Browse by: "2016"

The Research Impact Assessment (RIA) is expected to increase the efficiency with which public funds are used, and to improve more broadly the functioning of the research and innovation system and its contribution to address a wide range of socio-economic and environmental issues. Both standard economic approaches, which aim to estimate the economic benefits of research investments, and case-study approaches, which aim to analyse the processes of impact generation, have been applied to agricultural research in practice. Standard economic approaches generally focus on public research as information on private efforts in agricultural research is limited, and on economic impacts such as productivity growth. Case studies provide richer information, through a narrative, and highlight the complex relationships among the various variables, events and actors, but it is difficult to standardise results and scale them up. The challenge for RIA is to take into account broader impacts that go beyond science and economic impacts, and to improve knowledge on impact-generating mechanisms. This has become more difficult as agricultural research and innovation systems are increasingly open and complex, and changing quickly. Observation of practices applied to agricultural research in five selected organisations confirms the difference found in RIA between academic research and in practice. In both, the assessment systems pursue the same objectives: 1) Learning: enhance the know-how to produce an environment conducive to socio-economic impact; 2) Capacity building: spread the culture of socio-economic impact to its researchers; and 3) Reporting to stakeholders: from accountability purposes to advocacy targeted to various audiences. The accountability objective, including estimating returns on the financial investment, poses complex challenges and is in tension with the learning and capacity building objectives. The future of RIA will depend on the capacity to improve estimation methods and gather quality information (which also takes into account non-economic impacts) and the sharing of good practices.

This report makes a call for why the digital economy matters for developing countries and what they need to consider when developing a national digital strategy. The world is undergoing a digital revolution with significant implications for global economies and livelihoods. This revolution is predicated on the ever-increasing pace of technological innovation and diffusion. Digital technologies and their attendant applications are reshaping whole domains of human activity, and are spreading across the world faster than previous waves of technological innovation. The digital revolution is thus too important for any country to overlook. As outlined in Section II, the digital economy can be harnessed for inclusive and sustainable growth: digital technologies make life easier for citizens and consumers, raise the productivity of workers and firms, and help governments extend key services to those who need them most. However, this does not just happen randomly: governments must engage in strategic planning to maximise the development impact of digitalisation and ensure that its benefits are evenly distributed. Using the experience of leading economies in the digital space, Section III looks at some of the broad and generic enabling factors that developing countries can develop and use as foundations for their digital economies. The concluding section, Section IV, examines three key lessons developing countries can learn from other countries’ digital experiences. It provides some guiding principles around thinking about how to craft a national digital strategy that builds on top of the enablers of the digital economy.

This working paper reflects on the outcomes of the 2015 agreements on development and environment including the Sendai Framework, the Addis Ababa Action Agenda, the 2030 Agenda and the Sustainable Development Goals, and the Paris Agreement. It identifies common themes emerging from the international agreements and their implications for development co-operation providers and their partners. The paper outlines existing synergies between climate and development finance and proposes factors to improve coherence for sustainable development with a particular focus on the role of development co-operation providers in the post-2015 context. The paper contributes to the discussion about how the international community can successfully deliver on the commitments to sustainable development and climate action made in 2015.

According to the World Health Organization, depression is the highest ranking cause of disease in middle- and high income countries; it costs Europe around EUR 118 billion a year, mostly through lost productivity on the labour market, i.e. labour supply loss, sickness absence, and poor performance at the workplace. Using data from waves 1, 2 and 4 of the Survey of Health, Ageing and Retirement in Europe (SHARE), this paper seeks to assess the magnitude of the impact of depression on labour market outcomes of older workers, a population sub-group whose participation in the labour market is ever more crucial in view of rapid population ageing. For each of the studied outcomes, analyses show a substantial impact of depression, measured with the European Depression Scale. Using different methods to address endogeneity this paper finds that depression decreases the probability of being employed by 22 to 51 percentage points among the 50 to 64 year old age group. Older workers with the most symptoms are more than twice as likely as others to exit employment before retirement age. Finally, depression increases annual sickness absence duration by 7.2 days on average. These figures show the necessity for national and firm-level employment policies and programmes targeting the 50 and over population to include prevention of depression, increased awareness of depression and adequate medical support.

Since 2009, Education at a Glance (EAG) has included an indicator on education and social outcomes using data from different surveys. The OECD Programme for the International Assessment of Adult Competencies (PIAAC) develops and conducts the Survey of Adult Skills which measures adults’ proficiency in literacy, numeracy and problem solving in technology-rich environments. Data collected through the Survey of Adult Skills were used in various editions of EAG as it gathered rich information on various social outcomes. In EAG 2016, Indicator A8 (How are social outcomes related to education?) used this source to measure the association between educational attainment and self-reported health. This indicator also analysed data from the European Union Statistics on Income and Living Conditions (EU-SILC) on the prevalence of limitations that affect people’s ability to perform normal daily activities across the different educational attainment levels. Finally, it referred to the Gallup World Poll to analyse how life satisfaction varied across the different countries and educational attainment levels. The main findings are further developed in this paper.

