The OECD.pdf

# OECD mission and core functions The OECD's fundamental mission is to develop better policies for better lives by fostering prosperity, opportunity, equality, and well-being through evidence-based international standards and solutions to global challenges [1](#page=1). ### 1.1 Mission statement and overarching aim The Organization for Economic Co-operation and Development (OECD) defines its mission as building "better policies for better lives". This involves leveraging over six decades of experience to shape policies that promote prosperity and opportunity, with an emphasis on equality and well-being. The organization collaborates with policymakers, stakeholders, and citizens to establish evidence-based international standards and to find solutions for social, economic, and environmental issues. The OECD's core objective is to set international standards, support their implementation, and assist countries in developing stronger, fairer, and cleaner societies [1](#page=1). > **Tip:** The concise catchphrase "Better policies for better lives" effectively summarizes the OECD's overarching mission [1](#page=1). ### 1.2 Role as a knowledge hub and forum The OECD functions as a unique forum and knowledge hub for data, analysis, and best practices in public policy across a wide array of domains. It enables national officials to acquire best practices for governing a modern industrialized nation according to high standards. The organization is renowned globally as an impressive knowledge hub, collecting and publishing extensive data sets for both member and non-member states across numerous policy areas. Furthermore, the OECD has produced thousands of substantive studies on socio-economic and societal themes, and its secretariat disseminates knowledge to member states and civil society through numerous annual meetings [1](#page=1) [2](#page=2) [4](#page=4). ### 1.3 Core functions and goals The OECD's core functions extend beyond mere data collection and analysis. It is an intergovernmental organization that primarily assists its members in improving their public policy. The organization covers almost all policy domains, including finance, economics, fiscal policy, social policy, innovation, environment, education, and anti-corruption, with the exception of international security, police, and human rights [1](#page=1). The OECD seeks to address shared transnational challenges through treaties and soft-law agreements. A significant aspect of its work involves standard-setting, aiming to achieve three key goals [2](#page=2) [4](#page=4): * **Promoting a level playing field:** The OECD strives to create equitable conditions among countries and companies to ensure fair competition. Significant disparities in regulations related to labor standards, health, environmental protections, or corruption can distort competitive conditions and worsen societal issues [4](#page=4). * **Facilitating international exchange:** Numerous OECD initiatives are designed to ease cross-border transactions, such as removing barriers to free capital movements or encouraging tourism [4](#page=4). * **Establishing international standards:** The organization works to set international standards and support their implementation to guide countries towards stronger, fairer, and cleaner societies [1](#page=1). --- # History and membership evolution This topic traces the OECD's origins from its predecessor, the OEEC, through its transformation into an intercontinental body and the evolving criteria and process for membership. ### 2.1 Origins and transformation from OEEC to OECD The Organization for Economic Co-operation and Development (OECD) was established in 1961, evolving from the Organization for European Economic Co-operation (OEEC). The OEEC was created in 1948, prompted by the United States, to coordinate the distribution of Marshall Plan aid for the recovery of capitalist European nations after World War II. This initiative also served to bolster US influence through economic success as a counter to communist ideologies. Therefore, the OECD's roots are deeply connected to the Cold War context [2](#page=2). In 1960, the OEEC underwent a transformation into the OECD. It retained the OEEC's member states and incorporated the United States, Canada, and Spain, thereby expanding its focus beyond Europe to become intercontinental. During the latter part of the Cold War, Japan, Finland, Australia, and New Zealand also joined the organization. It is notable that the OECD admitted countries with authoritarian regimes at the time of their accession, such as Turkey, Portugal, and Spain, or countries that later developed such regimes, like Greece [2](#page=2). ### 2.2 Post-Cold War membership expansion Following the end of the Cold War, the OECD experienced a significant accession process, integrating