Browse by: "2008"

This is the second in a series of three annual papers that the OECD is publishing in preparation for its major biennial publication, Government at a Glance. This paper focuses on two main themes: (1) the identification of core data for Government at a Glance, and (2) the publication of existing data that help assess the efficiency of government. It recommends that the main focus of the future publication should be on public administration. Core data to be included in “Government at a Glance” entails indicators on government revenue and expenditure structures; employment and compensation in the public domain; executive governance outcomes; and institutional arrangements such as budget procedures, HRM practices, performance management, and e government, including the quality aspects of them, called machinery of public administration outputs and outcomes (i.e. intermediate outputs and outcomes). Information on the structure of government is also suggested for inclusion since this is an antecedent to and/or constraint on government action

Informal employment persists, even when the economy is growing. Understanding the phenomenon is necessary to “tame the beast” of informality. Coherent policies are needed to create decent jobs and provide social protection

Oil is the main component of transport fuel. As for now, however, crude oil price (FOB-Free on board) accounts for less than a fifth of transport costs. Operating costs, wages and taxes cause the remaining four fifths. Nevertheless, oil scarcity may raise fuel costs to such a level that transport companies and citizen may suffer significant adverse impacts. A multiplication by 8 of the price of oil (compared to 2007) would double road transport cost. Yet, the rise would be global, which would enable operators to shift the cost to their clients without suffering changes in competition. Still, small operators that would not be in a position to optimize truck loads and routes would be threatened. Major oil price rise would mainly affect two aspects of mobility: aviation and private motoring. Air companies have added a special oil charge to ticket cost while changes in private motoring, which uses approximately as much fuel as air per passenger – kilometre, may lead to a situation where only the wealthiest citizens may keep driving.

This paper summarizes and organizes presentations and discussions of the Round Table on Macro-, meso and micro infrastructure planning and assessment tools, that took place at Boston University, on 25 and 26 October 2007. The goal of the meeting was to investigate how recent research on direct and wider economic impacts of investment in transport infrastructure can be used to improve the practice of transport projects appraisal. While the potential importance of “wider benefits” is clear, it is less obvious that attempts to quantify them should be part of all projects appraisals. Timely availibilty of results of simpler approaches might approve the quality of decision-making just as much. And when wider impacts are part of appraisal, their quantification should follow consistent procedures. Policy-oriented research should focus on these procedures, not on producing general results, as the latter are thought to be irrelevant to policy, to the extent they exist.

Many countries around the world are partly prefunding their otherwise pay-as-you-go (PAYG) financed social security systems by establishing or further developing existing public pension reserve funds (PPRFs). Most OECD countries have put in place internal and external governance mechanisms and investment controls to ensure the sound management of these funds and better isolate them from undue political influence. These structures and mechanisms are in line with OECD standards of good pension fund governance and investment management. In particular, the requirements of accountability, suitability and transparency are broadly met by these reserve funds. However, some specific details of the funds’ governance and investment management could be improved in a few countries, such as enhancing the expertise in the funds’ governing boards and constraining discretionary interventions by government. Such reforms will ultimately raise the long-term investment performance of the funds and the solvency of social security systems.

In developed countries, transport generates approximately 25 to 30 per cent of emissions of CO2, the main greenhouse gas (GHG) and these emissions are increasing sharply. There are two explanations for the increase in emissions from transport: the first is dependency on the internal combustion engine for transport with no wide-scale economically viable alternative available in the medium term; the second is the sharp increase in vehicle-kilometres travelled, which seems to be an inherent feature of economic development. One might well ask, given announcements that oil reserves will run out rapidly, whether we should not simply wait until reserves dry up to obtain a reduction in transport-related emissions. This said, rising oil prices are gradually making it more viable to exploit unconventional reserves, leaving aside innovations in technology which are reportedly opening up prospects for new fossil fuels (including fuels derived from coal, which is in plentiful supply world-wide). Hence, there is every reason to believe that the use of fossil fuels could continue on a large scale in the future. Foresight studies show that if our aim is to achieve ambitious GHG emission control targets for transport within the next few decades, the policies we implement will have to be more determined: among other things, they should aim at reducing total consumption that is to say vehicle kilometres travelled, not just unitary vehicle consumption (cf. ENERDATA and LEPII, 2005 for France, for instance). Among the measures identified, carbon taxes and vehicle taxes are the most cost-effective (OECD, 2007; Parry et al., 2007). However, the “fuel tax protests” of September 2000 in several European countries show that public opinion is very resistant to fuel tax increases (Lyons and Chatterjee, 2002). This resistance can also be explained by concerns about fairness, since many households depend on the car for day-to-day living and for getting to work. As well as this, fuel tax increases would require the international harmonization of fuel taxation in different countries, which seeing what has happened in the European Union appears to be extremely difficult.