This paper aims to investigate the performance of the students in the United States in all 84 mathematics items that were administered in the United States as part of the PISA 2012 assessment. It compares the performance of the United States with the OECD average and with the performance of five reference countries/economies that were ranked higher on the PISA scale. The analysis reveals specific relative strengths and weaknesses of the 15-year-olds in the United States, referring to items in which they performed unexpectedly well or unexpectedly badly compared to their overall distance from the OECD average or from the reference countries/economies. On that basis, certain patterns – that means certain clusters – of items with similar cognitive requirements, are identified. There are seven altogether, three for strengths and four for weaknesses of the US students. An analysis of student solutions illustrates and further clarifies these strengths and weaknesses. The results show that the relative strengths are mostly revealed in easy items, whereas the relative weaknesses are mostly reflected in particularly demanding items.

The rebound effect is the phenomenon underlying the disproportionality between energy efficiency improvements and observed energy savings. This paper presents a meta-analysis of 76 primary studies and 1138 estimates of the direct rebound effect in road transport to synthesise past work and inform ongoing discussions about the determinants and magnitude of the rebound effect. The magnitude of rebound effect estimates varies with the time horizon considered. On average, the direct rebound effect is around 12% in the short run and 32% in the long run. Indirect and macroeconomic effects would come on top of these estimates. Heterogeneity in rebound effect estimates can mainly be explained by variation in the time horizon considered, the elasticity measure used and the econometric approach employed in primary studies, and by macro-level economic factors, such as real income and gasoline prices. In addition to identifying the factors responsible for the variation in rebound effect estimates, the meta-regression model developed in this paper can serve as a relevant tool to assist policy analysis in contexts where rebound effect estimates are missing.

The provision of open space is at the heart of a complex arbitration of local public finance and urban quality of life. The amount of open space varies substantially across urban areas. This variation raises some natural questions: What determines the amount of open space in an urban area? How does the amount of open space affect housing prices and local tax revenues? How can we assess whether the amount of open space in urban areas is socially optimal? This paper conducts theoretical and empirical analysis to address these issues. The theoretical analysis reveals that price elasticities of housing demand and supply, economies of scale in providing public services, and capitalized and non-capitalized values of environmental benefits from open space are key parameters affecting the optimal amount of open space. The effects of these parameters are tested on the basis of a sample of U.S. urban areas. Empirical results suggest that a significant share of U.S. urban areas has too little open space, in the sense that additional open space conservation could increase land values and social welfare.

This report provides a conceptual foundation for the analysis of international regulatory co-operation (IRC) and its potential benefits through reduced trade costs. Different forms of IRC aiming to reduce specification, conformity assessment and information costs - which can arise from regulatory heterogeneity, costly conformity assessment procedures and insufficient regulatory transparency – are addressed. The report argues that trade costs need to be balanced against the regulatory objectives of mitigating various market imperfections. Integrating these two elements often allows significant gains in terms of national welfare, gains that can be augmented by negotiated outcomes among trading partners. IRC may also have important effects on trade with third countries. Related welfare implications are, however, ambiguous and depend on the specifics of the IRC outcome as well as on third countries’ own regulations.

A great deal of research in psychology and policy studies has demonstrated that when citizens feel fairly treated in their encounters with government agencies, they are more likely to accept and comply with regulatory rules and decisions, to feel included in society and to trust their government. This paper explains how careful design of rocedures in the development and administration of laws and regulations and targeted training of officials can enhance perceived fairness and produce greater decision acceptance and compliance. It draws on a large number of empirical studies in different policy settings and countries to identify three key factors that drive perceived fairness: voice, respect and explanations. Successful programs to improve subjective justice must be built upon a foundation of objective justice: attempts to simulate fairness without actually providing objectively fair procedures tend to provoke very negative reactions when the true nature of the unfair process is discovered. Findings of this paper feed into OECD work on trust, open government and stakeholder engagement.

Societal progress is about improvements in the well-being of people and households. Assessing such progress requires looking at the diverse and multidimensional experiences and living conditions of people. Measuring well-being and progress is a key priority that the OECD is pursuing through its Better Life Initiative and the How’s Life report series that has been published bi-annually since 2011. In addition, the UN Sustainable Development Goals (SDGs) have created a strong need for better data on multi-dimensional outcomes. However, no statistical framework exists linking conceptual frameworks of well-being with specific measurement instruments and outputs, and a lack of harmonised data suitable for international comparisons remains a key limitation to monitoring progress across countries. This review makes a first step towards developing a system of well-being statistics. A data source that has been underutilised in assessing the multidimensionality of human well-being and the joint distribution of outcomes are General Social Surveys, which are run by the majority of national statistical agencies as part of their regular survey programme. Using the OECD well-being framework, this review systematically considers the outcome domains of How’s Life?, taking stock of how each domain is being measured through General Social Surveys conducted in OECD countries and could be drawn upon in comparative analyses of well-being such as How’s Life?. The paper highlights inconsistencies between General Social Surveys across countries, and makes recommendations towards harmonization.

