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The System of Environmental Economic Accounting Central Framework (SEEA CF) was adopted in 2012. In one decade, it has expanded to 92 countries, including most OECD countries. However, there is still work to be done by national statistics producers to increase the use of SEEA statistics. This paper focuses on the SEEA stocks and flows accounts, providing examples of where they are already used to support public policy making in high-priority areas such as climate change, environmental sustainability, the circular economy, and management of ecosystems and freshwater, as well as feeding into indicators, dashboards and other frameworks. Although these examples show that SEEA statistics are already informing public policy making in many countries, there are still important “influence gaps”. The second part of this paper discusses why these gaps exist and what can be done about them.
El abandono escolar temprano (AET) puede dar lugar a crecientes desafíos individuales y ocasionar elevados costes económicos para los sistemas educativos y las sociedades en general. España ha logrado avances significativos en la reducción del AET en los últimos años; en 2022, la tasa de AET era de 13,9%, casi la mitad de lo observado hace una década. Sin embargo, la tasa media de España sigue siendo de las más elevadas de los países miembros de la OCDE y de la Unión Europea, con notables disparidades regionales. Basándose en la evidencia de la investigación y en las buenas prácticas nacionales e internacionales, y gracias a la contribución de los actores clave del sistema educativo, este informe identifica las fortalezas y los principales desafíos para abordar el AET en España. Determina así cinco áreas de acción y propone una serie de recomendaciones con un enfoque coordinado para reducir el AET en todas las comunidades autónomas y en las ciudades autónomas de Ceuta y Melilla.
Early school leaving (ESL) can lead to mounting individual challenges and generate high economic costs to education systems and societies at large. Spain has made significant progress in reducing ESL in recent years; in 2022, the ESL rate was 13,9% - almost half the points of a decade earlier. However, noteworthy regional disparities remain, and Spain’s average ESL rate remains one of the highest among OECD and EU member countries. Informed by national and international research evidence and good practices, and by the expert contribution of key education stakeholders, this report identifies existing strengths and challenges to address ESL across Spain. It proposes five areas for action that each include a range of evidence-based and actionable recommendations for a coordinated approach to reducing ESL in all autonomous communities and in the autonomous cities of Ceuta and Melilla.
This paper presents a detailed economic modelling analysis of public finance in the transition towards carbon neutrality. It outlines results from a Net-Zero Emission Ambition scenario, which reflects the ambition to achieve net-zero carbon dioxide emissions globally by mid-century, using a broad and region-specific policy package that combines various policy instruments: carbon pricing, removal of fossil fuel support, regulations in the power sector, and other policies that stimulate investments by firms and households to reduce and decarbonise energy use. The analysis relies on the OECD global computable general equilibrium ENV-Linkages model.
Results show that transitioning towards carbon neutrality is feasible when considering economic and fiscal consequences. The scenario achieves carbon neutrality while maintaining continued economic growth, despite a limited negative impact on global GDP and on public revenues. The fiscal effects reflect a trade-off between instruments that increase public revenues (carbon pricing) or reduce public expenditures (fossil fuel subsidies removal), on the one hand, and more costly instruments (subsidies) and indirect effects (tax base erosion and changes in fiscal and economic structure) on the other hand.
Digitalisation places new demands on the early childhood education and care (ECEC) workforce to navigate the care and well-being of children in the digital age. This literature review examines frameworks for digital competencies (DC) in education, with a focus on ECEC, as well as variation in DC requirements for ECEC staff with different responsibilities. It explores strategies for a successful integration of DC in ECEC workforce development programmes. The review shows there has been limited research and policy support regarding the development of DC in ECEC and discusses the importance for the ECEC workforce to understand how digital technologies may be incorporated to their work, encompassing both technical aspects and responsible use, as well as the social and collaborative dimensions of professional development in this area. The review examines also how attitudes towards technology use with young children condition skills development in the sector.
This report provides input to a national review of the public research funding system in Sweden. It is designed to inform a broader dialogue that is taking place amongst different research stakeholders in Sweden. The report contains proposals and options for changes for Swedish public funding of research and innovation to effectively promote research excellence, support innovation and respond to societal needs. These proposals are supported by relevant international examples. The analysis takes into account insights from the OECD review of innovation policy in Sweden in 2016 and recent OECD work on different aspects of public research funding and research infrastructure.
Governments in many countries are pursuing higher environmental goals for agriculture. However, in an interconnected world, the unilateral adoption of environmental policies for agriculture can reduce the producers’ competitiveness and induce pollution leakage. This report analyses these challenges and discusses policy solutions, focusing on two examples: climate change mitigation policies and policies limiting the environmental impacts of pesticides. The extent of competitiveness and leakage effects is found to depend on market conditions, differences in pollution intensity, and the type of environmental policy adopted. Two policy routes are identified to improve agriculture’s environmental performance while maintaining the benefits of global markets. The first route relies on “direct” environmental policies, such as market-based instruments or regulations, which are rapidly effective in limiting environmental impacts but may require additional complementary policies to limit their potential competitiveness and leakage impacts. The second route involves alternative policies acting on agricultural supply, demand, or through private sector engagement, which limit competitiveness and leakage impacts but may require time to be environmentally effective.
