OECD

The Organisation for Economic Co-operation and Development (OECD), known in French as Organisation de coopération et de développement économiques (OCDE), stands as a rather influential intergovernmental organisation . It’s comprised of 38 member countries, each a signatory to its founding principles, established in 1961 with the rather ambitious goal of fostering economic progress and expanding world trade . Think of it as a rather exclusive club where nations, ostensibly committed to democracy and the market economy , convene to dissect their policy triumphs and failures, wrestle with shared quandaries, and, with a degree of self-congratulation, identify best practices. It’s a platform for coordinating their domestic and international economic maneuvers, a veritable think tank for the developed world, though one might argue the “developed” label is becoming increasingly fluid.

The organization’s headquarters are nestled within the rather grand confines of the Château de la Muette in Paris, France . This very same building once housed its predecessor, the Organisation for European Economic Co-operation, which paints a rather clear picture of its lineage. The OECD is funded through contributions from its member states, the amounts varying according to… well, let’s just say complex formulas. It’s widely recognized for its prolific output of mostly economic data, disseminated through a steady stream of publications, along with its annual evaluations and rankings of its members. One can almost hear the collective sigh of relief from those who receive a favorable ranking, and the indignant sputtering from those who don’t.

Member States

The roster of OECD members reads like a who’s who of global economic powerhouses. The majority are generally characterized as developed countries , boasting high-income economies and achieving remarkably high Human Development Index scores. As of a recent tally, these member nations collectively represent a significant chunk of the global population – around 1.38 billion souls. Their average life expectancy hovers around 80 years, with a median age of 40, a stark contrast to the global average median age of 30. Economically, they are titans: as of 2017, their combined nominal Gross Domestic Product (global nominal GDP ) accounted for a staggering 62.2% of the world’s total, reaching approximately USD 49.6 trillion. When measured by purchasing power parity , their GDP was an equally impressive $54.2 trillion. The OECD also holds the status of an official United Nations observer , a nod to its global significance. Furthermore, these nations are known for their robust social security systems , with average social welfare expenditures typically around 21% of their GDP.

History

The OECD’s origins are deeply rooted in the post-World War II era. It emerged as the successor to the Organisation for European Economic Co-operation (OEEC), which was established in April 1948. The OEEC was instrumental in the distribution of Marshall Plan aid, a crucial lifeline for the reconstruction of a war-ravaged Europe. Initially, its membership was confined to Western European states receiving this aid. The OEEC’s primary objective was the allocation of American assistance, and its early Secretaries-General were the Frenchmen Robert Marjolin and René Sergent. Its administrative heart was also situated at the Château de la Muette in Paris.

Once the Marshall Plan concluded in 1952, the OEEC shifted its focus to broader economic issues. However, its coordinating role faced a significant challenge with the advent of the 1957 Rome Treaties , which gave birth to the European Economic Community and Euratom . The OEEC found itself attempting to forge a European Free Trade Area that could bridge the gap between the EEC’s Inner Six and the other OEEC member nations on a multilateral basis. In 1958, a specialized body, the European Nuclear Energy Agency , was established in response to the burgeoning field of nuclear energy and Euratom’s initiatives.

By this juncture, certain influential nations began to perceive the OEEC as having perhaps outlived its original mandate, though there was a recognition that its framework could be adapted for a more expansive, global mission. This adaptation, however, proved to be a complex and occasionally contentious undertaking. Following a series of meetings, some reportedly quite spirited, held at the Hotel Majestic in Paris starting in January 1960, a consensus emerged to create a new organization. This entity was envisioned not only to address European and Atlantic economic matters but also to formulate policies that could offer assistance to less developed countries. Crucially, this reconstituted organization would include the United States and Canada, who had previously held observer status within the OEEC, as full members. Preparations were immediately set in motion to persuade Japan to join this nascent global body.