former European communist countries and opening its doors to emerging economies from the Global South. To avoid reinforcing its image as a Western-centric organization, the OECD strategically admitted emerging economies and European post-communist countries alternately. This expansion has resulted in an organization that now spans all continents except Africa. As of 2024, the OECD comprises 38 member states [2](#page=2). When Mexico and South Korea joined the OECD in the 1990s, they withdrew from the G77, a bloc of developing countries, due to opposition to dual membership. However, Chile's accession in 2010 marked a shift, as it chose to remain a member of the G77. In the absence of explicit rules, Latin American countries supported Chile's decision, although some African nations objected. Since then, other Latin American countries joining the OECD have also maintained their G77 membership [2](#page=2). ### 2.3 Criteria for membership OECD members are generally expected to be advanced or emerging industrialized nations that adhere to principles of free markets, transparent governance, and anti-corruption standards. At the conclusion of the Cold War, the OECD further stipulated that member states must be liberal democracies. In 2001, the OECD affirmed its commitment to a "community of nations committed to the values of democracy based on the rule of law and human rights, and adherence to open and transparent market-economy principles". The OECD's 60th Anniversary Vision Statement reiterated this, asserting that members form a "like-minded community, committed to the preservation of individual liberty, the values of democracy, the rule of law and the defence of human rights". They also commit to "open and transparent market economy principles," pursuing "sustainable economic growth and employment, while protecting our planet," and aiming to "end poverty, to tackle inequalities and to leave no one behind" [3](#page=3). ### 2.4 Membership evolution timeline and categories The initial membership of the OEEC/OECD began with 18 countries in 1960, including Austria, Belgium, Denmark, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, Netherlands, Norway, Portugal, Sweden, Switzerland, Turkey, the United Kingdom, and the United States. Canada joined in the same year [3](#page=3). * **Original OEEC members, founding members of OECD:** These include Austria, Belgium, Denmark, France, Germany, Greece, Iceland, Ireland, Italy, Luxemburg, Netherlands, Norway, Portugal, Sweden, Switzerland, Turkey, UK [3](#page=3). * **Other founding members:** Canada and the US are listed separately from the original OEEC members who also founded the OECD [3](#page=3). * **New members during Cold War:** Japan Finland Australia and New Zealand joined during this period [3](#page=3). * **Post-Cold War accessions:** Mexico Czech Republic Poland Hungary South Korea Slovakia Chile Estonia Israel Slovenia Latvia Lithuania Colombia and Costa Rica represent this wave of expansion [3](#page=3). ### 2.5 Criteria for accession of new members Prospective member states must meet several criteria to join the OECD. These include demonstrating "like-mindedness," being a "significant player" in the global economy, offering "mutual benefit," and aligning with "global considerations". Additionally, candidates must subscribe to the majority of the "OECD acquis," which encompasses a wide array of existing hard and soft agreements. Technical reviews conducted by various OECD committees assess a country's compliance or its capacity to comply with these standards. The final decision on accession is made by the OECD Council through a unanimous vote [9](#page=9). Candidate countries view OECD membership as a "quality label" that signals to the international community that they are well-governed, stable, and prosperous economies with a commitment to the rule of law, governmental transparency, and accountability [9](#page=9). ### 2.6 Candidate countries and suspended candidates As of the document's content, current candidates for accession include Argentina, Brazil, Bulgaria, Croatia, Indonesia, Peru, Romania, and Thailand. Russia's candidacy was suspended in 2014 due to its military actions against Ukraine [9](#page=9). > **Tip:** Understanding the evolving membership criteria is crucial. The shift from post-war European recovery to a more global and values-based approach reflects broader geopolitical changes and the OECD's aim to foster shared principles. > **Example:** The differing stances of Mexico and Chile regarding continued membership in the G77 after joining the OECD illustrate the complexities and varying interpretations of dual membership and the organization's role in global development dialogues. --- # OECD working methods and outputs The OECD's operational framework is characterized by a specific governance