The recent global financial crisis, combined with regulatory changes in financial industries, has altered the financial landscape in terms of how financing can be achieved and the potential role of institutional investors. The potential role that insurers, particularly life insurers and pension funds, can play as long-term institutional investors has become a central topic of discussion in various fora. How this role develops will, in the long run, affect how firms obtain financing for their investments and ultimately lead to growth of the real economy. This article provides an overview of the evolving investment strategies of insurers and identifies the opportunities and constraints they may face with respect to long-term investment activity. The report investigates the extent to which changes in macroeconomic conditions, market developments and insurance regulation may affect the role of insurers in long-term investment financing. It concludes that regulation should neither unduly favour nor hinder long-term investment as such but place priority on incentivising prudent assetand- liability management with mechanisms that allow for a “true and fair view” of insurers’ risk exposures. In risk-based solvency regulation, an asset’s risk relative to liabilities is reflected in the capital requirements.
JEL classification: G22, E22, F21, O16,
Keywords: insurance, long-term investment, asset-liability management, risk-based capital

This paper seeks to identify the conditions under which raising public investment can sustainably lift growth without deteriorating public finances. To do so, it relies on a range of simulations using three different macro-structural models. According to the simulations, OECD governments could finance a ½ percentage point of GDP investment-led stimulus for three to four years on average in OECD countries without raising the debt-to-GDP ratio in the medium term, provided projects are sound. After one year, the average output gains for the large advanced economies of such a stimulus amount to 0.4-0.6%. However, the gains are particularly uncertain for Japan. Reprioritising spending in later years would lead to average long-term output gains of between 0.5 to 2% in the large advanced economies. Those gains depend on the assumptions made on the rate of return. Hysteresis reinforces the case for an investment-led stimulus. Output gains will also be higher if the stimulus is combined with structural reforms and if countries act collectively.

This study approaches the question whether it “pays” to live in big(ger) cities in a three-fold manner: first, it estimates how city size affects worker productivity (agglomeration benefits) in Germany, based on individual-level wage data. Second, it considers whether productivity benefits translate into real gains for workers by taking local price levels into account. Third, it examines the role of amenities in explaining differences in real benefits across cities. The estimated elasticity for agglomeration benefits is around 0.02, implying that comparable workers in Hamburg (3 million residents) are about 6% more productive than in Recklinghausen (150 000). But agglomeration benefits are, on average, offset by higher prices, i.e. city size does not systematically translate into real pecuniary benefits for workers. Amenities, e.g. seaside access, theatres, universities, or “disamenities”, e.g. air pollution, explain – to a large degree – variation in real pecuniary benefits, i.e. real wages are higher in low-amenity cities.

This working paper provides a broad picture of official financial flows for infrastructure development in developing countries by bilateral and multilateral development partners. Multilateral development banks are further examined in a special section. The paper offers an overview volumes and distributions of financial flows, including those channelled to private sector operations and those mobilised from the private sector by guarantees, syndicated loans and collective investment vehicles. This report, which builds on previous work on the topic, will contribute to research and policy dialogue on filling the financial gap in infrastructure in developing countries. It will also support the monitoring of Sustainable Development Goal 9 and the discussions of the G20 on infrastructure development.

An estimated baseline convergence model capturing the long-term effect of human capital and physical investment on potential output for a panel of OECD countries is augmented with public investment and its components. The estimations suggest that public investment has a positive effect on long-term growth and on labour productivity. Public investment can also increase the speed of convergence of catching-up countries. Public investment is more beneficial in some areas than others. This is particularly the case of public investment in health and in research and development. There is also evidence that growth gains from increasing public investment may decline at a high level of the public capital stock due to decreasing returns

This paper reviews the key issues concerning the impact of public spending and taxation on long-run growth and inequality and takes stock of existing theoretical and empirical studies. Overall, the evidence highlights that the size of the government matters for long-term growth as a too large government may undermine growth through the cost of financing public spending. A reallocation of public spending towards infrastructure and education would raise income in the long run, whereas increasing social welfare spending can reduce inequality as such spending increases redistribution and risk sharing. Similarly, the available evidence also supports the hypothesis that some taxes are more distortionary than others, with income taxes found to be more harmful for growth than consumption and property taxes. However, a tax shift from income towards consumption taxes has equity implications, since income taxes are generally more progressive than other taxes. The effect of a reallocation of spending and taxes on growth and inequality likely varies across countries depending on country characteristics.