Founding

The formal establishment of the OECD was cemented with the signing of the Convention on the Organisation for Economic Co-operation and Development on December 14, 1960. The OECD officially came into being in September 1961, absorbing the European member countries of the OEEC and welcoming the United States and Canada. Three nations – the Netherlands, Luxembourg, and Italy – though OEEC members, ratified the OECD Convention after September 1961, yet they are still acknowledged as founding members. The official list of founding members comprises: Austria, Belgium, Canada, Denmark, France, West Germany, Greece, Iceland, Ireland, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the United Kingdom, and the United States.

Japan joined the organization in 1964, followed by Finland, Australia, and New Zealand in the subsequent decade. Yugoslavia , a unique case, held observer status within the organization from its inception until its eventual dissolution as a country. The OECD also saw the establishment of several specialized agencies, including the OECD Development Centre in 1961, the International Energy Agency (IEA) in 1974, and the Financial Action Task Force on Money Laundering .

The core objectives of the OECD are clearly articulated in Article 1 of its Convention:

• To foster the highest level of sustainable economic growth and employment, along with a rising standard of living, within its Member countries, all while rigorously maintaining financial stability.
• To contribute to sound economic expansion, not only among its Member states but also within non-member countries.
• To actively promote the expansion of global trade.

Enlargement to Central Europe

The seismic shifts brought about by the Revolutions of 1989 ushered in a new era for the OECD. The organization began to actively assist countries in Central Europe, particularly those within the Visegrád Group , in their transition towards market economy reforms. In 1990, the Centre for Co-operation with European Economies in Transition was established (later evolving into the Centre for Cooperation with Non-Members). This was followed in 1991 by the launch of the “Partners in Transition” program, which offered a structured partnership to Czechoslovakia , Hungary, and Poland, explicitly including the possibility of membership. This initiative paved the way for Poland, Hungary, the Czech Republic, and Slovakia to become OECD members between 1996 and 2000, alongside South Korea and Mexico.

Reform and Further Enlargement

The reunification of Germany in 1990 saw East Germany integrated into the existing OECD membership of West Germany. Throughout the 1990s, a number of European nations, having already become members of the European Union , signaled their aspirations for OECD membership. Notably, Cyprus submitted an application in 1995, but according to the Cypriot government, its bid was effectively vetoed by Turkey . In 1996, Estonia, Latvia, and Lithuania formally expressed their desire to join through a Joint Declaration, and Slovenia also lodged its membership application that same year. By 2005, Malta had also applied. The European Union has consistently advocated for the admission of all its member states into the OECD. In 2012, Romania reiterated its ambition to join, and the government of Bulgaria confirmed its intention to apply.

To manage this expansion, the OECD established a working group, headed by ambassador Seiichiro Noboru, to devise a strategy for engaging with non-member countries. This group outlined four key criteria for potential members: “like-mindedness,” being a “significant player,” demonstrating “mutual benefit,” and considering “global considerations.” These recommendations were presented at the OECD Ministerial Council Meeting in May 2004. Subsequently, on May 16, 2007, the Council decided to initiate accession discussions with Chile, Estonia, Israel, Russia, and Slovenia. Concurrently, cooperation was deepened with Brazil, China, India, Indonesia, and South Africa through an “enhanced engagement” process. Chile, Slovenia, Israel, and Estonia all successfully joined in 2010. However, in March 2014, the OECD suspended membership talks with Russia due to its annexation of Crimea.

In 2013, the OECD opened membership talks with Colombia and Latvia. The following year, discussions commenced with Costa Rica and Lithuania. Latvia officially became a member on July 1, 2016, followed by Lithuania on July 5, 2018. Colombia signed its accession agreement on May 30, 2018, and officially joined on April 28, 2020. Costa Rica received a formal invitation to join on May 15, 2020, becoming the 38th member on May 25, 2021. Other nations that have expressed interest in membership include Argentina, Brazil, Croatia, Malaysia, and Peru.

