Browse by: "2015"

Manufacturing features again high on the policy agenda in a lot of OECD countries. While deindustrialisation and offshoring have dominated the news about manufacturing during the past decades, recent years have witnessed a number of examples of companies re-shoring activities back to OECD economies. It is then not surprising that the discussion about the need for industrial policies in favour of manufacturing has gained importance in recent years. Policy discussions however often ignore the profound changes manufacturing has undergone in recent years, for example manufacturing today is much more than the pure production of tangible things and includes a growing services content. This paper addresses this issue against the background of long-term structural change of OECD economies and discusses the changing role of manufacturing and services in OECD economies.

This paper presents the methodology, key results and statistical analysis of the 2015 Indicators for Regulatory Policy Governance (iREG) to complement the OECD Regulatory Policy Outlook 2015. Three composite indicators were constructed corresponding to three key principles of the 2012 OECD Recommendation of the Council on Regulatory Policy and Governance: Regulatory Impact Assessment; stakeholder engagement; and ex post evaluation. This paper explains the process by which the indicators were developed, presents main results, and outcomes of different sensitivity analyses that were performed to test the robustness of the methodology, including principal components analysis, Monte Carlo analysis and weight-sensitivity analysis.

The constant market share analysis framework is used to decompose changes in Spain’s share of the global market for goods exports into competitiveness and structural effects (i.e. the impact of specialisation, either in product or geographical terms) over 1996-2013. As other high-income countries, Spain has experienced competitive pressures from China and other emerging economies that have resulted in a loss of global market share. Nevertheless, the loss has been smaller than in other European advanced economies, thanks to better competitiveness. By contrast, the structure of geographic markets to which Spain exports, with a large-weight on relatively slow-growing areas and a small weight on fast-growing emerging countries, has exerted a negative impact on Spanish exports. In the same vein, the product structure, focused on relatively slow growing product lines, has not been conducive to better export performance either. This Working Paper relates to the 2014 OECD Economic Survey of Spain (http://www.oecd.org/eco/surveys/economic-survey-spain.htm).

The Port of Koper is the single national port of Slovenia and has been growing fast in recent years. It is expected that the existing rail link to and from the port will reach capacity in a few years. A new additional track, involving a tunnel on a separate alignment, has been proposed as a solution. The ITF was asked to perform a broad risk analysis of the project and investigate options for the delivery of the project through a PPP. Within this broad scope the ITF addressed several questions: would the potential for growing traffic at the port justify added capacity; what are the options for increasing capacity on the existing track to buy time; is the cost of the new rail link adequately estimated; what would be the best way to enable private participation in the project?

Growing international migration and diverse characteristics of migrant populations make internationally comparable high-quality data on migrants essential. Regular update of these data is crucial to capture the changes in size and composition of migrant populations. This document presents the first results of the update of the Database on Immigrants in OECD Countries (DIOC) for 2010/11. It describes immigrant and emigrant populations by socio-demographic characteristics and labour market outcomes in the OECD, and shows their evolution in the past decade. It also provides updated emigration rates and brain drain figures...

A key issue for OECD countries is to understand how to strengthen the position of the destination, how to be more effective in supporting a stronger, more inclusive and sustainable tourism growth and how to further improve its competitiveness in the global tourism market. This report examines the changing global trends and inter-linked policy challenges, then reviews the policy framework supporting tourism growth and presents various policy perspectives, detailing how they inter-connect and support tourism growth. The report explores ways for closer policy integration between tourism and related policy areas and suggests new policy approaches to more effectively support tourism growth. The report was considered as approved by the OECD Tourism Committee as of 13 January 2015.

The share of the tertiary sector in China’s value added has increased steadily, overtaking the share of the secondary sector in 2013. With increasing incomes, the share of services is expected to grow further as at higher incomes a larger share of income is spent on services. In addition to final demand, intermediate demand can be another driving force for service industries. As liberalisation leads to a greater role for the market in allocating resources, service industries are expected to become more competitive and therefore it may become cheaper to outsource services than to produce them in-house. Liberalisation will likely also lead to greater specialisation to remain competitive, thereby making specialised services available for outsourcing. This will likely spur the development of some high value-added logistics services such as warehousing or order handling. By the same token, professional services such as accounting or engineering are also likely to benefit from a greater reliance on the market and greater competition. In the envisaged transition from “made in China” to “created in China”, the service sector is expected to play a prominent role. To that end, the service sector is gradually being provided a more even playing field as privileges for manufacturing industries are being withdrawn and a more equal treatment of producers across sectors is being adopted. This paper provides a snapshot of the service sector, its size, the ownership of its firms, and productivity across types of firms depending on ownership, sector, age, size and geographical region. This Working Paper relates to the 2015 OECD Economic Survey of China www.oecd.org/eco/surveys/economic-survey-china.htm.