China helps growth and debt sustainability in Africa through debt relief, infrastructure investment and higher exports. China and other emerging lenders should engage in a debt transparency initiative that considers such growth effects. This will encourage emerging lenders to co-operate with the ‘international community’ on Africa’s debt sustainability.

The southern Mediterranean region faces one of the most important water crises in the world. The combination of aridity, foreign dependency, climate change, misallocation of the resources and escalating human demand make water supply a primary issue for health, economy and poverty reduction. In this context, institutional reform of the water supply sector is of great interest. Thus, the aim of this study is to examine the water regulatory framework in southern Mediterranean countries and the development of private sector participation in the context of water crisis. The first part of the study presents the scope of private sector participation in water supply and its different forms around the world. An extensive review of 22 empirical tests and 48 case studies on the effect of private sector participation in water services has been conducted. This survey shows that private sector participation, per se, in water supply does not systematically lead to gains in efficiency. Reforming the institutional framework is an essential prerequisite for delegating water services. Afterward, the paper focuses on the southern Mediterranean region. It compares institutional arrangements, recent regulatory reforms and experiences with private sector participation in water infrastructure in Algeria, Egypt, Jordan, Morocco and Tunisia...

Among economists and policy makers more general, the fuel efficiency standard for cars and the fuel tax have been the subject of extensive debate. The major benefits of stricter fuel efficiency standards and higher fuel taxes are the reduction of Greenhouse gas emissions and the reduced oil dependence. The major costs are the increased production cost, the reduced comfort and the negative impact on mileage related externalities (congestion, accidents) due to the rebound effect. In this contribution we use a wider framework than Harrington (2008), Plotkin (2008) and Raux (2008) to discuss the CO2 1 emission reduction in transport. In section 2 we analyze, for the EU, the effects on welfare and CO2 emissions of pricing all transport activities according to their full social costs. In section 3, we go beyond the transport sector and compare the options to reduce emissions in the transport sector with the possibilities and costs to reduce emissions in other sectors of the economy. In section 4 we take a world view and analyze the impact of two types of international climate negotiations on the emission reduction strategy in the transport sector.

This paper summarizes and organizes presentations in the Round Table's presentations and discussions, draws conclusions when possible, and points out where opinions differ. It is divided in three main sections. First, the presentations and discussions provided an overview of the advances, promises, and pitfalls of current research on the economic impacts of investments in transport infrastructure. a first recurring theme was that advances in the analysis of "wider impacts" were acknowledged, but their transferability across projects was questioned, so there are "no simple rules" for generalizing results. Moreover, routine analysis is difficult because of shortcomings both in data availability and in the analytical framework. This theme is developed in some detail in section two. A second recurring issue was the major differences in the approach to transport project appraisal between countries. The impact of economic appraisal on policy decisions varies greatly from one region to another and this has consequences for the way wider economic impacts might be taken into account.

This paper provides a fresh look at informal employment, a phenomenon of renewed interest to policy makers and researchers alike. It finds that informal employment is likely to stay, is sometimes a voluntary choice, can offer better working conditions than formal employment and is very heterogeneous and diverse. Reasons for these puzzling facts and trends are discussed by focussing on incentives and constraints determining labour market outcomes. “Reloading” informal employment argues for a re-thinking of the current policy agenda and maps out important further directions for research.

This paper will trace the development of modern regulation of emissions, both local and global, from motor vehicles. To illuminate the principal themes of this story the focus will be on the experiences of the United States and Europe. Among those themes, three stand out, questions that sooner or later must be considered in the development of any environmental policy. First, the theme of federalism. In every country, governments are constituted at various levels of aggregation, from local to national. Which level of government is the most suitable for attacking a given public problem. If different levels of government can fairly claim to have a role in addressing the problem, how will the various responsibilities be assigned and coordinated? In order to develop an effective and efficient public policy, the governments must have both the right incentives and the capacity to do so. Finding the right level of government to address an environmental problem is a tradeoff between two competing considerations. The government’s jurisdiction must be large enough to “internalize the externalities,” as an economist would say. That is, if either the environmental evil or the policy remedy has effects that extend beyond its borders, then the policy-maker’s incentives will very likely be inappropriate. For example, policies to control emissions of stationary-source air pollutants may not be stringent enough if most of the effects of pollution are experienced in neighboring jurisdictions. At the same time, the level of government must be appropriate to the problem. Smaller, more local units of government are more likely to know the preferences of their citizens, yet less likely to have the expertise and experience to deal effectively with particular problems. The second pervasive theme here is the choice of policy instrument: the specific mechanisms used to achieve the environmental objective. It is common to pose two polar types: direct regulation and economic incentives (EI). Rather than commands or requirements, EI instruments provide penalties or rewards to encourage behavior that will improve environmental quality. Another way of putting the difference is this: With direct regulation, there is a bright line that determines whether behavior will be tolerated. With EI, the relationship between performance and consequences is continuous and gradual. There is no bright line, just steadily increasing rewards for better performance.

