Browse by: "2015"

Although the budget deficit is much discussed in political debate and economic research, there is no agreement on how it should be measured. There are at least four options, which can be called the cash deficit, the financial deficit, the full-accrual deficit, and the comprehensive deficit. Each is informative, but each has problems of relevance or reliability. Some are more vulnerable to manipulation involving assets and liabilities that are unrecognised in the underlying accounting, others to manipulation involving the mismeasurement of recognised assets and liabilities. Governments should publish all four in a form that reveals their interrelationships.

JEL classification: H6, H61, H62
Keywords: Accrual accounts, comprehensive accounts, liabilities, budget deficit

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

A large number of countries are implementing accrual reporting to provide better accountability for the stewardship of public finances to their citizens. Far fewer nations have moved to an accrual basis for their government budgetary decisionmaking. Those few countries that have made the move do not regret doing so, having achieved significant benefits from that reform. This paper looks again at the benefits of accrual budgeting, at some of the major arguments that have impeded its international implementation, and how those issues have been addressed in the countries that have successfully adopted accrual budgeting. It suggests that the international public financial management community should revisit accrual budgeting, and that efforts to implement it should be redoubled, not because it is a panacea for all budgeting and fiscal problems, but rather because it provides a stable foundation for improving fiscal and budgetary decision-making and for providing fairer and more complete budgetary information to citizens.

JEL Classification: H10, H11, H61, H83
Key words: Accrual budget, accrual report, fiscal management, fiscal performance, public finance, accountability

This research analyses the improvements to corporate governance within Japanese listed companies and the influence of institutional shareholders. Firstly, in order to analyse the external factors that have promoted the recent corporate governance reform, the report starts with an overview of the changes in the Japanese market post 1970s. The main players before the 1990s were the banks, who provided credit to companies as well as being shareholders. Corporate governance in Japan was characterised by the “main bank” system. However, after the “bubble economy” burst in the early 1990s, institutional investors, including domestic pension funds and foreign asset managers, started to have a greater presence. Secondly, the report analyses the recent developments in corporate governance within listed companies. Developments were influenced considerably by institutional shareholders through proxy voting. Further, the report reviews the legislation and relevant rules on corporate governance including the reform of the Companies Act and the Cabinet Office Ordinance on Disclosure of Corporate Information. Thirdly, the report examines the influence of institutional shareholders and their activities towards good corporate governance. In 2009, the “Report by the Financial System Council’s Study Group on the Internationalization of Japanese Financial and Capital Markets” was published and asset managers, such as investment trusts and investment advisory companies, started to disclose policy and results of proxy voting. In February 2014, pursuant to the recommendation of the “Japan Revitalization Strategy 2013”, Japan’s Stewardship Code was published and it is now expected that institutional shareholders play a significant role to engage with investee companies and improve corporate governance within them. The report also analyses the historical changes to practices within shareholder meetings along with examination of the role that institutional shareholders have played in the improvement of corporate governance within Japanese listed companies.

This paper examines the use of two forms of non-standard work contracts in Russia with data from an enterprise survey for the years 2009 to 2011. Non-standard work contracts are less costly and more flexible for employers. Internal adjustment in form of wage cuts or unpaid leave is not covered by the Labour Code and earlier practices to impose such measures are less tolerated. Therefore more firms use non-standard work contracts for external flexibility. Statistical analysis shows that companies using non-standard work contracts have similar unobserved characteristics and consider fixed-term contracts and agency work as complements. The main concern for policy is the growing danger of duality following the asymmetric distribution of adjustment costs for workers.

Since 1995 when OECD began conducting Economic Surveys of the Russian Federation many policy recommendations relating to structural reform and framework conditions have been made. This paper is an update of an earlier paper that described actions taken up to October 2011 (Vaziakova et al., 2011). It expands the Annex A.1 of the 2013 OECD Economic Survey of the Russian Federation and provides a summary table of the policies implemented. This Working Paper relates to the 2014 Economic Survey of the Russian Federation www.oecd.org/eco/surveys/economic-survey-russian-federation.htm

While public regulation in food and agriculture is attracting attention at both policy and research level for their potential implications on international food trade, policy implications of agricultural standards – understood to be legally not mandatory and hence voluntary – are much less well understood. Yet, environmental and organic standards have grown in importance in agriculture and agri-food chains, making also their potential trade effects more relevant. In this context, understanding the linkages between governments and standards has become a key element in the debate. This report analyses possible roles of public authorities in the area of environmental and organic standards, including policy objectives, options for interaction and means for the use of standards for achieving public policy goals. It identifies the main objectives behind government activity on environmental and organic standards in the area of consumer protection and fraud prevention, the enabling of functioning food markets and the improvement of efficiency in the design, implementation and monitoring of public policies. Countries have taken very different approaches towards dealing with standards on organic agriculture which frequently, though not always, are seen as a subset of environment-related standards. Choices for organic standards range between market self-regulation and the development of government-owned public standards. More generally, the level of public intervention often reflects OECD governments’ perception on the environmental benefits of organic agriculture itself.