Widespread supply disruptions in the wake of the COVID-19 pandemic and the Russian Federation’s large-scale aggression against Ukraine have raised concerns among policy makers that globalised value chains expose domestic production to shocks from abroad. This paper uses new indicators of global value chain dependencies and exogenous pandemic shocks to econometrically estimate the effects of supply disruptions abroad on domestic output. The results suggest that the adverse effects of supply disruptions are particularly large when concentration of supplying countries and supplying firms is high. Counterfactual simulations of the econometric model suggest that diversification of suppliers would have sizeable benefits in terms of shielding domestic production against country-specific supply shocks, with partial onshoring of production having only small additional benefits. Technological innovation that reduces foreign dependencies, such as the substitution of renewable energies for fossil fuels, can have similar benefits as diversification.
This policy paper describes the current state of play of the measures taken by countries to promote the professionalisation of the public procurement workforce. The paper focuses on the main elements of professionalising the public procurement workforce: i) assessing the current state of professionalisation, (ii) developing a professionalisation strategy, (iii) developing a competency
model and a certification framework, (iv) developing capacity-building systems, (v) setting up incentive mechanisms, and (vi) promoting collaborative approaches with knowledge centres. The analysis is based on desk research and builds on data collected through the 2020 OECD Survey on Professionalisation and the 2018 OECD Survey on the Implementation of the 2015 OECD Recommendation on Public Procurement.
Sweden is undergoing a major reform of its public employment service Arbetsförmedlingen towards contracting out employment services to independent providers. At the same time, Arbetsförmedlingen is also undergoing a significant restructuring, resulting in a downscaling of physical presence across the country and an increased digitalisation of services. As this report shows, the social economy and in particular work integration social enterprises can play an important role in the delivery of publicly-financed employment services. The report analyses the main features of the social economy in general as well as its current role in employment policies in Sweden. Moreover, it discusses challenges in engaging social economy organisations as providers in the market for contracted-out employment services in Sweden with respect to the legal framework, contracting rules, financial barriers, payment models, and co-operation structures. Lastly, it offers recommendations based on international practice to help design and implement the proposed policy recommendations in the Swedish context.
International trade and in particular global value chains have provided many economies with new opportunities to participate in international trade and access new technologies. The COVID-19 pandemic has brought to the fore specific vulnerabilities in some supply chains and ignited a discussion about future lessons to be learned from these events. This paper reviews patterns of integration into trade and global value chains among Latin American economies, traces some recent developments, including during the pandemic, and provides a look at future trade risks and opportunities for Latin American economies through model simulations.
The United Kingdom is among world leaders in reducing domestic greenhouse gas emissions, and a broad political consensus supports the target to reduce net emissions to zero by 2050. The UK’s strong institutional framework is an inspiration to countries around the world, and the country is pioneering work to embed climate considerations in the financial sector. Achieving carbon neutrality will require policy to match ambition. Emission reductions so far were largely driven by electricity generation, a sector targeted by explicit pricing instruments and a cost efficient renewables auction-design subsidy scheme. Expanding pricing instruments across the economy is an essential building block to reach targets. Such measures will be more effective if complemented by well-designed sectoral regulation and subsidies, and more acceptable if implemented once energy prices have started to come down from historically high levels. Britons are conscious of the need to act. However, winning their acceptance of the needed policies may require targeting carbon revenue to compensate low-income households and investments in green infrastructure and new technologies. A mechanism defusing fears that effective policies undermine competitiveness, preferably internationally agreed, would facilitate effective policies towards emission intensive trade exposed industries.
Appropriately designed Product Market Regulation (PMR) is essential to enhance productivity, boost economic growth and increase welfare. Regulation is needed to address market failures and guarantee the health and safety of consumers. However, by limiting the entry and expansion of firms, a too stringent regulatory environment can hinder an efficient allocation of resources both within and across industries. This paper provides a detailed review of PMR in Indonesia and analyses the country’s performance in this area relative to OECD countries, other G-20 members and regional peers. To do so, it relies on the OECD’s PMR Indicators, which have been recently compiled for Indonesia. These indicators assess the extent to which the regulatory framework of a country is competition-friendly across a range of sectors and regulatory areas. The analysis reveals that PMR in Indonesia is less conducive to competition than in most OECD countries. The scope for improvement is particularly great in areas such as barriers in network sectors, command-and-control regulation, public procurement, the governance of State-owned Enterprises (SOEs) and the extent to which the impact on competition is assessed when designing new regulation. The paper proposes concrete policy measures to align the regulatory environment of Indonesia with that of best performing countries.