Legislative budget institutions are established and operated in different forms according to the various political and social experiences and financial circumstances of each country. Note, however, that research studies on the causes thereof are not only few in number but also focus mostly on the fact that legislative budget institutions are determined according to the “form of government”. In this light, this study establishes the comparison and analysis of the legislative budget institution of each country.
The implication of this study is as follows. Firstly, this study approaches the Legislature’s capacity from a comprehensive and three-dimensional point of view in order to compile sub-indices of each legislative budgetary institution index. In other words, this study is to approach the financial authority vested to the Legislature and the Legislature’s capacity to exercise such authority from a comprehensive point of view in measuring such indices.
Secondly, the accuracy of indices in this study has been improved by deriving relative weighting for sub-indices of each legislative budgetary institution index through AHP questionnaire surveys and analyses. In other words, AHP analysis can ensure the practicality and accuracy of measurement of indices and present a scheme to compile more universal and relevant indices. It is, however, necessary to consider sub-indices such as elements of legal system and related agencies. Also this study has a limitation in that it fails to fully explain the actual conditions of operation of institutions in the unique political, social, and economic settings of each country.

JEL Classification: H11, H50, H83
Keywords: Legislative Budget Institution, Legislative Budget Institution Index, AHP

With gross government debt of 226% of GDP, Japan’s fiscal situation is in uncharted territory and puts the economy at risk. Japan needs a detailed and credible fiscal consolidation plan, including specific revenue increases and measures to control spending to restore its fiscal sustainability. The major concern on the spending side are social spending pressures in the context of rapid population ageing, making reforms to contain such spending a priority. Much of the consolidation, though, will have to be on the revenue side, primarily through hikes in the consumption tax rate beyond the 10% now planned for 2017. Fiscal consolidation should be accompanied by measures to promote social cohesion through the tax and benefit system and by breaking down labour market dualism. In particular, an earned income tax credit is a priority to assist the working poor.

Farmers will undertake many adaptation actions to meet changing climate conditions and will often do so without any government intervention. However, when such actions provide both private and public benefits, the public sector may play a role in how these are developed. This report aims to establish a framework to help identify specific actions that governments could take in this respect and that could avoid sending signals leading to non-adaptation or maladaptation. This report begins with a review of national adaptation strategies for the agricultural sector in OECD countries and highlights different approaches undertaken by governments. It then identifies the main criteria under which governments may take action to increase the resilience of the agricultural sector and its adaptive capacity to climate change. Finally, it discusses strategies to monitor and evaluate adaptation policies.

This paper re-estimates the elasticities of government revenue and expenditure items with respect to the output gap for OECD countries. These elasticities are used by the OECD to calculate cyclically adjusted fiscal balances. The study updates the earlier 2005 study using the most recent datasets and tax codes, the coverage being confined in this paper to 35 countries, the 34 OECD member states and Latvia. The same two-step methodology is retained: revenue and expenditure elasticities with respect to the output gap being defined as the product of, first, the elasticities of individual revenue and expenditure items with respect to their bases and, second, the elasticities of these bases with respect to the output gap. A number of refinements and methodological improvements are made relative to the 2005 study. The revisions to individual elasticities relative to the 2005 vintage are significant in a number of cases but do not follow a clear pattern across countries, except for the elasticities of corporate income tax revenue which are revised up in most cases.

Identifying effective policy interventions for adults with low literacy and numeracy skills has become increasingly important. The PIAAC Survey of Adult Skills has revealed that a considerable number of adults in OECD countries possess only limited literacy and numeracy skills, and governments now recognise the need to up-skill low-skilled adults in order to maintain national prosperity, especially in the context of structural changes and projected population ageing. Against this background, this literature review examines the current evidence on policy interventions for adults with low literacy and numeracy skills to clarify which targeted policy levers could best enhance socio-economic returns. Despite progress in measuring adult skills and extensive literature describing practices used in adult literacy and numeracy programmes, there is little analysis of the effects of different interventions on learners. This literature review therefore attempts to bring together the analytical insights from research and practice to provide a broad picture of what has so far proven to motivate low-skilled adults to join and persist in literacy and numeracy learning. The paper shows that low basic skills levels of adults are a complex policy problem that has neither straightforward causes nor straightforward solutions and successful interventions are relatively uncommon. Tackling serious literacy and numeracy weaknesses is challenging because the group of low-skilled adults is diverse and requires different, well-targeted interventions. But there is now an emerging body of evidence on the approaches to teaching and learning that can make life-changing differences to adults in need. The paper identifies formative assessment, e-learning, and contextualisation and embedding (especially in the workplace and family context) as effective approaches to basic skills teaching. The central challenge is to put the evidence to work.

Trade facilitation matters. Estimates of trade friction costs from border and custom procedures are relatively high. Trade facilitation to allow for the speedy movement of traded goods may be more important for agricultural, especially perishable, products than for other goods because of their time sensitivity, especially for developing countries. Data suggest that many countries across the geographic and income spectrum have improved their performance on several trade facilitation variables. Concurrently, agricultural trade has grown substantially, especially from low and lower middle income countries. The data suggest that further improvements to trade facilitation in many low and lower middle income countries are needed for them to catch up with best practices. Impediments to trade remain, as indicated by the relatively high tariff equivalent of trade costs, especially on agricultural products.