structure, its role as a knowledge hub, its standard-setting activities through both hard and soft law, and a distinctive 'OECD method' encompassing technocracy, consensus-building, voluntary cooperation, learning, and peer pressure. ### 3.1 Governance structure The Organisation for Economic Co-operation and Development (OECD) is headquartered in Paris. Its principal intergovernmental decision-making body is the Council, where member states are represented by their permanent representatives, akin to ambassadors to the OECD. Annually, a ministerial meeting is convened to determine the OECD's strategic directions, including its governance rules and membership. Over 300 intergovernmental Committees operate across various policy domains, generating a wide array of OECD outputs [4](#page=4). The executive leadership of the OECD is held by the Secretary-General, who oversees the Secretariat. The current Secretary-General is Mathias Cormann, a former Australian Finance Minister. The OECD employs more than 3,500 staff members, with its secretariat recognized for its extensive expertise and proactive approach in advancing the organization's strategic interests [4](#page=4). ### 3.2 OECD outputs #### 3.2.1 Knowledge hub The OECD is globally renowned as a significant knowledge hub. It diligently collects and disseminates extensive data sets relevant to both member and non-member states across a broad spectrum of policy areas. Additionally, the organization has produced thousands of substantive studies focusing on socio-economic and societal themes. The OECD secretariat further disseminates its knowledge to member states and civil society through the thousands of meetings it convenes annually [4](#page=4). #### 3.2.2 Standard setting International organizations, like the OECD, complement the actions of states for specific strategic reasons, often tied to a particular vision of the multilateral institution's role and its relationship with sovereign nations. The OECD's standards aim to achieve three primary goals [4](#page=4): 1. **Promoting a level playing field:** The OECD strives to ensure fair competition by promoting uniform standards among countries and companies. Significant disparities in regulations—whether concerning labor standards, health, environmental protection, or anti-corruption measures—can distort competitive conditions and exacerbate other societal challenges [4](#page=4). 2. **Facilitating international exchange:** Several OECD initiatives are designed to ease international trade and interactions. This can involve removing cross-border barriers, such as those affecting capital movements to encourage tourism, or establishing frameworks for distributing taxing rights among nations where multinational corporations operate [5](#page=5). 3. **Improving national policies:** The OECD formulates recommendations and sets standards for purely national policies across a multitude of policy domains. This serves to enhance the quality of member states' public policies, thereby providing a valuable service to them. This activity also contributes to a collective interest, as in a globalized economy, all countries are impacted by the governance quality of others, given that nations are each other's export markets and investment destinations. National governance also affects the robustness of the global economy, upon which all countries depend, highlighting the collective dimension of seemingly domestic issues like education quality [5](#page=5). To achieve its standard-setting objectives, the OECD has developed numerous international agreements classified as **hard law**, which are legally binding. Examples include the 1961 Code of Liberalization of Capital Movements and the 1999 Convention on Combating Bribery of Foreign Public Officials in International Business Transactions [5](#page=5). In parallel, the OECD has produced a substantial volume of **soft law**. These are legally non-binding agreements that consist of recommendations and guidelines that member states (and non-members) are encouraged to adopt. Some of these outputs are specifically targeted at non-state actors, such as the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct [5](#page=5). ### 3.3 The 'OECD method' Beyond its specific products, the OECD's working methods reveal distinct characteristics that collectively form the 'OECD method' from a political science perspective [5](#page=5). #### 3.3.1 Technocratic atmosphere The work within the OECD is conducted in a technocratic environment. The organization generally avoids engaging in geopolitical tensions and conflicts. Instead, member states and their officials convene at the OECD to learn and identify solutions, drawing upon data and expertise provided by the secretariat. While the OECD leadership aims to highlight its achievements, internal discussions are