Browse by: "2007"

The Chinese government has undertaken extensive reforms to its civil service system over the past ten years. The capacity of the civil service has improved, but perhaps due to reasons other than civil service reform. This article reviews the government reforms in the context of the particular nature of the Chinese civil service system, and makes recommendations for further reforms.

Collective pension funds (CPFs) – occupational pension funds that cover the employees of more than one employer (enterprise) – have been operating in OECD countries for decades. Generally speaking, there are two models, i.e. closed pension funds, with membership restricted to a particular industry or group of industries, and open pension funds, open to all types of companies. The governance structure of such funds also operates in two ways – via an internal model (with trustees appointed by employers and employees) and an external model (with professional, commercial trustees). In this report, we first describe and analyse how CPFs are operated in selected OECD countries and non-OECD economies. Then, we review occupational pensions (or Enterprise Annuities – EA – in Chinese terminology) in general and CPFs in particular. Given the problems holding back the development of EA plans among small and medium-sized enterprises (SMEs) in China, and bearing in mind both China’s specific situations and international best practices, we propose a number of policy recommendations to promote the development of CPFs covering the SME sector. Our practical policy recommendations include: 1) industry funds with more open membership; 2) establishment of new purpose-built industry funds; 3) establishment of new regional EA administration centres acting as independent pension councils (trustees) for open pension funds; 4) in parallel to these policy initiatives in China, commercial trustees should be encouraged to establish CPFs targeting the SME sector.

This paper by the Congressional Budget Office examines two reports on fiscal policy in the United States: the budget and the government’s financial statements. The reports differ in concept and scope. Neither provides all of the relevant information about federal finances, but together they offer a more comprehensive perspective on the fiscal implications of present policies.

We evaluate techniques for comparing the ability of Markov regime switching (MRS) models to fit underlying regimes of a series of interest. This is particularly important in the business cycle literature where one may be interested in determining whether using leading indicators to allow transition probabilities to vary improves the ability of MRS models to fit the NBER business cycle chronology. This is typically done using the quadratic probability score, or QPS (Diebold and Rudebusch, 1989). Although it is possible to statistically compare the QPS statistics for two MRS models using the Diebold and Mariano (1995) (DM) test statistic for comparing forecasts, we find using a Monte Carlo experiment that the DM statistic tends to under-reject (the null of "no difference in forecast accuracy") when comparing MRS models. This we believe is because of the strong non-normality of the forecast errors of such models. Furthermore, using simulation-based inference we demonstrate that leading indicators improve the fit of an MRS model of the US business cycle chronology by 24 percent, such improvement having a p-value of 0.001.

This report on Mexico’s competition law and policy, which was the foundation for a peer review examination in early 2004, is a follow-up to a 1998 OECD assessment. Mexico’s competition commission (“CFC”) has become a mature and well-respected agency; however, the degree of general support for competition policy in Mexico remains an open question. The CFC has encountered problems in the courts, and its resources have declined despite an increasing workload. The 2004 report and peer review recommended a number of changes in operations and law to make enforcement and advocacy more effective. In 2006, Mexico revised its basic competition law to incorporate many of these recommendations, such as strengthening investigative powers for onsite inspections, increasing sanctions (including the possibility of orders to divest assets in case of serious, repeat violations) and providing for Senate approval of appointments to the CFC. In response to court rulings that some applications of the previous law were unconstitutional, the revised law now specifies when practices such as predatory pricing, exclusive dealing, cross subsidization and price discrimination would be violations. The merger notification system has been simplified. The amendments have also strengthened the CFC’s roles and powers of advocacy and policy advice in dealing with legislation, regulatory proceedings and other levels of government.

