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The aim of this study is to assess the effects of information and communications technologies (ICTs) on firms’ capabilities to innovate in a selection of OECD countries. Our findings support the hypothesis that ICTs act as an enabler of innovation, particularly for product and marketing innovation, in both manufacturing and services. However, we did not find any evidence that ICT use increases the capability of a firm to co-operate, to develop innovation in-house or to introduce products new to the market. These results suggest that ICTs enable firms to adopt innovation but they do not increase their “inventive” capabilities.
There is growing interest in the role of independent fiscal institutions, or fiscal councils, in helping to improve fiscal performance. This article provides some guidance on the scope for improving fiscal performance through fiscal councils based on the available literature and the range of fiscal institutions in the OECD countries. The effectiveness of fiscal councils hinges on several factors, including having full autonomy within the scope of their mandates, active and unfettered dissemination of their analysis, and their credibility. Experience and empirical evidence suggest that delegating macroeconomic forecasting to an independent fiscal council can indeed reduce forecasting bias. There is some empirical evidence that independent fiscal institutions can buttress a government’s capacity to comply with a numerical rule. Good fiscal institutions are a necessary condition for achieving disciplined fiscal performance. Experience demonstrates, however, that their existence is not sufficient. Without strong and sustained political commitment to a medium-term fiscal goal and, where relevant, to the mandate of a fiscal council, durable improvements in fiscal performance will remain elusive.
Part I also presents social expenditure indicators that account for the effects of the tax system as well as indicators on private social expenditure. Including both of these features alters country rankings by level of social spending and leads to a convergence of spending-to-GDP ratios across countries. Based on this broader measure net total social expenditure as a percent of GDP at factor costs in 2007 was highest in France and Belgium, at 30% of GDP, and between 22 and 28% of GDP in Austria, Canada, Denmark, Finland, Italy, Japan, the Netherlands, Portugal, the United Kingdom and the United States.
Part II of this paper presents the OECD SOCX Manual. It starts with a discussion of methodological, classification and data issues regarding the gross spending items as in SOCX. It also looks at the methodological aspects of measuring net social expenditure, and presents information on how relevant estimates were derived. Accounting for the effect of the tax system and private social expenditure leads to greater similarity in social expenditure-to-GDP ratios across countries and to a reassessment of the magnitude of welfare states. After accounting for the impact of taxation and private benefits, social expenditure amounts to over 30% of GDP at factor cost in Belgium and France; social expenditure also ranges within a few percentage points of each other in Austria, Canada, Denmark, Finland, Italy, Japan, the Netherlands, Portugal, the United Kingdom and the United States.
This paper examines the systems and processes that may be required to achieve effective use of tradable GHG units by first considering what international framework would be required to provide a reliable, functional platform for use of tradable GHG units. One effective system would be for national emissions to be reported using common inventory accounting rules, with subsequent additions and deductions according to net flows of tradable units. The paper then analyses more detailed options for two core aspects of GHG unit accounting: governance of international crediting mechanisms and systems for tracking international unit transactions.
For crediting mechanisms, three options are presented for deciding which units may be eligible to count towards national emissions targets: i) only units issued from a centralised mechanism regulated by the UNFCCC would be eligible, ii) units issued from country-led systems would be eligible provided that they are verified to meet internationally-agreed eligibility criteria and iii) a transparency approach whereby all units would be accepted provided that countries meet minimum disclosure requirements. For unit tracking systems, three further options are presented: i) a continuation of the existing International Transaction Log (ITL) that performs both technical and policy-related checks, ii) a ITL or similar tool that performs only technical compatibility checks, and iii) a decentralised system with no central hub. Accounting issues related to domestic emissions trading system units are also explored, notably in cases where such units are traded internationally. The paper concludes that only certain combinations of the various options presented would lead to a viable system that is both practical and provides sufficient assurance of the environmental integrity of units.
This is a step change from the existing reporting and review system – particularly for developing countries, since information from these countries is currently reported on an infrequent basis and is not reviewed. Establishing a system that combines improved reporting with some form of international verification could improve the quality of information available internationally and increase confidence in the integrity of the information reported. This would help to build trust between countries and potentially also increase the level of ambition of mitigation actions.
Further decisions need to be made by Parties in order to determine the scope, inputs, process, outputs and frequency of IAR and ICA, as the decisions agreed at COP 16 (known as the “Cancun Agreements”) provide limited guidance on these items. This paper outlines key questions to help guide such decisions and provides suggestions for the possible design and function of IAR and ICA. It outlines how they could build on existing review processes under the UNFCCC and draw on lessons from other multilateral review processes. The challenge for the international community will be to ensure that IAR and ICA are useful processes, both nationally and internationally, while minimising the resource requirements needed to implement them.