typically kept private. This technocratic approach is facilitated by the relatively like-minded and less heterogeneous nature of OECD membership compared to organizations like the UN, where geopolitical tensions and deep-seated ideological divisions can impede socio-economic governance processes [5](#page=5) [6](#page=6). > **Tip:** It's important to remember that while the OECD strives for a technocratic approach, all its decisions and adopted strategies are inherently political and contestable, involving trade-offs and political choices. A truly "apolitical" technocracy does not exist [6](#page=6). #### 3.3.2 Consensus building to stimulate domestic reform and international standard setting The influential OECD secretariat actively works to foster consensus among member states and beyond regarding analyses, approaches, norms, and standards. This consensus is intended to drive domestic reforms and promote the international acceptance of OECD standards. The OECD's committees and working groups function as "transnational government networks". In these networks, officials from national government functional branches collaborate with OECD staff on international issues. Despite their national affiliations, these officials can form relatively autonomous transnational communities. Over time, many of these networks develop a technocratic consensus on the causes and solutions to complex problems. Due to the technical nature of many issues, democratic oversight by parliaments and civil society can be challenging to achieve [6](#page=6). #### 3.3.3 The attractiveness of voluntary cooperation and soft law A significant portion of the OECD's work and outputs is voluntary and non-binding. State representatives participate in OECD forums to acquire knowledge or to adopt soft law agreements, often seeking technical answers to seemingly technical problems. This contrasts with organizations like the UN, where intergovernmental bodies and summits frequently engage in intense debates over politically sensitive language, as such wording is believed to establish international norms or law of strategic importance. The OECD's non-committal atmosphere offers a more welcoming and 'safe' environment for participating states [6](#page=6). #### 3.3.4 Learning For member states, engagement with the OECD is largely an exercise in learning. This learning occurs through OECD publications, the vast number of meetings, and training activities designed for public officials. During these interactions, national civil servants also engage in peer learning and the exchange of best practices [6](#page=6). > **Example:** The OECD's emphasis on learning is evident in its structured training programs for government officials and the dissemination of research findings through publications and conferences. #### 3.3.5 Peer pressure Despite the voluntary nature of much of the OECD's policy work, certain working methods incorporate forms of peer pressure. By publishing country data and organizing organized reviews by the OECD and its peers, national governments are encouraged to improve specific policies [7](#page=7). > **Example:** The periodic Program for International Student Assessment (PISA) surveys, conducted every three years, assess the performance of 15-year-olds in reading, mathematics, and science. These comparative data highlight countries that are performing exceptionally well or poorly. The release of each PISA study often sparks debates within member states and stimulates reform efforts, exemplifying a form of 'soft governance by hard fact' [7](#page=7). The OECD also implements peer review processes, such as the Economic Surveys conducted every two years for each member country and volunteering non-members. These surveys examine socio-economic developments (including macroeconomics, budgets, and labor markets) within the country under review. The secretariat compiles and interprets data to draft the review report. Each country's report is then peer-reviewed and subsequently approved by the OECD’s Economic and Development Review Committee (EDRC), which comprises representatives from all member states [7](#page=7). ### 3.4 The OECD system The OECD functions as the central hub within a broader network of international intergovernmental organizations. These organizations are often offshoots of the OEEC or OECD and maintain structural connections with the OECD, also being headquartered in Paris [7](#page=7). * **Nuclear Energy Agency (NEA):** Renamed in 1972 but established in 1958 under the OEEC, the NEA is dedicated to sharing and disseminating state-of-the-art knowledge in nuclear energy. It supports and convenes member states regarding the civilian use of nuclear energy and pursues 'consensus policy positions' that serve as a key reference for national policies. The NEA also oversees and contributes