Swiss competition policy has traditionally been relatively lenient and low profile. The impact of competition policy on economic development has therefore been at best neutral. As the slow rate of growth becomes an issue, however, a more vigorous approach to competition has been identified as an important factor for improving growth prospects. The 2003 reform of the Cartel Act strengthened Swiss competition law, in particular by introducing direct sanctions for the most serious infringements and a leniency programme, thus bringing it closer to that of the European Union and of many other OECD countries. The Swiss Competition Commission has been given considerable new powers to combat private restraints of competition. Comco will have to enforce the new laws resolutely and step up action to promote regulatory reforms. In doing so, it is burdened by institutional arrangements and mechanisms that temper its full independence. The Swiss competition enforcers do not benefit from the networks of exchanges available to national competition authorities in EU member States. Matters are further complicated by a relative lack of resources. Strengthening competition is key for an effective internal market. The amendments to strengthen the Cartel Law and pending reform proposals signal determination on the part of the Confederation to tackle the problems. This report served as the basis for a peer review in the Competition Committee in 2005.

Competition policy played a central role in the development of the EU and its institutions. The European Commission, supported by the European courts, developed the framework for competition policy in Europe. This framework has been built since the Treaty of Rome in 1957 on a foundation of promoting market opening while strengthening the institutions of the European Community. The competition policy of the European Community is now in transition toward a basis in market-centered economic considerations, as well as on application through the now-extensive network of nationallevel authorities. The “modernisation” reforms of the enforcement process became effective in May 2004, along with changes in the control of mergers, and the Commission has been considering revisions to its policies about other topics, notably abuse of dominance and state aid. As the Member States adapt their substantive rules to those of the Community, the roles of the European Commission, the national competition agencies and the courts are changing. Co-ordination of enforcement among many agencies in the European Community, particularly concerning applications for leniency as part of cartel investigations, is increasingly important. The Commission moved to strengthen its capacity for economic analysis and to correct weaknesses in its decision process that had been revealed in critical court decisions. The challenge to this system, well adapted for administrative application, is to produce results that are convincing to the courts while maintaining policy consistency in a system of decentralised enforcement. This report served as the basis for a peer review in the Competition Committee in 2005.

The Competition Committee (WP2 on Competition and Regulation) hold a roundtable discussion in June 2004 on Competition and Regulation in Agriculture: Monopsony Buying and Joint Selling. Monopsonistic purchasing practices and joint price-setting activities in the agro-food sector were examined, with a particular focus on regulation and on the potential improvements that could arise from more pro-competitive regulations. Joint activity by producers can have a number of beneficial effects, such as from promoting a brand or food that would not otherwise be promoted, promoting a style of production (like organic production) or purchasing in large quantity in order to obtain quantity discounts. Harms may arise when the joint activity involves price or qualitysetting and there is little competition from close substitutes. Cartellike activity by producers has often been supported by governments but is unlikely to achieve stated public policy goals because it often leads to higher consumer prices but enhance land values more than farmer income. Potentially monopsonistic purchasing practices in the agricultural sector were also considered. At times, price manipulation by large purchasers may occur. Competition authorities play an important role in assuring that activities of purchasers do not involve market power, particularly when purchases are concentrated in few, large firms and sellers have limited options besides selling into a highly concentrated market. However, to the extent that purchasers wish to contract for very specific forms of production, such as specific varieties of grain, there can be good commercial reasons that a purchaser would wish to focus on a specific forms of production and agriculture products should not be considered different from supplies in other sectors, which are customized for different purchasers.

Because of the high percentage of national income and government budget typically associated with the provision of hospital services and because there is substantial evidence of hospital services could often be delivered more efficiently than they are, a number of OECD countries have increased the extent to which competitive mechanisms are adopted to increase the efficiency of hospital care delivery. Hospital services are complex set of products and services than comprise many different types of patient-oriented activities and not all services are equally subject to competition. For some services, such as emergency services, a hospital may have few if any competitors. For other services, such as inpatient scheduled surgeries, a hospital may compete for patients with other hospitals that offer comparable care. For still other services, such as diagnostic services, specialist consultations and outpatient services hospitals may at times compete with diagnostic centers, doctors’ offices and ambulatory surgery centers. Competition between providers of hospital services can have a number of impacts, including reducing excessive hospital stays, reducing costs of providing care and improving quality of care. Mechanisms for increasing competition or market forces identified in this paper include: collecting and distributing improved information on provider performance; supporting new entry when entry and exit costs are low; encouraging independent or private operation of facilities; improving allocation of human resources, particularly through reducing anticompetitive restrictions by professionals; introducing prospective pricing in combination with benchmarking; physician-led purchasing; providing for greater consumer choice, particularly when waiting lists are long; introducing contestable management of hospitals; and applying competition law in circumstances where public policy focuses on pro-competitive mechanisms. A competitive mechanism that might work in one system will not necessarily transfer well to another. Moreover, competitive mechanisms may at times increase costs. As health policy makers increase reliance on competitive mechanisms, they may need to think carefully about structural market conditions and potentially involve competition authorities when it appears that participants in the market are acting to restrain or eliminate competition.

