Organization for Economic Cooperation and Development (OECD)

• DATE: Establishing treaty signed December 14, 1960; took effect September 30, 1961

With a membership consisting of thirty-eight of the world’s industrialized countries as of 2023, the Organization for Economic Co-operation and Development (OECD) is a forum for intergovernmental policy discussions and policy coordination as well as a “think tank” that researches and publishes information on a variety of worldwide economic, financial, and environmental problems and resource issues.

Background

The OECD was created as a successor to the Organization for European Economic Co-operation (OEEC), which had been established in 1948. At that time, the OEEC had only two members, the United States and Canada; it was formed to coordinate the distribution of Marshall Plan aid following World War II. Today, the organization's goals are to assist its thirty-seven member countries in helping their citizens reach better standards of living and developing sustainable economic growth, while also contributing to the economic development of nonmember countries. The OECD is also concerned with maintaining the free flow of international trade, human resources, scientific knowledge, and financial capital; promoting development in industry and agriculture; and protecting the environment.

Headquartered in Paris, France, the OECD conducts extensive research and publishes on a broad range of economic issues. The OECD also has centers in Germany, Japan, Mexico, and the United States. It has worked with developing nations to help them enter the world free-market system.

In 1994, Mexico became the first new member of the OECD in twenty-one years. It was followed by the Czech Republic in 1995; Hungary, Poland, and South Korea in 1996; and Slovakia in 2000. Four more countries—Chile, Estonia, Israel, and Slovenia—joined in 2010. New countries became members in subsequent years: Latvia (2016), Lithuania (2018), Columbia (2020), and Costa Rica (2021).

The OECD's Global Relations Secretariat (GRS), previously the Centre for Co-operation with Non-Members, was created to promote and administer relations with nonmember countries; through the CCNM, the OECD has a working relationship with numerous nonmember countries on all six inhabited continents. In 2007, the OECD established its "enhanced engagement" program, aimed at strengthening ties with nonmember countries Brazil, China, India, Indonesia, and South Africa, which the organization designated "key partners."

The governance of the OECD is composed of three major bodies: the OECD Council, the OECD Secretariat, and the various committees. The Council consists of the ambassadors and attendant delegations of each member country and is an overriding body with decision-making powers. The Secretariat is managed by the secretary-general, who is supported by deputy secretaries-general and a staff of around 3,300 employees. It is organized into fifteen directorates, each of which provide research and analysis on a given topic, such as education, economics, or trade and agriculture. The committees, of which there are over 300, are working groups consisting of experts from various member and nonmember countries that promote ideas, review scientific progress, gather information in specific policy areas, and develop guidelines and codes. Committee meetings are attended by delegates and other senior officials from member countries. The OECD disseminates information about member countries’ economic indicators and the issues that their economies face. The OECD committees and working groups focus on areas such as public governance, trade liberalization, policy reform and development, managing new and evolving technologies, and social protection.

In early 2022, OECD announced that it was in talks with several countries, including Argentina, Brazil, and Romania, about possibly joining the organization. Later that same year, OECD suspended Russia and Belarus for their involvement in the invasion of Ukraine. In 2024, roadmaps for membership were established for Argentina, Indonesia, and Thailand.

Impact on Resource Use

A number of OECD committees work on issues of natural resources, energy, environment, and sustainable development . The Committee on Energy Research and Technology consists of five working parties and expert groups that study both conventional and alternate sources of energy in order to lessen reliance on oil and encourage the development of multiple energy sources. Among the Committee for Agriculture’s subsidiary bodies is the Fisheries Committee, which is concerned with such issues as maintaining healthy aquatic ecosystems, conserving and sustaining fishery stocks, and promoting responsible trade.

During the annual Green Growth and Sustainable Development (GGSD) Forum, experts from various disciplines come together to work on issues of environmentally sustainable economic growth and development. The GGSD Forum encourages countries to mainstream sustainable development approaches and policies into their development strategies. Each year's event focuses on a different theme; the 2013 forum addressed strategies for encouraging investment in green growth, while the 2019 topic was the innovation and fiscal implications of greening heavy and extractive industries.

Climate change is the most pressing environmental issue with which the OECD continues to work. A meeting held in May 2009 attended by high-level representatives from all member countries and the five countries then being considered for membership endorsed a major report to provide guidance for the adaptation to climate change in development cooperation activities. In addition, the meeting delegates laid out a road map on how to create better working partnerships between the environment and the development communities. One of the priorities of the OECD is to help member countries integrate their responses to climate change into their development strategies.

The OECD also conducts analysis of the links between environmental, economic, and social issues in order to promote sustainable development in the members and nonmember countries. The OECD has a number of publications on this and related topics, including the impact of the environment on employment, human health, and how government policies affect the environment.

The OECD has extensive publications on the subject of water resources and their sustainable management. One of the issues that some countries face is the poor management of water resources that support human consumption, ecosystem needs, and agriculture production. The OECD reports that to achieve the goal of cutting in half the number of people worldwide without access to safe water and sanitation services by 2050, countries need to develop better management of water supplies, put good governance structures in place, provide reliable financing, and involve the private sector.

Since the inception of the organization, the work done by the OECD has been geared toward providing a framework and a forum in which member countries can compare their experiences, get answers to their problems, and coordinate their policies in the five major areas of the OECD’s activities. Over the years, the OECD has provided valuable information and data on social, environmental, agricultural, and financial issues, as well as many other issues, about its member countries.

Bibliography

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