Urbanisation will continue in China, with the government planning to grant urban residential status to an additional 100 million rural workers by 2020. While this process is transforming the urban economy, the rural economy is also undergoing substantial structural change. Government policy settings in rural areas are critical for smoothing the transition and helping bridge the gap in living standards between urban and rural China. Reforms should further enable farmers who wish to continue working in the agricultural sector to raise productivity levels. Specific measures include encouraging land transfer, promoting further rural financial development and technical assistance for farmers. At the same time, obstacles should be removed for those rural residents aspiring to move to jobs in cities where their skills can yield a higher marginal product. For those who remain in rural areas, improved social welfare systems and investment in health services are critical. This Working Paper relates to the 2015 OECD Economic Survey of China www.oecd.org/eco/surveys/economic-survey-china.htm

Ten years after the 2005 WTO Ministerial Conference agreed on a mandate to operationalise aid for trade, this paper assesses the achievements and challenges of the WTO-led Initiative. After outlining the achievements, the paper discusses where to put the emphasis, how to expand partnerships, how to enhance effectiveness; and, most importantly, how to retain interest in using aid to make trade work for the poor. In conclusion, the paper proposes that the Initiative could focus on promoting connectivity, boosting sustainable investment, promoting green growth, and supporting the achievement of the Sustainable Development Goals. The paper suggests that these aims can best be achieved through regional approaches for tackling trade-related binding constraints with development finance from a combination of different sources, including providers of South-South co-operation and with engagement of the private sector.

This paper investigates the relationship between local air pollution and urban structure with an emphasis on urban fragmentation. Using a unique dataset of 249 Large Urban Zones (LUZ) across Europe, a Bayesian Model Averaging selection method is employed to empirically identify the determinants of within-LUZ concentration of three air pollutants: NO2, PM10 and SO2 for the year 2006. Several indices of land use are considered among possible determinants. These are supplemented by a dataset on various economic, demographic and meteorological variables that can explain the variation of air pollution. The results of this econometric analysis support the hypothesis that urban structure has significant effects on pollution concentration. In particular, they suggest that fragmented urban areas experience higher concentrations of NO2 and PM10 and that densely populated urban areas suffer from higher SO2 concentration. The findings suggest that policies favouring continuous urban areas may result in environmental improvements.

Harmful alcohol consumption is one of the leading causes of ill health and premature mortality worldwide. This paper illustrates trends and social disparities in alcohol consumption and harmful drinking in 20 OECD countries. Analyses are based on individual-level data from national health and lifestyle surveys. Alcohol consumption, on average, remained relatively stable in OECD countries over the past 20 years, but with significant variations between countries. However, a closer look at trends and patterns of consumption in specific population groups reveals a more complex picture. Young people are increasingly taking up harmful drinking. Women with high education and high socio-economic status are more likely to engage in harmful drinking than their less educated and less well-off counterparts, while the opposite is observed in men. Levels and patterns of alcohol consumption have an impact on labour market. Heavy alcohol consumption is associated with less employment opportunities, high wage penalties, and lower productivity, whereas light and moderate consumption are associated with positive labour market outcomes. By shedding light on some of the dimensions of alcohol consumption in OECD countries, this paper aims at contributing to the design of appropriate health policies to prevent alcohol-related harms. The findings presented in the paper provide a basis for a quantitative assessment of the impacts of alternative policy options, and may contribute to a better targeting of such policies.

Educational opportunities have a very important impact on a person’s life. Employment, earnings, well-being, health and trust are all strongly related to education and skills. A lack of high-quality educational opportunities is the most important way in which poverty, social inequality and exclusion are transmitted from one generation to another. For countries to grow and progress in a sustainable way, educational opportunities should be distributed in an inclusive way.

Means-tested Social Assistance (SA) benefits play an important role as social protection floors sup-porting households in financial difficulties. This paper presents evidence on the patterns of SA benefit re-ceipt in a selection of OECD and EU countries. It provides an overview of the role of SA benefits in social protection systems and assesses the generosity of benefit payments. It then studies the dynamics of SA benefit receipt based on micro-level data describing trends in aggregate receipt and transition rates and presenting new evidence on spell durations and repeat spells. The final part of the paper summarizes recent empirical evidence on state dependence (or ‘scarring effects’) in benefit receipt and discusses its possible sources and policy implications.

• Between 2000 and 2012, the proportion of young adults (25-34 year-olds) with a tertiary qualification has grown by more than 3% per year on average in OECD countries.
• On average across 24 national and sub-national entities participating in the OECD Survey of Adult Skills, 39% of adults have achieved a higher level of education than their parents.
• A 20-34 year-old with tertiary educated parents is 4.5 times more likely to participate in tertiary education than a young adult whose parents did not have a tertiary qualification.