The OECD Strategy on Development: Giving fresh impetus to a core mission
In May 2012 the OECD Ministerial Council endorsed the OECD Strategy on Development, describing it as an essential tool for adapting the organisation’s work to fast changing realities. What are the factors behind the new strategy and what are the aims?
A key to answering lies in understanding the founding mission of the OECD. Since its creation in 1961, the OECD has been promoting better governance and more effective policy reform to help countries everywhere achieve and sustain economic growth and improve well-being. For President John F. Kennedy, whose support helped create the organisation, the OECD would help to provide for “the hopes for growth of the less developed lands”.
This vision is reflected in the OECD Convention. In fact, the word “development” in the organisation’s title was chosen precisely to underline the point that, as well as boosting growth in member countries, a key goal would be to share the lessons of the post-war era and offer consultation on economic policy beyond the developed world.
The new OECD Strategy on Development gives fresh impetus to that founding mission, and it comes at an appropriate time.
The world’s economic centre of gravity has changed significantly in 50 years, with some developing countries now the key drivers of global growth.
Particularly since the 1990s when globalisation accelerated, scores of low-income and middle-income countries have recorded very high growth. Several major emerging economies–including China, India, Brazil, Indonesia and South Africa–grew by more than double the OECD rate from 2000 to 2010.
This shifted the economic weight between developed and developing countries, and has increased the need for developed and emerging markets to work together to address shared challenges. It has changed governance too, as shown by the coming to prominence of the G20, which groups developed, and emerging markets, as well as international organisations such as the OECD. Getting developed and developing countries to work ever more closely together and at every level–government, business and civil society, etc.–is particularly important, given changes in the geography and nature of poverty. A growing proportion of the world’s poor lives in the urban areas of middle-income countries, for instance. Inequality has also become a major challenge in advanced and developing countries, while all countries must address the challenges of climate change and resource scarcity.
Another important impulse behind the new strategy is to improve the coherence and effectiveness of development co-operation. Millions of people have been lifted out of poverty in 50 years, but millions more have been left behind. The importance of donor aid, or official development assistance (ODA), has not diminished, particularly for the least developed countries. But even if more countries were to meet the UN recommended goal of 0.7% of gross national income–currently just five OECD members reach it, with the OECD average at 0.3%–ODA alone would not be enough. Rather, financing is also changing as many developing economies become important global players in finance, trade, investment, innovation and development cooperation. Traditional ODA must also evolve, and act as a catalyst that links policymaking across the new architecture.
By emphasising “development” effectiveness, rather than the narrower “aid” effectiveness, the OECD Strategy on Development builds on from the Global Partnership for Effective Development established in Busan, Korea, in 2011; then, some 80 countries agreed to work together as partners to tackle issues such as inequality, vulnerability and fragile states, and to build a better future for all.
How will the OECD Strategy on Development fit in to the evolving new architecture? A rule of thumb will be respond to the needs of developing countries in a spirit of knowledge-sharing, mutual learning and collaboration. By making full use of the organisation’s expertise and comprehensive, evidence-based, and multidisciplinary approaches to policymaking and economic reform, the strategy will enable the OECD to strengthen its contribution to “more inclusive growth in the widest array of countries”.
The focus will be on four thematic areas for which, according to the 2011 OECD Ministerial Council, the OECD could add value to other international efforts: innovative and sustainable sources of growth; mobilising resources for development–so helping countries help themselves more effectively; promoting good governance; and measuring progress–an area where the OECD is breaking new ground.
The OECD’s multidisciplinary approach to policy issues is what is needed for addressing the wide range of cross-cutting challenges all countries face, including green growth, gender, inequality, innovation, skills, migration, infrastructure, taxation and service provision, and fighting corruption. These issues have to be linked together coherently to improve policy effectiveness and prevent unwanted spill-overs from different domestic policies from undermining development efforts. Indeed, enhancing policy coherence for development is a primary aim of the new OECD strategy. This also helps when it comes to tailoring policies for specific country circumstances.
A good example is food security. Hundreds of millions of people in the world suffer from chronic hunger. Infrastructure and technological investments, in irrigation and crops, are not keeping up, while a combination of demand and supply factors hamper availability, access, and utilisation of food. The new strategy will explore how OECD country and global policies can be better aligned with food security strategies among partner countries.
The OECD Strategy on Development offers a valuable framework for policymakers to work together more effectively, strengthen policy dialogue, promote development and seek effective solutions to global issues. It strengthens the organisation’s timeless mission to work alongside countries everywhere, and to help build better policies for better lives. Rory Clarke
OECD (2012), OECD Strategy on Development.
OECD (2011) “John F. Kennedy’s vision” in OECD Yearbook 2011.
OECD (2011), “A majestic start: How the OECD was won”, in OECD Yearbook 2011, by Rory Clarke and Lyndon Thompson.
©OECD Observer No 292, Q3 2012
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