The most important strategic tasks of Hungarian economic policy are to complete the process of European integration, to build up the appropriate institutional and social capacities and to harmonise real and nominal convergence. This article discusses a theoretical framework for modernisation and how it could be adapted to the Hungarian public sector. Several action scenarios are discussed, but any reforms should aim to rethink the role of the state and improve competitiveness while maintaining social cohesion.

This consensus document addresses compositional considerations for new varieties of sunflower by identifying the key food and feed nutrients and anti-nutrients. A general description of these components is provided. As well, there is background material on the production, processing and uses of sunflowers and considerations to be taken when assessing new sunflower varieties.

The OECD's Working Group on Harmonisation of Regulatory Oversight in Biotechnology decided at its first session, in June 1995, to focus its work on the development of consensus documents that are mutually acceptable among Member countries. These consensus documents contain information for use during the regulatory assessment of a particular product. In the area of plant biosafety, consensus documents are being developed on the biology of certain plants species, on specific genes and resulting proteins that when introduced into a plant result in the expression of specific traits and on issues arising from the use of general trait types in plants. This document addresses the general information concerning the ä-endotoxin genes and their protein toxin products that confer insect protection to plants.

The environmental safety/risks of transgenic organisms are normally based on the information on the characteristics of the host organism, the introduced traits, the environment into which the organism is introduced, the interaction between these, and the intended application. The OECD’s Working Group on Harmonisation of Regulatory Oversight in Biotechnology decided at its first session, in June 1995, to focus its work on identifying parts of this information, which could be commonly used in countries for environmental safety/risk assessment to encourage information sharing and prevent duplication of effort among countries. Biosafety Consensus Documents are one of the major outputs of its work.

Consumer sentiment surveys are regularly conducted in at least forty-five countries. The surveys are based on the premise that data on consumer expectations represent a leading indicator of future changes in the macro economy. A series of Granger causality tests indicated that measures of consumer sentiment both predict and are predicted by a wide range of economic variables, although the data exhibit substantial differences across countries and across variables. The predictive performance was not found to be directly related to differences in sampling, question wording, or index construction. Several recommendations are given to enhance the predictive performance of consumer sentiment. First, a new conceptualization of consumer sentiment is now warranted based on changes in the knowledge and sophistication of consumers, the increased availability of economic information, shifts in the composition of demand, and changes due to an aging population. New survey measurement techniques are needed as well. Preliminary data on numeric probability scales indicate that there are advantages and disadvantages to a shift away from the now commonly used verbal likelihood scales. Second, new analysis models are proposed that would disaggregate consumer spending into its components as well as disaggregate the consumer data into separate demographic and economic subgroups. Third, changes in the survey administration are proposed. The shift away from telephone surveys will be due to falling response rates, especially among younger adults; the shift toward internet surveys will be due to their greater capacity to handle much more complex measurement strategies. Finally, the very notion of worldwide harmonization must also evolve; shifting its main focus from the input questions to the output indices so as to encompass a greater range of diversity in measurement methodologies. The basic premise of the consumer sentiment surveys has been affirmed by past measurements, and with appropriate developments, the consumer sentiment surveys can provide even more robust and timely forecasts of trends in the macro economy in the future.