to the update of international legal agreements concerning peaceful nuclear power and has a membership of 33 countries that largely overlaps with the OECD's [7](#page=7). * **International Energy Agency (IEA):** Established in 1974 at the initiative of US Secretary of State Henry Kissinger, the IEA was a response to the oil crisis caused by the export embargo of Arab members of OPEC during the 1973 Yom Kippur War. Initially, the IEA focused on ensuring energy security for predominantly oil-importing Western countries, with members obliged to maintain oil stocks equivalent to 90 days of net oil imports to control prices during supply crises. The IEA has since expanded its scope to encompass all aspects of energy and, like the OECD, serves as a knowledge hub supporting its members [7](#page=7). --- # OECD's global reach and external relations The OECD actively extends its influence beyond its membership through strategic outreach, partnerships with emerging economies, global forums, and a close relationship with the G20, significantly shaping global governance [10](#page=10) [11](#page=11) [12](#page=12) [7](#page=7) [8](#page=8) [9](#page=9). ### 4.1 Mechanisms for extending influence The OECD employs various methods to exert influence and foster cooperation beyond its member states. These include soft governance techniques, structural relationships with affiliated agencies, and proactive engagement with non-members. #### 4.1.1 Soft governance through data and peer review The OECD utilizes data-driven insights and peer pressure as tools for policy improvement. * **Comparative Data:** Periodic surveys, such as the Program for International Student Assessment (PISA), expose national performance in areas like reading, mathematics, and science. The release of these comparative data often sparks internal debates and stimulates policy reforms within member states, exemplifying "soft governance by hard fact" [7](#page=7). * **Peer Review:** The OECD conducts peer reviews, notably through its Economic Surveys of member and volunteering non-member countries. These surveys, which examine socio-economic developments, are drafted by the secretariat and then critically reviewed and approved by the OECD’s Economic and Development Review Committee (EDRC), where all member states are represented [7](#page=7). #### 4.1.2 Structural relationships with affiliated organizations Several international intergovernmental organizations, originating from or closely linked to the OEEC/OECD, maintain structural relationships and are headquartered in Paris, acting as extensions of the OECD's network. * **Nuclear Energy Agency (NEA):** Established in 1958 under the OEEC, the NEA (renamed in 1972) focuses on sharing knowledge in nuclear energy, supporting member states in the civilian use of nuclear energy, and contributing to international legal agreements on peaceful nuclear power. Its membership largely overlaps with the OECD's [7](#page=7). * **International Energy Agency (IEA):** Founded in 1974 in response to the oil crisis, the IEA's initial aim was to ensure energy security for oil-importing nations by obliging members to maintain oil stocks equivalent to 90 days of net oil imports. Its scope has since expanded to cover all energy aspects, serving as a knowledge hub and facilitating cooperation with both members and interested non-members. Its members are 31 OECD countries [7](#page=7). * **Financial Action Task Force (FATF):** Established by the G7 in 1989 and headquartered at the OECD Secretariat, the FATF oversees non-binding international standards on money laundering and illicit financial flows, and monitors compliance trends. Its membership includes most OECD countries and all G20 countries [8](#page=8). ### 4.2 The OECD's global governance ambition The OECD actively seeks to influence economies and societies worldwide, driven by the belief that the stability and prosperity of its own members are intrinsically linked to global developments. This ambition is pursued for three primary reasons: fostering a level playing field for fair competition, improving overseas business opportunities for OECD investors and exporters, and strengthening the global economy [8](#page=8). #### 4.2.1 The Multilateral Agreement on Investment (MAI) initiative The failed attempt to establish the Multilateral Agreement on Investment (MAI) in the mid-1990s illustrates the OECD's early ambition to shape global governance beyond its membership [8](#page=8). * **Objective:** The MAI was envisioned as a "constitution for foreign direct investment" (FDI), aiming to provide a legal framework similar to the WTO's for trade [8](#page=8). * **Neoliberal Focus:** The draft treaty emphasized the rights of multinational companies and the obligations of host states, proposing to prohibit common host-country practices like local