

Reform and further enlargement

East Germany joined on 3 October 1990 through reunification 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 by Turkey.28 In 1996, Estonia, Latvia, and Lithuania signed a Joint Declaration expressing willingness to become members of the OECD,29 and Slovenia 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 all EU member states.32 Romania reaffirmed in 2012 its intention to become a member of the Organisation through the letter addressed by Romanian Prime Minister Victor Ponta to OECD Secretary-General José Ángel Gurría.33 In September 2012, the government of Bulgaria 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 with Chile, Estonia, Israel, Russia, and Slovenia, and to strengthen cooperation with Brazil, China, India, Indonesia, and South 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 the 2014 annexation of Crimea.3738

In 2013, the OECD decided to open membership talks with Colombia and Latvia. In 2015, the Organisation opened talks with Costa Rica and Lithuania.39 Latvia became a member on 1 July 2016, and Lithuania soon followed on 5 July 2018.4041 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 2021.44

Other countries that have expressed interest in OECD membership are Argentina, Brazil,45 Croatia,46 Malaysia47 and Peru.48

In January 2022, the OECD reported that membership talks were underway with Argentina, Brazil, Bulgaria, Croatia, Peru and Romania.49

In March 2022, the OECD suspended the participation of Russia and Belarus due to the ongoing 2022 Russian invasion of Ukraine.50

In June 2022, during the annual OECD Ministerial Council Meeting, the Roadmaps for the Accession to the OECD Convention for Brazil, Bulgaria, Croatia, Peru and Romania were adopted.51 In March 2024, the Roadmaps for the Accession to the OECD were adopted with Argentina52 and Indonesia,53 and in July 2024, also with Thailand.54

Objectives and issues

Taxation

The OECD sets the rules governing international 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 the Base Erosion and Profit Shifting (BEPS) project initiated by the G20.

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 for Digital 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 the global 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 the Biden Administration in the United States and the OECD. Secretary-General Mathias Cormann of the OECD said, "This historic package will ensure that large multinational companies pay their fair share of tax everywhere."55

Multinational corporations

The OECD 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 for multinational corporations operating in or from countries adhering to the Declaration.56

Publications

The OECD publishes books, reports, statistics, working papers, and reference materials. All titles and databases published since 1998 can be accessed via OECD iLibrary. The OECD Library & Archives collection dates from 1947, including records from the Committee 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.57

Books

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:

  • The OECD 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 the Coronavirus 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.58
  • The Main Economic Indicators, published monthly. It contains a large selection of timely statistical indicators.
  • The OECD 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 in Excel format via StatLinks.
  • The OECD 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 published Human Capital: How what you know shapes your life, the first book in the OECD Insights series. This series uses OECD analysis and data to introduce important social and economic issues to non-specialist readers. Other books in the series cover sustainable development, international trade and international migration. The series was discontinued in 2017.59

All OECD books are available on the OECD iLibrary, the online bookshop or OECD Library & Archives.60

Magazine

OECD Observer, an award-winning magazine,61 was launched in 1962.62 The magazine appeared six times a year until 2010, and became quarterly in 2011 with the introduction of the OECD Yearbook, launched for the 50th anniversary of the organisation.63 The online and mobile64 editions contained news, analysis, reviews, commentaries and data on global economic, social and environmental challenges and listings of the latest OECD books.65 An OECD Observer Crossword was introduced in Q2 2013.66 The OECD 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.

Documentation on OECD's multilateral surveillance

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).67
  • Kumiharu Shigehara, "Multilateral Surveillance: the IMF, the OECD and G20" (Ligue Européenne de Coopération Économique, Paris, 2011)68
  • Kumiharu Shigehara, "The Limits of Surveillance and Financial Market Failure: Lessons from the Euro-Area Crisis" (Palgrave Macmillan 2014)69

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 titled The Bank of Japan, the OECD, and Beyond was published by Palgrave Macmillan in September 2024.70

Statistics

The OECD is known as a statistical agency, as it publishes comparable statistics on numerous subjects. In July 2014, the OECD publicly released its main statistical databases through the OECD Data Portal, an online platform that allows visitors to create custom charts based on official OECD indicators.7172

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 a URL 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 Commons CC‑BY‑4.0 attribution licenses will be used on all data and publications. 73

Working papers

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.