La croissance de nombreux pays africains attire, à un niveau sans précédent, les capital-risqueurs et les investissements boursiers sur le continent. Cet engouement nouveau des investisseurs est favorisé par un environnement, économique et politique, qui devrait aller en s'améliorant.

Sovereign Wealth Funds (SWFs) are pools of assets owned and managed directly or indirectly by governments to achieve national objectives. These funds have raised concerns about: (i) financial stability, (ii) corporate governance and (iii) political interference and protectionism. At the same time governments have formed other large pools of capital to finance public pension systems, i.e. Public Pension Reserve Funds (PPRFs). SWFs are set up to diversify and improve the return on foreign exchange reserves or commodity revenue, and to shield the domestic economy from fluctuations in commodity prices. PPRFs are set up to contribute to financing pay-as-you-go pension plans. The total of SWF pools is estimated at around USD 2.6 trillion in 2006/7, and is getting bigger rapidly, owing to current exchange rate policies and oil prices. The total amount for PPRFs is even larger, around USD 4.4 trillion in 2006/7, if the US Trust Fund is included (USD 2.2 trillion if excluded). SWFs and PPRFs share some characteristics, hence give rise to similar concerns. However, their objectives, investment strategies, sources of funding and transparency requirements differ. There is concern about strategic and political objectives of SWFs, and their impact on exchange rates and asset prices. But SWFs also provide mechanisms for breaking up concentrations of portfolios that increase risk. Enhancing governance and transparency of SWFs is important, but such considerations have to be weighed against commercial objectives.

Alors même que la croissance est là, l’emploi informel se maintient. Il faut comprendre ce phénomène si l’on veut le « dompter ». Seules des politiques cohérentes fourniront des emplois décents et une protection sociale.

This paper examines the relationship between household structures, the institutions that shape them and physical and human capital accumulation using household and individual data from China, Indonesia, Côte d’Ivoire and Ghana. Household structures differ greatly across countries and are very diverse within countries. In the two African countries studied a large share of the population live in extended households and/or polygamous ones. Such household structures are the exception or even absent in the Asian cases, where nuclear monogamous households prevail. This paper finds that polygamy is negatively related to capital accumulation. Wealth per capita is significantly lower in polygamous households even after controlling for income, age and literacy of the household head. A first analysis of the possible channels suggests that the larger size of polygamous households plays an important role. A similar result is found for education: enrolment rates are never higher but frequently lower in these households. The diversity across countries demonstrates that polygamy has very different meanings across societies...

Policy makers everywhere want to know about the social and economic impacts of ICT. The aim of this paper is to examine statistical issues associated with their measurement and to suggest areas for future work.

This paper is the fourth of four country case studies which is a part of a broader research programme addressing trade and structural adjustment issues in non-member economies which was conducted as a follow-up to Trade and Structural Adjustment: Embracing Globalisation (OECD, 2005) which identified policies for successful trade-related structural adjustment. This paper studies the trade liberalisation experience of Thailand from the 1970s. The report consists of 6 main sections; Section 1 provides the introduction, while section 2 provides an overview of Thailand's growth experiences. Section 3 takes a closer look at the trade liberalisation and investment policies in Thailand: Thailand's initial trade regime and three phases of trade liberalisation: (1) initial tariff reforms (1982-84), (2) comprehensive tariff reform and its reversal with the Asian financial crisis (1993-), and (3) post crisis reforms (1999-) are studied. Section 4 looks at the changes in the investment and trade structure, while section 5 takes a closer look at structural adjustment in three sectors, the automotive and auto-parts sector, textile and clothing, and the telecom services sector. Section 6 concludes with lessons learnt. Thailand's experience confirms that a sound macroeconomic environment, sustainable public finances, a relatively stable political and economic environment, flexible labour markets and reliable infrastructure are crucial for economic growth. It provides an example of gradual trade liberalisation, and demonstrates the benefits of openness to international trade and foreign investment in correcting distortions in the economy.