content procurement, profit reinvestment, technology sharing, and local board representation. It aimed to maximize freedom for multinational companies and provided robust protection against expropriation, including a state-company dispute settlement system [8](#page=8). * **Strategy and Opposition:** The OECD's strategy was to have member states adopt the MAI and then encourage other countries to follow suit through a competitive race for adoption, positioning MAI membership as a "quality label" for FDI attraction. However, the draft's leak in 1994 led to widespread criticism from civil society organizations, who viewed it as a threat to national sovereignty, social rights, and the environment. The OECD's tactics were perceived as less transparent than UN or WTO negotiations. This resulted in the birth of the "alter-globalization movement" and significant pressure on OECD governments, ultimately leading France and Belgium to withdraw from negotiations in 1998, shelving the MAI. Subsequent attempts to incorporate MAI elements into WTO investment negotiations faced resistance from emerging powers [9](#page=9). #### 4.2.2 Membership enlargement as an outreach strategy Welcoming new member states is considered the most direct way for the OECD to expand its influence [9](#page=9). * **Candidate Countries:** Several countries are currently candidates for accession, including Argentina, Brazil, Bulgaria, Croatia, Indonesia, Peru, Romania, and Thailand. Russia's candidacy was suspended in 2014 due to its aggression against Ukraine [9](#page=9). * **Accession Criteria:** Membership requires "like-mindedness, significant player, mutual benefit and global considerations". Candidates must subscribe to the OECD 'acquis' (existing hard and soft agreements), undergo technical reviews by OECD committees, and be unanimously approved by the OECD Council [9](#page=9). * **Perceived Benefits:** Candidate countries view OECD membership as a "quality label" signaling good governance, stability, prosperity, and adherence to the rule of law, transparency, and accountability [9](#page=9). #### 4.2.3 Relations with non-members The OECD maintains relationships with numerous non-member countries through various channels, coordinated by the OECD's Global Relations and Cooperation Directorate [9](#page=9). * **Committee Participation:** Non-members can participate in OECD committees [9](#page=9). * **Regional Programs:** The OECD operates five regional programs that convene groups of countries: Eurasia, Latin America & the Caribbean, Middle East & North Africa, Southeast Asia, and South East Europe [9](#page=9). ### 4.3 Key partnerships and engagement with emerging economies The OECD has strategically deepened its engagement with major emerging economies, fostering collaborative relationships that offer an alternative to full membership. #### 4.3.1 Designation of 'key partners' In 2007, the OECD designated five major emerging economies as 'key partners': Brazil, China, India, Indonesia, and South Africa. While Brazil and Indonesia have since become candidate members, this designation highlights a pragmatic approach to engagement [10](#page=10). * **Nature of Partnership:** Key partners participate extensively in committee work and are covered in OECD studies and statistics. This "modus vivendi" allows these countries to "cherry-pick" from the OECD's offerings, providing a mutually beneficial alternative to full membership for both sides [10](#page=10). * **Concerns and Motivations:** Incumbent OECD members sometimes express concern about a dilution of the organization's identity, particularly regarding criteria like democracy and human rights when engaging with countries like China and India. Conversely, countries like China and India prioritize their sovereignty and are reluctant to fully adopt the OECD acquis or its high levels of transparency and peer review. They also have different economic and social needs, such as combating mass poverty in India [10](#page=10). ### 4.4 Global Forums and avoiding UN centrality The OECD utilizes Global Forums to involve non-members and shape global norms, often leading to competition with the United Nations (UN) in certain policy areas [10](#page=10). * **Function of Global Forums:** Dozens of Global Forums are established to convene government officials from member and non-member states, as well as non-state actors, for learning and peer review on common standards [10](#page=10). * **High-Level Forums on Aid Effectiveness:** From 2003 to 2011, the OECD's Development Assistance Committee (DAC) organized High-Level Forums to foster dialogue between OECD aid donors, emerging non-OECD donors (like China, India, and Gulf States), and recipient countries. The aim was to adapt to a new landscape where industrialized countries shared the official development assistance (ODA) scene with emerging powers, while trying to influence the latter's perspectives. This led to mutual influence and the institutionalization of these forums into the Global Partnership for Effective Development Co-operation (GPEDC) in 2012, jointly supported by the OECD and UNDP [10](#page=10). * **Competition with UN:** The GPEDC runs parallel to and competes with the UN Development Cooperation Forum, as both aim to shape global norms in development aid policy [10](#page=10). * **Peer Review Forums:** Examples include the Global Forum on Transparency and Exchange of Information for Tax Purposes (with 171 members), which monitors the implementation of the OECD standard for automatic information exchange. The BEPS Inclusive Framework (145 members) monitors the G20/OECD BEPS Action Plan on corporate taxation and has been involved in significant decision-making, such as establishing a 15 percent minimal effective tax rate for multinational companies [10](#page=10). * **Turf Wars and Erosion of UN Centrality:** The OECD's extensive agenda, often overlapping with the UN's mandate, has led to "turf wars" in areas like development cooperation and taxation. In these instances, OECD countries have deliberately opted against giving the UN a leading role, contributing to the erosion of the UN's centrality. This sidelining of the UN in global tax cooperation has been accepted by non-OECD members within the UN [11](#page=11). ### 4.5 The G20-OECD relationship The advent of the G20, particularly its elevation to a global leaders' summit in 2009, provided the OECD with a significant opportunity to bolster its global governance role [11](#page=11). * **Synergistic Partnership:** The G20, lacking a secretariat, frequently relies on the OECD's expertise for the preparation and implementation of its policies. While G20 leaders can initiate initiatives more effectively, the OECD, as an experienced knowledge hub, contributes intellectually to the G20 agenda. The proactive engagement of former OECD Secretary-General Angel Gurría significantly strengthened this relationship [11](#page=11). * **Joint Initiatives:** A prime example of their collaboration is in global tax policy, including joint G20-OECD initiatives on automatic exchange of tax information and the Base Erosion and Profit Shifting (BEPS) Action Plans. Through forums like the Global Tax Forum and BEPS Inclusive Framework, the OECD involves a broad range of countries in these initiatives [11](#page=11). * **OECD as 'G20's Secretariat':** The extensive preparatory and implementation work undertaken by the OECD for the G20 has led to it being described as the "G20's secretariat" [11](#page=11). * **Pragmatism of Non-OECD G20 Members:** Non-OECD G20 members, such as the BRICS countries, Argentina, Indonesia, and Saudi Arabia, have agreed to the OECD's prominent role due to their appreciation of the OECD's expertise. As full G20 members, they co-determine the terms of this relationship, thus safeguarding their interests. Notably, Argentina, Brazil, and Indonesia are also candidates for OECD membership [11](#page=11). ### 4.6 The OECD and geopolitics The OECD's role extends beyond its administrative functions to actively cultivating a common identity within its transnational network, potentially fostering understanding and peace, particularly in its interactions with countries like China [12](#page=12). * **Potential for Common Ground:** The OECD's technocratic culture offers potential for fostering common understanding and even promoting peace between different geopolitical blocs [12](#page=12). * **Limitations and Skepticism:** The OECD's influence is modest amidst competing global forces. Its Western-dominated, liberal-democratic, and mildly neoliberal consensus is not universally appealing; lower-income countries may not find its approaches suitable for their needs, and some governments reject transparency and democratic values [12](#page=12). * **Shifting Geopolitical Landscape:** The OECD's geopolitical positioning has evolved. While it historically served as an instrument for the US, G7, and EU to promote their views globally, and emerging economies pragmatically engaged with the system, the recent increase in confrontation between the West and China-Russia suggests the OECD might be instrumentalized in this competition. Full membership can be seen as a means to integrate developing and post-socialist countries more deeply into the Western bloc, as exemplified by Colombia [12](#page=12). * **Autonomy and Multialignment:** However, several countries are keen to retain their autonomy and engage in multialignment. Examples include Indonesia and Thailand, both OECD candidates who have also sought membership in BRICS. Turkey, a founding OECD member, has also bid for BRICS membership, while Brazil's president has placed its OECD