As of January 2022, membership talks were reported to be underway with Argentina, Brazil, Bulgaria, Croatia, Peru, and Romania. In March 2022, the OECD suspended the participation of Russia and Belarus in light of the ongoing Russian invasion of Ukraine . In June 2022, the annual OECD Ministerial Council Meeting saw the adoption of Accession Roadmaps for Brazil, Bulgaria, Croatia, Peru, and Romania. More recently, in March 2024, similar roadmaps were adopted for Argentina and Indonesia, with Thailand following suit in July 2024.

Objectives and Issues

Taxation

The OECD plays a pivotal role in shaping the landscape of international taxation , particularly for multinational corporations. It establishes guidelines through its OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations, a Model Tax Convention, and rules for country-by-country reporting.

The organization publishes and periodically updates a model tax convention that serves as a template for how countries should allocate their rights to tax. This model is accompanied by detailed commentaries offering interpretations of its provisions. Generally, the model favors granting the primary taxing rights to the country where capital investment originates – the home country – rather than the country where the investment is made, the host country. This approach tends to be most effective between countries with reciprocal investment flows, such as among OECD members. However, it can create imbalances when one signatory country is significantly less economically powerful than the other, as can be the case between OECD and non-OECD pairings. Since 1995, the OECD has also published and updated its Transfer Pricing Guidelines, which provide a framework for allocating profits from inter-company transactions across different countries.

Pillar 1

This OECD proposal aims to reallocate a portion of multinational profits for taxation purposes to the countries where companies conduct business, using a specific formula. This includes markets where multinationals sell their products or services, even without a physical presence. The intention is to mitigate the need for Digital Services Tax , which several countries, including France, have implemented. Certain sectors, such as banking and extractive industries, are excluded, and there are minimum thresholds for applicability. Pillar 1 essentially proposes allocating only residual profits – those profits exceeding what is determined through transfer pricing – thereby creating a hybrid system. This is, in essence, a refinement of existing practices, combining routine profit allocation via transfer pricing with a split of residual profits.

Pillar 2

A significant development occurred on July 1, 2021, when finance officials from 130 countries reached an agreement on a new international taxation policy: a global minimum corporate tax rate of 15%. Under this framework, if a country taxes a multinational at a rate below 15%, the multinational’s headquarters country can collect the difference. The agreement mandates that major economies enact national laws requiring corporations to pay at least 15% income tax in the countries where they operate. This measure is intended to curb the practice of establishing corporate headquarters in low-tax jurisdictions. Governments anticipate recovering substantial lost revenue, estimated to be between $100 billion and $240 billion annually. This new system was strongly promoted by the Biden Administration in the United States and the OECD, with Secretary-General Mathias Cormann stating that the “historic package will ensure that large multinational companies pay their fair share of tax everywhere.”

Multinational Corporations

The OECD Guidelines for Multinational Enterprises function as a set of recommendations, legally non-binding but significant, appended to the OECD Declaration on International Investment and Multinational Enterprises. These guidelines offer principles and standards for responsible business conduct for multinational corporations operating within or from adhering countries.

Publications

The OECD is a prolific publisher, disseminating books, reports, statistics, working papers, and reference materials. Since 1998, all its published titles and databases have been accessible through OECD iLibrary . The OECD Library & Archives boasts a collection dating back to 1947, including records from its predecessor organizations, the Committee for European Economic Co-operation (CEEC) and the Organisation for European Economic Co-operation (OEEC). External researchers can access these materials on-site by appointment.

Books

The OECD releases approximately 600 books and over 400 papers annually, covering a vast spectrum of public policy topics. These publications are consistently updated on the OECD iLibrary. Most are published in both English and French. Among its flagship publications are:

• The OECD Economic Outlook , published biannually, offering forecasts and analyses of the economic situations of OECD member countries. In an exceptional move, the 2020 Economic Outlook was published on June 10, 2020, to account for the significant economic impacts of the Coronavirus pandemic, which had drastically altered forecasts since the March Interim Economic Outlook. This June edition specifically addressed the economic repercussions of COVID-19 and provided projections for potential future impacts should a second outbreak occur.
• The Main Economic Indicators , a monthly publication providing a comprehensive collection of timely statistical indicators.
• The OECD Factbook, an annual publication available online, as an iPhone app, and in print. It features over 100 economic, environmental, and social indicators, each accompanied by a clear definition, tables, and graphs. The Factbook primarily focuses on statistics from OECD member countries, often including data from other major non-member economies. It is freely accessible online, with all data provided in Excel format via StatLinks.
• The OECD Communications Outlook and the OECD Internet Economy Outlook (previously the Information Technology Outlook), which alternate yearly. These publications offer forecasts and analyses of the communications and information technology sectors within OECD member countries and select non-member economies.
• In 2007, the OECD launched the OECD Insights series with the publication of Human Capital: How what you know shapes your life. This series aimed to present important social and economic issues to a non-specialist audience, drawing on OECD analysis and data. Subsequent titles covered topics such as sustainable development, international trade, and international migration. The series was discontinued in 2017.

All OECD books are available through the OECD iLibrary, the organization’s online bookshop, or the OECD Library & Archives.

Magazine

The OECD Observer , an award-winning magazine, debuted in 1962. It was published six times a year until 2010, transitioning to a quarterly format in 2011 with the launch of the OECD Yearbook, timed to commemorate the organization’s 50th anniversary. The online and mobile editions featured news, analysis, reviews, commentaries, and data on global economic, social, and environmental challenges, alongside listings of recent OECD books. An OECD Observer Crossword was introduced in the second quarter of 2013. The final issue of the OECD Observer was published in the fourth quarter of 2019, featuring a double edition looking ahead at artificial intelligence and a cover story on why statistical offices should hire comedians. The OECD Observer website ceased operation in the first quarter of 2021, though its archive remains accessible on the OECD website.

Documentation on OECD’s Multilateral Surveillance

The OECD’s approach to multilateral surveillance underwent a significant review, first detailed in Kumiharu Shigehara’s “Multilateral Surveillance: What the OECD can offer?” published in 1996. Shigehara, who served as OECD Chief Economist and Head of the Economics Department from 1992 to 1997, and later as OECD Deputy Secretary-General, provided crucial insights into this process.

Further discussions and analyses of multilateral surveillance have appeared in subsequent works, including:

• Kumiharu Shigehara and Paul Atkinson’s “Surveillance by International Institutions: Lessons from the Global Financial and Economic Crisis” (OECD Working Papers No.860, May 2011).
• Kumiharu Shigehara’s “Multilateral Surveillance: the IMF, the OECD and G20” (Ligue Européenne de Coopération Économique, Paris, 2011).
• Kumiharu Shigehara’s “The Limits of Surveillance and Financial Market Failure: Lessons from the Euro-Area Crisis” (Palgrave Macmillan, 2014).

The historical trajectory of OECD multilateral surveillance from the 1960s to the late 1990s was also chronicled in Kumiharu Shigehara’s memoirs, published in Japanese in December 2019 under the title “the Bank of Japan and the OECD: Recollections and Reflections.” Donald Johnston, OECD Secretary-General from 1996 to 2006, noted the significance of Shigehara’s book for the OECD’s institutional memory. An English translation of these memoirs, titled The Bank of Japan, the OECD, and Beyond, was published by Palgrave Macmillan in September 2024.

Statistics

The OECD is widely recognized as a leading statistical agency , renowned for its publication of comparable statistics across a multitude of subjects. In July 2014, the OECD launched the OECD Data Portal, an online platform that provides public access to its main statistical databases . This portal allows users to generate custom charts based on official OECD indicators.

OECD statistics are disseminated through various channels:

• Interactive charts available on the OECD Data Portal.
• Interactive databases integrated within iLibrary, alongside key comparative and country tables.
• Static files or dynamic database views accessible via the OECD Statistics portal.
• StatLinks, which are URLs embedded in most OECD publications, providing direct access to the underlying data.