Dans le cadre de son travail sur le régionalisme, la Direction des Échanges et de l'Agriculture de l'OCDE, a mené à bien une série d'études comparant les dispositions normatives contenues dans les accords commerciaux régionaux à celles de l'Organisation mondiale du commerce (par exemple dans le domaine des services, de l'investissement et de la concurrence). Le présent document entend compléter les études existantes en examinant les dispositions juridiques relatives aux « obstacles techniques au commerce » (autrement dit, les règlements techniques, les normes et les procédures d'évaluation de la conformité) d'un échantillon d'accords commerciaux bilatéraux et régionaux ainsi que leur degré de similarité et de convergence avec l’Accord de l'OMC sur les obstacles techniques au commerce, et entre eux. L'étude révèle que la plupart des dispositions relatives aux obstacles techniques au commerce (OTC) qui sont contenues dans les accords bilatéraux et régionaux convergent vers le système commercial multilatéral. Lorsqu'ils sont effectivement mis en oeuvre, les accords commerciaux visant une intégration et une coopération réglementaire accrue entre les parties peuvent venir compléter et renforcer l’application de l'Accord de l'OMC sur les obstacles techniques au commerce en donnant une impulsion à l'amélioration des pratiques réglementaires et du dispositif relatif aux OTC des pays membres (par exemple par le biais d'enceintes où peuvent se tenir des consultations ou d'organismes conjoints de normalisation et d'accréditation). Certains éléments viennent toutefois encore s'y opposer. Lorsque des accords commerciaux qui se recoupent promeuvent des critères différents pour l’harmonisation des mesures réglementaires et lorsque les initiatives bilatérales ou régionales sont menées indépendamment des efforts internationaux et détournent l'attention des négociations commerciales multilatérales relatives aux normes, il peut en résulter de nouveaux obstacles tant pour les autorités de tutelle que pour les entreprises. Ces contraintes sont en outre amplifiées dans les pays à faible revenu pâtissant de problèmes liés à l'insuffisance de leurs capacités administratives et techniques. Pour résoudre ces problèmes éventuels, la présente étude formule un certain nombre de recommandations.

Le document ci-après présente la deuxième des quatre études de cas menées dans le cadre d'un programme de recherche plus général consacré aux échanges et aux ajustements structurels dans plusieurs pays non-membres de l'OCDE ; ces travaux font suite à l'étude intitulée Les échanges et l'ajustement structurel : les enjeux de la mondialisation (OCDE, 2005), qui définissait les mesures nécessaires à la réussite de l'ajustement structurel dans le domaine des échanges. Le présent document porte sur la libéralisation du commerce aux Philippines à partir des années 1980. Le rapport comprend sept grandes sections : introduction (partie 1) ; historique de la politique économique des Philippines à compter des années 1970 (partie 2) ; aperçu général de la structure de l'économie (partie 3) ; examen détaillé de la libéralisation des échanges aux Philippines, réalisée en trois phases - 1981-1988 (premières réformes), 1991-1993 (deuxième phase) et 1994-1996 (troisième phase) - (partie 4) ; aperçu global des ajustements structurels apportés dans les domaines de l'agriculture et des produits manufacturés (partie 5) ; étude détaillée de quatre secteurs - électronique, agroalimentaire, ciment et délocalisation des processus d'affaires (partie 6) ; enseignements tirés, opportunités et défis concernant la poursuite de la libéralisation (partie 7). Bien que la libéralisation ait considérablement progressé depuis les années 1980, y compris dans le domaine de la politique commerciale, l'économie des Philippines n'a d'abord affiché que des performances peu enthousiasmantes. Après une période de croissance dans les années 1990, la crise asiatique est survenue et les réformes n'ont commencé à porter leurs fruits que récemment. Parmi les enseignements tirés au fil des années, on peut citer : l'importance d'un environnement politique et macroéconomique stable, la nécessité de taux de change appropriés, la nécessité d'une suppression rapide des restrictions quantitatives qui pèsent sur la réforme des échanges et d'une déréglementation prochaine des investissements directs étrangers (IDE). Il est vrai que certaines difficultés subsistent, mais l'on s'attend à des résultats plus convaincants à l'avenir si les réformes se poursuivent.