candidacy on hold. This suggests that using the OECD to consolidate the Western bloc is not proving highly successful, with many powers engaging with both the G7/OECD and BRICS blocs [12](#page=12). --- ## Common mistakes to avoid - Review all topics thoroughly before exams - Pay attention to formulas and key definitions - Practice with examples provided in each section - Don't memorize without understanding the underlying concepts

| Term | Definition | |------|------------| | Organization for Economic Co-operation and Development (OECD) | An international organization that aims to build better policies for better lives by fostering prosperity and opportunity through evidence-based international standards and solutions to social, economic, and environmental challenges. | | Organization for European Economic Cooperation (OEEC) | The predecessor to the OECD, established in 1948 to coordinate Marshall Plan aid in post-war capitalist Europe. | | Marshall Plan | A US initiative providing financial aid for the economic recovery of Western Europe after World War II. | | Soft power | The ability to influence others through attraction and persuasion rather than coercion or payment. | | Knowledge hub | A central repository and source of information, data, and expertise that facilitates learning and dissemination of best practices. | | Standard setting | The process by which an organization establishes norms, guidelines, or requirements that are intended to be adopted or followed by its members or other relevant parties. | | Hard law | Legally binding international agreements, such as treaties, that create obligations for states that ratify them. | | Soft law | Non-binding agreements, such as recommendations and guidelines, that do not create legal obligations but can influence behavior and policy. | | Technocracy | A system of governance where decision-makers are selected based on their technical expertise and knowledge, often emphasizing data and scientific principles. | | Consensus building | The process of reaching a general agreement among a group of people or entities through discussion and negotiation. | | Transnational government networks | Networks where officials from national governments collaborate with international organization staff to address international issues, potentially forming relatively autonomous communities of practice. | | Peer pressure | An indirect form of influence exerted by individuals or groups on others to conform to certain norms, standards, or behaviors. | | Peer review | A systematic evaluation of a country's policies or performance by other member states or experts, often conducted within international organizations to stimulate improvement. | | Nuclear Energy Agency (NEA) | An intergovernmental agency that shares and disseminates knowledge on nuclear energy, supporting member states and developing consensus policy positions. | | International Energy Agency (IEA) | An agency established to ensure energy security, particularly for oil-importing countries, and has expanded its scope to cover all aspects of energy. | | Financial Action Task Force (FATF) | An intergovernmental organization that sets standards and monitors compliance on anti-money laundering and combating the financing of terrorism. | | Multilateral Agreement on Investment (MAI) | A proposed but ultimately shelved OECD treaty intended to govern foreign direct investment by emphasizing the rights of multinational companies and limiting host state practices. | | Foreign Direct Investment (FDI) | An investment made by a company or individual in one country into business interests located in another country. | | Alter-globalization movement | A social movement advocating for a more democratic, just, and ecologically sustainable form of globalization, often critical of institutions like the OECD and its proposed agreements. | | OECD acquis | The body of OECD agreements, standards, and principles that candidate countries must subscribe to or comply with to be considered for membership. | | Global Forums | Platforms established by the OECD to convene government officials and non-state actors from member and non-member countries to discuss and address common global issues. | | Aid Effectiveness | A concept and initiative focused on improving the impact and efficiency of development assistance, involving dialogue between donors and recipient countries. | | Base Erosion and Profit Shifting (BEPS) | A set of tax rules developed by the OECD and G20 to prevent companies from shifting profits to low-tax locations to avoid taxation. | | G20 | A forum for international economic cooperation among 19 major advanced industrialized and emerging economies, plus the EU and African Union. | | Geopolitics | The study of the influence of geography on international politics and relations between states. |