What Is the OECD?

What Does the OECD Stand For?

European in restaurant
••• The OECD promotes economic development among its members. Photo: ONOKY - Fabrice LEROUGE/Getty Images

The OECD stands for the Organization for Economic Cooperation and Development. It's an association of 35 nations in Europe, the Americas, and the Pacific. Its goal is to promote the economic welfare of its members. It coordinates their efforts to aid developing countries outside of its membership.

The OECD's headquarters is at 2, rue André Pascal, 75775 Paris Cedex 16, France. It also has offices in Berlin, Mexico City, Tokyo, and Washington, D.C. 

Member Countries

Most of the 35 OECD members are from Europe. They are Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy,  Latvia, Luxembourg, Netherlands, Norway, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, and the United Kingdom. 

There are four countries from the Americas: Canada, Chile, Mexico, and the United States. The four Pacific members are Australia, Japan, Korea, and New Zealand. Israel and Turkey are also OECD members.

The OECD is working with six other emerging market countries to become members. This process is long and complicated. A nation must be reviewed by up to 20 OECD Committees. They make sure it conforms with OECD instruments, standards, and benchmarks. It must be willing to reform its economy to meet standards in three areas. These are the areas of corporate governance, anti-corruption, and environmental protection. It might have to amend its legislation to conform with these standards. The countries seeking admission are Brazil, ChinaIndia, Indonesia, Russia, and South Africa.

Statistics

The OECD collects, analyzes, and reports on economic growth data for its members. This gives them the knowledge to further their prosperity and fight poverty. It also balances the impact of economic growth on the environment.

The OECD monitors economic data so it can update its projections. Committees within the OECD analyze the data and make policy recommendations. It's up to each member country to decide how to use OECD recommendations.

Members have used OECD recommendations in many ways. They've created formal "rule of the game" agreements for international cooperation. These rules include prohibitions against bribery. They also include arrangements for export credits and the treatment of capital movements. OECD agreements have resulted in standards in bilateral tax treaties. They've also increased cross-border co-operation on outlawing spam, and corporate governance guidelines.

Economic Outlook

Each year, the OECD publishes its economic outlook. The OECD Economic Outlook analyzes the economic prospects for the 35 members and the major non-member countries. The Outlook provides in-depth coverage of the economic policies needed for each member, as well as an overview for the total OECD area. The report is updated twice a year to stay current with the significant shifting trends.

It updates the report in March of each year. In March 2018, the OECD forecast a strengthening global economy. In 2018, the world's gross domestic product will increase by a robust 4 percent.

The growth is a result of robust investment, an uptick in international trade, and higher employment. Companies will respond to U.S. President Trump's tax cuts and fiscal stimulus in Germany.

The OECD is concerned about a global trade war. If countries revert to mercantilism, global trade and economic growth will weaken. 

Reports

Besides the Outlook, the OECD publishes other statistical reports. The OECD Factbook is a 300-page reference tool available online and for mobile apps. It describes the economic, social and environmental indicators of the OECD members and applicants. Statistics cover 10 areas:

  1. Population and migration patterns,
  2. Production and income,
  3. Pricing,
  4. Labor,
  5. Energy and transportation,
  6. Science, 
  7. Technology,
  8. The environment,
  9. Education,
  10. Health and public finance.

The OECD Economic Surveys are done for each member country every one to two years. It summarizes each country's leading economic challenges and provides policy recommendations. For example, the OECD recommended austerity measures to solve the Greek debt crisis. It said the proposals would make Greece more competitive in the global economy.

The "Going for Growth" report helped members recover from the 2008 financial crisis. It highlighted the five most significant changes to enhance long-term growth.

Education

Every three years, the OECD conducts the Programme for International Student Assessment. It evaluates education systems around the world by testing the knowledge of 15-year-old students. The OECD uses the data to recommend ways to improve equity in education.

History

The OECD was initially called the Organisation for European Economic Cooperation, or OEEC. It was started in 1947, after World War II, to run the Marshall Plan to reconstruct Europe. Its goal was to help European governments recognize their economic interdependence. In this way, it was one of the roots of the European Union.

Once the Marshall Plan was complete, Canada and the United States joined the OEEC nations. That created the OECD on December 14, 1960. The OECD went into full force on September 30, 1961.