In July 2024, the OECD announced a significant shift towards an open-access information model, with all its data and publications now released under Creative Commons CC‑BY‑4.0 attribution licenses .

Working Papers

The OECD Secretariat publishes through approximately 15 distinct working paper series, covering the various areas of the OECD’s work. These papers are readily available on iLibrary and accessible through numerous specialized online portals.

Reference Works

The OECD is responsible for the OECD Guidelines for the Testing of Chemicals , a continually updated document that has become a de facto standard, often referred to as soft law.

In March 2008, the OECD released the OECD Environmental Outlook to 2030. This report posited that addressing critical environmental challenges – including climate change , biodiversity loss , water scarcity , and the health impacts of pollution – was not only achievable but also economically feasible.

SDG Pathfinder

In 2020, the OECD received the inaugural University Press Redux Sustainability Award from the Association of Learned and Professional Society Publishers (ALPSP) and Cambridge University Press . This award recognized the development of the SDG Pathfinder, an open-access digital tool designed to facilitate the discovery of content and data related to the Sustainable Development Goals (SDGs).

Structure

The OECD’s organizational framework is structured around three primary components:

• OECD Member Countries: Each member nation is represented by a delegation, typically led by an ambassador. Collectively, these delegations form the OECD Council. The Council, along with its standing committees, serves as the primary body for providing strategic direction and oversight to the organization’s activities.
• OECD Substantive Committees: For each area of the OECD’s work, there is a dedicated committee, often supported by various subsidiary bodies. The members of these committees are usually subject-matter experts drawn from the governments of member and non-member countries. These committees are responsible for overseeing all work within their respective domains, including the production of publications, the establishment of task forces, and the organization of conferences. The conclusions reached by these committees are then communicated back to their respective national governments.
• The OECD Secretariat: Led by the Secretary-General (currently Mathias Cormann ), the Secretariat provides essential support to the standing and substantive committees. It is organized into various directorates, employing a staff of approximately 2,500 individuals.

Meetings

Delegates from member countries regularly convene in committees and other meetings. Pierre Vinde, a former Deputy Secretary-General , estimated in 1997 that the financial burden on member countries, encompassing the cost of sending officials to meetings and maintaining permanent delegations, was roughly equivalent to the operational costs of the Secretariat itself.

The OECD frequently hosts minister-level meetings and forums. These events serve as crucial platforms for discussing a wide array of thematic issues pertinent to the OECD’s charter, its member countries, and non-member nations. Notable meetings include:

• The annual Ministerial Council Meeting (MCM), attended by the Ministers of Economy from all member countries and candidate countries engaged in enhanced dialogue.
• The annual OECD Forum, which convenes leaders from the business sector, government, labor unions, civil society, and international organizations. This forum, held annually since June 2000 in conjunction with the MCM, features conferences and discussions and is open to public participation.
• Thematic Ministerial Meetings, bringing together ministers responsible for specific policy domains (e.g., all Ministers of Labour, all Ministers of Environment).
• The biennial World Forum on Statistics, Knowledge and Policies, typically held outside the OECD premises. This series of meetings aims to measure and promote societal progress.
• The Forum for Harmful Tax Practices.
• OECD Eurasia Week, a series of high-level policy dialogues designed to share best practices and experiences in addressing common development and economic challenges across Eurasia.

Secretariat

The information, analysis, and preparatory work undertaken by the OECD Secretariat are indispensable to the effective exchange and cooperation among OECD governments. The Secretariat is tasked with collecting data, monitoring global trends, and analyzing and forecasting economic developments. Under the guidance and direction of member governments, it also conducts research into social changes and evolving patterns in trade, environment, education, agriculture, technology, taxation, and other critical areas.

The Secretariat is structured into the following directorates:

• 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 Secretary-General heads the OECD Secretariat and chairs the OECD Council. The selection of the Secretary-General is a process requiring consensus among all member states, meaning unanimous agreement on a candidate is necessary.

