Better Policies for Development

Better Policies for Development

Recommendations for Policy Coherence You do not have access to this content

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29 sep 2011
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9789264115958 (PDF) ;9789264115941(imprimé)

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This report examines the ways in which wider policies can be use to support our common development objectives. It focuses on areas requiring collective action by the entire international community, and complements the OECD’s continuing work on aid effectiveness and monitoring aid flows.

It starts from two premises. First, policies ranging from trade and investment to tax and fiscal transparency, corporate governance, climate change, resource security and social policy have a profound impact on the prospects for achieving sustainable development. Second, whilst these require action by national governments and regional organisations in both developed and developing countries, in today’s interconnected world they also require collective action by the entire international community.

The report covers 18 development policy topics divided into four broad categories: sustainable economic growth, economic governance, the environment and natural resource security, and society. Together these reflect the OECD’s mission to promote better policies for better lives.

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  • Foreword
    Improving development perspectives lies at the very heart of the OECD’s founding mission to contribute to economic growth and development worldwide. This report examines the way in which wider policy tools can be used to support our common development objectives, also referred to as "Policy Coherence for Development".
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  • Ouvrir / Fermer Cacher / Voir les résumés Economic Growth

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    • Macro-economic policy
      If any demonstration were ever needed of the reality of globalisation, and the interconnectedness of developed and developing countries, the economic crisis has provided it. Closer economic integration through international trade and investment brings benefits to developing and developed countries alike. But it also means that shocks hitting developed countries will have significant repercussions on developing countries – and vice versa. As OECD countries went into recession in 2008-2009, following the failure of some financial institutions and the collapse of confidence in financial markets, growth rates in developing countries fell also.
    • Trade
      Trade is a key element in the generation of the sustained economic growth necessary to raise incomes and reduce poverty1. Empirical evidence shows the strong links between trade performance, economic growth, and poverty reduction over the last 30 years, across all regions. Open economies are richer and more productive than closed economies: an increase in the share of trade in GDP of 1% raises the income level by between 0.9% and 3%.
    • Investment
      Private investment, both domestic and foreign, is key to promoting the economic growth and employment which are essential to reducing poverty. Foreign Direct Investment (FDI) is a major source of finance and an important channel for the transfer of skills and technology. It can, on the other hand, also have undesirable effects, such as when foreign investors do not follow international standards for responsible business conduct. Sources of FDI are becoming increasingly diverse. The emerging economies in the G20 accounted for only 1% of G20 international investment in 2000. By 2010 this figure had risen to 20%.
    • Financial regulation
      The financial system plays an essential role in the economy and its development by allocating credit and capital, pooling and managing risks, facilitating financial transactions, and being the conduit of monetary policy. For instance, the development of local currency bond markets and capital markets are crucial for the efficient mobilisation of domestic savings and, hence, for unlocking the growth potential of developing countries. Sound financial systems with a robust financial infrastructure attract investors and enable diverse forms of financial intermediation, providing the basis for private sector development.
    • Science, technology & innovation
      Science, technology, and innovation (STI) are crucial for sustainable long-term economic growth, both in developed and developing countries, even more so in the aftermath of the economic crisis. STI also has a major part to play in addressing the global challenges which are discussed in the following sections, including adaptation to climate change; food, water, and energy security; and health.
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  • Ouvrir / Fermer Cacher / Voir les résumés Economic Governance

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    • Overview - Economic Governance
      Development requires not just a stronger global economy, but also strengthened global economic governance and a clean business environment. This section of the report examines three interconnected issues: taxation, anti-corruption, and illicit financial flows.
    • Taxation
      Taxation is key to promoting sustainable growth and poverty reduction. It provides developing countries with a stable and predictable fiscal environment to promote growth and to finance their development needs. Combined with economic growth, it reduces long-term reliance on aid. Its key role in mobilising domestic resources was re-affirmed at the Seoul G20 Summit. It is closely linked to other areas of economic governance covered in this report: tax havens and lack of transparency in reporting of profits and tax payments paid in resource-rich developing countries are linked to corruption, financial crime, money laundering, and illicit financial flows. These issues are in turn linked to illicit trade in arms, conflict and fragility. Taxation also plays a key role in ensuring good governance by promoting the accountability of government to citizens.
    • Anti-corruption
      Corruption undermines efforts to achieve economic development. It takes place at all levels of society and business – in international business in sectors such as natural resources (energy, minerals), defence, construction, and infrastructure, as well as the health and pharmaceutical industries. It is a devastating problem at the grassroots level, where it has a profound effect on the daily lives of poor people. But in today’s interconnected world, the effects of corruption also spread far beyond where corrupt acts are committed and throughout the global economy.
    • Illicit financial flows
      Illicit financial flows from developing countries make up a significant part of the larger problem of capital flight, reducing the resources available for investment, growth, and poverty reduction and resulting in significant losses in government revenue.
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  • Ouvrir / Fermer Cacher / Voir les résumés The Environment and Natural resource Security