Korea’s low youth employment rate has negative consequences for the young people concerned and the economy as a whole. Raising youth employment is a priority, particularly as Korea faces the most rapid population ageing among OECD countries. Low youth employment is due to a mismatch between education and the labour market, reflecting a large skill gap between highly-educated youth who race for credentials to secure attractive careers and older workers retiring from jobs that require less human capital. The share of university graduates among young Koreans is the highest in the OECD, but their employment rate is relatively low even as small firms confront serious labour shortages. Dualism in the labour market (between regular and non-regular workers) and the product market (between small and large firms) encourages young people to queue for jobs in large firms and the public sector to avoid low-wage precarious jobs. Raising the youth employment rate requires breaking down dualism while reforming the education system. Vocational education in secondary schools, which has shrunk while becoming another route to tertiary education, should be improved to make it a direct path to employment. Expanding the approach of Meister schools and the work-learning dual programme would help in that regard. Tertiary education should become more flexible and responsive to the demands of employers. Active labour market policies should focus less on direct job creation and more on job placement and training.
Population ageing is expected to result in significantly higher government spending in many OECD countries in the coming decades. This paper sheds light on the macroeconomic consequences of population ageing for government revenue in a framework consistent with the OECD long-term model. If the labour and capital income shares in GDP remain constant and pension income increases in relation to GDP, the tax revenue-to-GDP ratio will increase slightly. However, this will not be enough to cover the total increase in government spending due to population ageing. If governments do not mitigate spending pressures by structural reforms or cuts in pension entitlements, they will have to boost tax revenue significantly to prevent public debt from expanding. In many countries, it will not be possible, nor advisable, to completely finance the increase in long-term spending with only one tax instrument as it would require a massive rise in the tax rate, with risks of ensuing distortions. Thus, governments will have to choose mixes of tax increases, accounting for growth, equity and political considerations. This paper reviews these considerations for several specific tax categories.
This report discusses the costs and benefits of the transition from cash to accrual accounting in the public sector for SIGMA partners in the Western Balkans and the European Neighbourhood. The countries are attracted by the promises of accrual accounting and the corresponding IPSAS standards that it will improve transparency, accountability and financial decision-making. This report investigates whether the reform towards accrual accounting is indeed recommendable given that the reform towards IPSAS-based financial statements also carries a higher administrative burden and often requires government-wide adaptation or adjustment of the financial information systems. In this report, evidence from case studies of five EU Member States and four SIGMA partners is combined with a review of the academic literature to understand the balance of the benefits versus the costs of the reform.
Appropriately designed and implemented regulations are powerful tools for enhancing economic performance. A strong and sound regulatory framework can mitigate threats to health, safety, and the environment and address market imperfections. However, regulation can also create barriers to the entry and expansion of firms, which may limit and distort competition. Some of these barriers are necessary, but others may go beyond what is needed to address the policy objectives and the market failure(s) regulation is intended to remedy. The OECD developed in the late 1990s a set of Product Market Regulation (PMR) Indicators to assess how competition-friendly the regulatory framework of a country is across a range of sectors and regulatory areas. A regulatory framework that facilitates competition, for example, can stimulate productivity by encouraging the efficient allocation of resources and promoting innovation and growth. This paper examines a range of product markets, services, and network industries in Brazil, relying on the results of the PMR indicators, and identifies areas where country’s regulations could be brought more in line with international best practices. These include the governance of state-owned enterprises, interaction between policy makers and interest groups, network sectors, and professional services.
In 2021, an OECD team undertook analysis of Republic of Türkiye’s data from two international assessments – the OECD Programme for International Student Assessment (PISA) and the International Association for the Evaluation of Educational Achievement (IEA)’s Trends in International Mathematics and Science Study (TIMSS). The analysis aimed to understand how student performance in Türkiye has evolved over time and whether factors related to student background – such as gender or socio-economic background – are associated with performance. This policy perspective uses the findings from the PISA and TIMSS analysis to identify policy options to help Türkiye to raise performance and improve equity.
This policy perspective provides suggestions across five policy areas for Türkiye to create a stronger policy focus on overcoming obstacles for more equal opportunities for students.
OECD nations face particularly powerful fiscal pressures over the coming decades. To handle these pressures without lapsing into fiscally irresponsibility, they will need to make courageous decisions on both the expenditure and tax sides. This paper looks at the implications of this for budgeting. It focuses particularly on reallocation and expenditure discipline, including the role of spending review, and the design and implementation of expenditure ceilings. The question of the relevance of net worth as a fiscal policy measure is also discussed, as is the potential for efficiency savings to relieve the fiscal pressure on governments.
Digital transformation affects every aspect of our lives, providing new spaces and tools for us to connect, work, consume, and enjoy our rights. It offers a multitude of social and economic opportunities, but also brings new and complex risks. An empowering and safe digital environment that puts people first is therefore a core policy goal of the digital age. Through the lens of a fictional family navigating these opportunities and risks, this paper looks at how digital transformation impacts us as individuals, be it as citizens, consumers, or workers. It outlines the policy landscape, and describes the international, multi-stakeholder, and nuanced efforts needed to strike a balance between different rights, interests, and values. A background paper for the 2022 Digital Economy Ministerial meeting, this paper supports senior policy makers in designing and achieving a human-centric digital transformation.