Reference works

The OECD is responsible for the OECD Guidelines for the Testing of Chemicals, a continuously updated document that is a de facto standard (i.e., soft law).74

It published the OECD Environmental Outlook to 2030 in March 2008, which argues that tackling key environmental problems—including climate change, biodiversity loss, water scarcity, and the health impacts of pollution—is both achievable and affordable.75

SDG Pathfinder

In 2020, the inaugural University Press Redux Sustainability Award was given to OECD by the Association of Learned and Professional Society Publishers (ALPSP) and Cambridge University Press.76 The award recognized the development of the SDG Pathfinder, an open-access digital discovery tool for finding content and data relating to the Sustainable Development Goals (SDGs).7778

Structure

The OECD's structure consists of three main elements:79

  • The OECD member 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 substantive committees, 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 OECD Secretariat, led by the Secretary-General (currently Mathias Cormann), provides support to standing and substantive committees. It is organised into directorates, which include about 2,500 staff.

Meetings

Delegates from the member countries attend committee and other meetings. Former Deputy Secretary-General Pierre 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.80 This ratio is unique among inter-governmental organisations. In other words, the OECD is more a persistent forum or network of officials and experts than an administration.

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.81

Noteworthy meetings include:

  • The yearly Ministerial Council Meeting, with the Ministers of Economy of all member countries and the candidates for enhanced engagement among the countries.
  • The annual OECD Forum, which brings together leaders from business, government, labour, civil society and international organisations. 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.
  • The Forum for Harmful Tax Practices
  • The Committee on Fiscal Affairs
  • 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.82

Secretariat

Exchanges between OECD governments benefit from the information, analysis, and preparation of the OECD Secretariat. The secretariat collects data, monitors trends, and analyses and forecasts economic developments. Under the direction and guidance of member governments, it also researches social changes or evolving patterns in trade, environment, education, agriculture, technology, taxation and other areas.

The secretariat is organised in directorates:83

  • Centre for Entrepreneurship, SMEs, Regions and Cities
  • Centre for Tax Policy and Administration
  • Development Co-operation Directorate
  • Directorate for Education and Skills
  • Directorate for Employment, Labour, and Social Affairs
  • Directorate for Financial and Enterprise Affairs
  • Directorate for Science, Technology, and Innovation
  • Economics Department
  • Environment Directorate
  • Public Governance Directorate
  • Statistics Directorate
  • Trade and Agriculture Directorate
  • General Secretariat
  • Executive Directorate
  • Public Affairs and Communication Directorate

Secretary-General

The head of the OECD Secretariat and chair of the OECD Council is the Secretary-General. Secretary-General selections are made by consensus, meaning all member states must agree on a candidate.84

Secretary-General of the OEEC
No.Secretary-GeneralTime servedCountry of origin
1Robert Marjolin1948 – 1955 France
2René Sergent1955 – 1960 France
3Thorkil Kristensen1960 – 30 September 1961 Denmark
Secretary-General of the OECD85
No.Secretary-GeneralTime servedCountry of originNotes
1Thorkil Kristensen30 September 1961 – 30 September 1969 Denmark
2Emiel van Lennep1 October 1969 – 30 September 1984 Netherlands
3Jean-Claude Paye1 October 1984 – 30 September 1994 France
—Staffan Sohlman (interim)1 October 1994 – November 1994 Sweden8687
3Jean-Claude PayeNovember 1994 – 31 May 1996 France88
4Donald Johnston1 June 1996 – 31 May 2006 Canada
5José Ángel Gurría1 June 2006 – 31 May 2021 Mexico89
6Mathias Cormann1 June 2021 – present Australia90

Committees

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.91

Special bodies

OECD has a number of specialised bodies:92

Voting

OECD decisions are made through voting, which requires unanimity among all of those voting. Each member country has one vote.93 However, dissenting members which do not wish to block a decision but merely to signal their disapproval can abstain from voting.94 22 of the OECD member countries are also EU member states.95