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    • Overview -The Environment and Natural resource Security
      Development requires not only better global economic governance but also a cleaner environment, with basic natural resources secure and used sustainably at the global level, while available to and affordable by all at the household and individual level. The following topics look at four interconnected issues: climate change, and food, water and energy security.
    • Climate change
      Tackling climate change is one of the major environmental challenges of this century. It is likely to have a profound impact on natural and social systems and therefore the prospects for economic development and poverty reduction in developing countries which, although they have contributed least to the problem, are likely to be particularly vulnerable to its effects due to their greater dependence on climate-sensitive natural resources, their high growth in potentially vulnerable locations, and the limited resources they have to cope with adverse impacts.
    • Food security
      The FAO estimated there were 925 million undernourished people as of late 2010 - a number that has likely risen with further increases in food commodity prices and volatility since then. Food security remains centre stage in international discussion. Achieving the Millennium Development Goal of halving the proportion of people living in hunger by 2015 will be difficult. Looking further ahead, the projected rise in the world’s population to 9 billion by 2050 is estimated to require an increase of 42% in global food production by 2030 and 70% by 2050.
    • Water security
      Water security embraces the issues of water stress, water quality, flood management, access to water and sanitation services, and ensuring adequate water to maintain ecosystems. This topic focuses on the issues of scarcity and access. Many parts of the world are suffering from increased competition for water as overuse and pollution reduce available sources. Climate change is creating additional pressures. In addition, global water consumption is expected to increase by 50% over the next 30 years due to factors including development, population growth, and urbanisation. The number of people living under severe water stress is expected to rise from around 2.8 billion to 3.9 billion by 2030, of which nearly 3.5 billion will live in developing countries. Over 1 billion people still lack access to safe drinking water and 2.6 billion are without access to adequate sanitation.
    • Energy security
      We live in a world of growing energy demand and interdependence. Energy security is central for sustainable economic growth and poverty reduction. It is also inextricably linked to other global challenges: energy systems are the major contributors to climate change, representing around 60% of total current greenhouse gas emissions. But despite rising global energy use, many developing countries lack access to adequate, affordable and reliable energy supplies, severely constraining growth, productivity, and employment. Many poor households still have no access to modern energy services. The IEA World Energy Outlook 2010 (IEA/WEO, 2010) estimates that 1.4 billion people around the world still lack access to electricity, projected to fall only marginally to 1.2 billion by 2030. Some 2.7 billion rely on the traditional use of biomass, with a projected increase to 2.8 billion in 2030.
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  • Ouvrir / Fermer Cacher / Voir les résumés Society

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    • Overview - Society
      Development is ultimately about people and improving their lives. This section of the report examines six topics, starting with conflict and fragility, moving on to the four interconnected issues of labour, education and skills, migration, and health, and concluding with the theme of measuring progress in societies.
    • Conflict and fragility
      While many countries are making progress towards achieving the Millennium Development Goals (MDGs), a group of countries affected by weak capacity, problematic state-society relations, deep social divides and/or the legacy of violent conflict is lagging 40 to 60% behind other low and middle-income countries in MDG achievement. It is in these countries that one billion of the world’s six billion people live, where half of the world’s children die before the age of five, and one third of all people live on less than USD 1 a day. About 35 of the countries considered fragile in 1979 were still fragile in 2009, and the gap with other developing countries has been widening since the 1970s.
    • Labour
      Labour issues are central to the prospects for achieving fair and sustainable development. The ILO estimates that more than a billion women and men are unemployed, underemployed, or working poor. An estimated 300 million new jobs will be needed by 2015 to absorb new entrants to the labour market, most of them youth and women. But even among those at work, earnings, working conditions and career prospects are often meagre. Around 40 to 45% of the world’s employed are unable to earn enough to lift themselves and their families above the USD 2 per day poverty line, and millions work in hazardous conditions. Throughout the world, the poorest and least protected – often women, children, the low-skilled and migrants – are among the most affected. More than 200 million children in the world today are involved in child labour, and at least 12.3 million people are trapped in forced labour.
    • Education and skills
      Progress in education, training, and human resource development are essential for achieving sustained economic growth and poverty reduction, and for responding to the changes in technology and demographics that are re-shaping labour markets. Education improves productivity, employability, nutrition and healthcare, and general prosperity. Education systems need to provide equitable opportunities – starting in early childhood and continuing throughout life. They need to equip people with knowledge, skills and tools to stay competitive and engaged. Within this broad framework, specific targets on primary education are set out in the MDGs: universal primary education and the elimination of gender disparity in primary education. There is a strong link between the gender disparity target and other topics: lack of education for girls contributes to high adolescent birth rates, jeopardising health and holding back social and economic advancement.
    • Migration
      It is estimated that more than 200 million people, or around 3% of the world’s population, live outside their country of birth. This figure includes migration in all directions, both within the South and the North, and between the South and North. Within this overall figure, total migrants from developing countries are around 171 million. Available data suggests that nearly half of this total reside within other developing countries (mainly immediately neighbouring countries). A similar number (around 75 million) reside in OECD countries.
    • Health
      Good health and health care are essential not just for economic and social development but in their own right, and as a gender issue. Three of the eight MDGs focus on health: child mortality, maternal health and fighting HIV/AIDS and other diseases. Although average life expectancy has increased over recent decades in most countries, many statistics remain shocking. Child mortality has been reduced significantly but pneumonia and diarrhoea continue to kill 3.8 million children each year, despite both conditions being preventable and treatable at reasonable cost. Inadequate access to clean water and sanitation accounts for 1.8 million child deaths each year. Infectious diseases respect no boundaries as shown by the recent SARS and influenza epidemics.
    • Indicators of progress
      Development is ultimately about people and improving their lives. Economic growth is a central but not the only factor in creating better lives. Measuring progress needs to consider a much wider range of indicators, such as health and environmental conditions, education levels, as well as areas that are intrinsically more difficult to measure, such as subjective well-being. Monitoring this progress requires both reliable statistical data and assessment frameworks based on internationally agreed goals. Since 1990, the UNDP has been monitoring progress in all countries with the Human Development Index (HDI), and, since 2000, the UN and the World Bank have been compiling data and producing indicators to monitor progress towards the Millennium Development Goals (MDGs).
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