Secretaries-General of the OEEC

Secretaries-General of the OECD

Committees

Representatives from member and observer countries convene in specialized committees focused on specific policy areas, such as economics, trade, science, employment, education, development assistance, and financial markets. There are approximately 200 such committees, working groups, and expert groups. These committees engage in policy discussions and monitor progress within their respective domains.

Special Bodies

The OECD encompasses a number of specialized bodies, including:

• Africa Partnership Forum
• Blue Dot Network
• Business and Industry Advisory Committee (BIAC)
• Development Assistance Committee
• OECD Development Centre
• International Transport Forum (ITF) (formerly the European Conference of Ministers of Transport)
• International Energy Agency
• Nuclear Energy Agency
• Multilateral Organisation Performance Assessment Network (MOPAN)
• Partnership for Democratic Governance (PDG)
• Sahel and West Africa Club
• Trade Union Advisory Committee to the OECD (TUAC)

Voting

Decisions within the OECD are reached through voting processes that require unanimity among all participating members. Each member country holds one vote. However, dissenting members who wish to signal their disapproval without blocking a decision can opt to abstain from voting. It’s worth noting that 22 of the OECD’s member countries are also members of the European Union .

Member Countries

As of June 2025, the OECD comprises 38 member states.

Dependent Territories

Dependent territories of member states are not recognized as independent members of the OECD. However, they may be included as part of their sovereign state’s membership. As of January 2021, the Dutch Caribbean and the British territories of Guernsey , Jersey , the Isle of Man , Gibraltar , and Bermuda are incorporated into the OECD memberships of the Netherlands and the U.K. , respectively. Other dependent territories of OECD member states do not hold OECD membership.

Participating Partners

The OECD engages with several key partners who participate in policy discussions and regular OECD surveys:

• Brazil
• China
• European Union
• India
• Indonesia
• South Africa

The European Commission actively participates in OECD work alongside the EU member states. Brazil, China, India, Indonesia, and South Africa are designated as Key Partners, signifying their active involvement in OECD policy dialogues and surveys.

Negotiating Membership

The following countries are currently engaged in accession negotiations with the OECD:

• Argentina (since 2022 [122])
• Brazil (since 2022 [122])
• Bulgaria (since 2022 [122])
• Croatia (since 2022 [122])
• Indonesia (since 2024 [123])
• Peru (since 2022 [122])
• Romania (since 2022 [122])
• Thailand (since 2024 [124])

Applicants

The following countries have formally applied for membership:

• Malta (applied in 2007 [125])
• Ukraine (since 2022 [126])

Expressed Interest

Several other countries have expressed interest in pursuing OECD membership:

• Kazakhstan [127]
• Malaysia [128]
• Vietnam [129]
• Dominican Republic [130]

Former Members

• Free Territory of Trieste

The Free Territory of Trieste (specifically Zone A) was a member of the OEEC until 1954, when it was integrated into Italy and ceased to exist as a distinct entity. [15]

Accession Talks Terminated

• Belarus
• Russia

In May 2007, the OECD initiated accession negotiations with Russia. However, in March 2014, these talks were suspended in response to Russia’s involvement in the annexation of Crimea and ongoing human rights concerns. On February 25, 2022, the OECD formally terminated the accession process with Russia following its invasion of Ukraine. In March 2022, Belarus was suspended from all participation in the OECD.

Budget

The OECD operates on a biennial budget established by its member countries. In recent periods (2023–2024), its annual revenues have exceeded €900 million. The “Part I Budget,” which totals an estimated €229.9 million for 2024, represents the largest single source of revenue for the OECD. Contributions to this budget are determined by both the number of OECD members and the relative size of their national economies.

2024 Part I Budget Contribution Shares

Permanent Missions Accredited to the OECD

A significant number of OECD member countries maintain permanent missions accredited to the organization, facilitating ongoing engagement and representation. These include missions from: Austria, Canada, Chile, the Czech Republic, Finland, France, Germany, Italy, Japan, Mexico, Poland, Portugal, the Slovak Republic, South Korea, Switzerland, Turkey, and the United States.