Member countries

Current members

As of May 2021 there are 38 members of the OECD:9697

CountryApplicationNegotiationsInvitationMembership98Geographic locationNotes
 Australia7 June 1971Oceania
 Austria29 September 1961EuropeOEEC member99
 Belgium13 September 1961EuropeOEEC member100
 Canada10 April 1961North America
 ChileNovember 200310110216 May 200710315 December 20091047 May 2010South America
 Colombia24 January 201110530 May 201310625 May 201810728 April 2020South America
 Costa Rica9 April 201510815 May 202010925 May 2021110Central America
 Czech RepublicJanuary 19941118 June 199411224 November 199511321 December 1995Europe
 Denmark30 May 1961EuropeOEEC member114
 Estonia16 May 200711510 May 20101169 December 2010Europe
 Finland28 January 1969Europe
 France7 August 1961EuropeOEEC member117
 Germany27 September 1961EuropeJoined OEEC in 1949 (West Germany).118Previously represented by the Trizone.119
 Greece27 September 1961EuropeOEEC member120
 HungaryDecember 19931218 June 19941227 May 1996Europe
 Iceland5 June 1961EuropeOEEC member123
 Ireland17 August 1961EuropeOEEC member124
 Israel15 March 200412516 May 200712610 May 20101277 September 2010Middle East
 Italy29 March 1962EuropeOEEC member128
 JapanNovember 1962129July 196313028 April 1964Asia
 Latvia29 May 201313111 May 20161321 July 2016133Europe
 Lithuania9 April 201513431 May 20185 July 2018135Europe
 Luxembourg7 December 1961EuropeOEEC member136
 Mexico14 April 199413718 May 1994North America
 Netherlands13 November 1961EuropeOEEC member138
 New Zealand29 May 1973Oceania
 Norway4 July 1961EuropeOEEC member139
 Poland1 February 19941408 June 199414111 July 199614222 November 1996Europe
 Portugal4 August 1961EuropeOEEC member143
 SlovakiaFebruary 19941448 June 1994145July 200014614 December 2000Europe
 SloveniaMarch 199614716 May 200714810 May 201014921 July 2010Europe
 South Korea29 March 199515025 October 199615112 December 1996AsiaOfficially the Republic of Korea
 Spain3 August 1961EuropeJoined OEEC in 1958152
 Sweden28 September 1961EuropeOEEC member153
  Switzerland28 September 1961EuropeOEEC member154
 Turkey2 August 1961EurasiaOEEC member155
 United Kingdom2 May 1961EuropeOEEC member156
 United States12 April 1961North America

Dependent territories

Dependent territories of member states are not members in their own right, but may have membership as part of their sovereign state.157 As of January 2021, the Dutch Caribbean and the British territories of Guernsey, Jersey, the Isle of Man, Gibraltar, and Bermuda are included as part of the OECD memberships of the Netherlands and the U.K., respectively.158159 Other dependent territories of OECD member states are not members of the OECD.

Participating partners

The European Commission participates in the work of the OECD alongside the EU member states.160 The OECD designates Brazil, China, India, Indonesia, and South Africa as Key Partners, which participate in policy discussions in OECD bodies, and take part in regular OECD surveys.161162

Negotiating membership

Applicants

Expressed interest

Former members

The Free Territory of Trieste (Zone A) was a member of the OEEC until 1954, when it merged with Italy and ceased to exist as an independent territorial entity.176

Accession talks terminated

In May 2007, the OECD decided to open accession negotiations with Russia.177 In March 2014, the OECD halted membership talks in response to Russia's role in that year's Crimean annexation and continuous human and civil rights abuses.178179 On 25 February 2022, the OECD terminated the accession process with Russia after it invaded Ukraine.180 In March 2022, Belarus was suspended from any participation in the OECD.181

Budget

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).182183

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.184

2024 Part I budget contribution shares
Member country% contribution
 Australia3.3
 Austria1.5
 Belgium1.7
 Canada3.8
 Chile1.2
 Colombia1.2
 Costa Rica0.9
 Czech Republic1.2
 Denmark1.4
 Estonia0.8
 Finland1.2
 France5.1
 Germany7.6
 Greece1.1
 Hungary1.0
 Iceland0.6
 Ireland1.4
 Israel1.5
 Italy3.9
 Japan8.5
 South Korea3.5
 Latvia0.8
 Lithuania0.9
 Luxembourg0.8
 Mexico2.7
 Netherlands2.4
 New Zealand1.2
 Norway1.6
 Poland1.7
 Portugal1.2
 Slovakia1.0
 Slovenia0.9
 Spain2.9
 Sweden1.7
  Switzerland2.1
 Turkey1.9
 United Kingdom5.5
 United States18.3
Total100.0

Permanent missions accredited to the OECD

See also

  • France portal

Notes

Wikimedia Commons has media related to Organisation for Economic Co-operation and Development - Organisation de coopération et de développement économiques.

References

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