This report compares the dynamics of productivity growth in the last decade in the dairy farm sector of three EU Member States: Estonia, the Netherlands and the United Kingdom (England and Wales). The evolution of the dairy farm sector in these countries is characterised by a decline in the number of dairy farms and an increase in the average herd size per farm. Policy factors have a strong impact on productivity growth at the farm. In Estonia, the dairy farm sector has expanded significantly in recent years and the productivity growth of the sector is led largely by a resource reallocation in favour of a small number of large and productive farms. In the Netherlands, the dairy farm sector adjusted to the different policy environments over time and the productivity growth of the sector is driven largely by productivity improvement at the farm level through technological adoption and efficient resource use. In the United Kingdom, productivity growth comes from the exit of smaller farms and farm size expansion of the remaining farms.

This paper presents the services trade restrictiveness indices (STRIs) for logistics services. The STRIs are composite indices taking values between zero and one, zero representing an open market and one a market completely closed to foreign services providers. The indices are calculated for 40 countries, the 34 OECD members and Brazil, the People’s Republic of China, India, Indonesia, the Russian Federation and South Africa. The STRIs capture de jure restrictions. This report presents the first vintage of indicators for logistics services and captures regulations in force in 2014. The scores range from 0.08 to 1 for cargo-handling services, 0.04 to 1 for storage and warehouse services, 0.02 to 0.58 for freight transport agency services and 0.03 to 1 for customs brokerage services. It is observed that the regulatory profile differs across countries. In cargo-handling and storage and warehouse services, one country reserves all services provision to a statutory monopoly while another country reserves cargo-handling to a monopoly at port. Freight transport agency has the lowest average score among four subsectors while restrictions on foreign entry, restrictions on the movement of people and regulatory transparency significantly contribute to the results. One country is completely closed to foreign participation in customs brokerage services. The paper presents the list of measures included in the indices, the scoring and weighting system for calculating the indices and an analysis of the results.

This working paper explores avenues to improve public sector efficiency in Latvia, a catching-up and ageing economy where spending needs are large. Ensuring that spending allocated to core services (e.g. education, healthcare) is adequate to achieve convergence of policy outcomes to OECD upper standards is challenging. Efficiency gains in the tax system could bring additional revenues. The tax base should be expanded by reducing informality, strengthening tax administration and increasing property and environmentally related taxes, which are low by international standards. To reduce unemployment and income inequality, the tax-benefit system should also be revised as it is now relatively regressive and the tax wedge on low-income earners is high. Enhancing analytical, monitoring and assessment capacities should help to rein in wasteful expenditure and improve the prioritisation of spending. The reform of human resource management, public procurement, and state-local relations is also needed to deliver higher-quality and more cost-efficient public services.

Ce document livre un examen des travaux publiés à l'échelle internationale sur le rapport coût-efficacité des mesures axées sur l'offre qui permettent de réduire l'intensité des émissions de gaz à effet de serre agricoles en préservant ou renforçant la production. La présente étude analyse 65 études internationales récentes consacrées au rapport coût-efficacité de mesures agricoles d'atténuation, qui couvrent 181 activités différentes. Neuf études de cas de mesures d'atténuation largement appliquées illustrent, en général à partir d'une méthode d’estimation ascendante des coûts, les différences significatives du rapport coût-efficacité des mesures entre les pays et les études, dues en partie à des différences contextuelles. Les comparaisons entre ces études hétérogènes doivent être appréhendées avec toute la circonspection voulue, mais les résultats suggèrent que les mesures reposant sur l'efficience d'utilisation des engrais et l'amélioration génétique du bétail, ainsi que les possibilités d’amélioration de l'efficacité énergétique des engins et machines agricoles, sont considérées comme des solutions d'atténuation hautement performantes en terme de coût-efficacité dans les différents pays. Un premier examen des mesures publiques montre qu’il existe différentes solutions possibles pour encourager l'adoption de mesures économes et efficaces, allant de campagnes d'information à des stratégies d'incitation. Il convient d'approfondir l'analyse pour surmonter les difficultés d'estimation restantes et trouver comment les mesures d'atténuation peuvent s'inscrire dans le cadre plus vaste des stratégies climatiques, agricoles et environnementales.

This paper reviews the international literature on the cost-effectiveness of supply-side mitigation measures that can reduce the emissions intensity of agriculture while maintaining or increasing production. Sixty-five recent international studies of cost-effectiveness covering 181 individual activities are reviewed. Nine case studies of well covered mitigation measures, generally using a cost-engineering approach, illustrate significant differences in the cost-effectiveness of measures across countries and studies, in part due to contextual differences. Although caution needs to be exercised in comparing heterogeneous studies, the results suggest that measures based on fertiliser use efficiency, cattle breeding, and potentially improving energy efficiency in mobile machinery, are often considered highly cost-effective mitigation measures across countries. A preliminary overview of policy highlights the existence of a range of options to encourage the adoption of cost-effective measures, from information to incentive-based policies. Further analysis is needed to address remaining estimation challenges and to help determine how mitigation measures may be embedded into broader climate, agricultural and environmental policy frameworks.

Much of the convergence of the Latvian economy needs to come from productivity increases. To achieve this, policy makers should do more to facilitate the integration of the economy into global trade and promote competitive business environment. By benchmarking Latvia vis-à-vis the other Baltic but also some CEE peers, this paper identifies potential for decreasing the regulatory burden, removing trade and investment barriers and strengthening the competitive business environment as well as general framework conditions such as judiciary and access to finance. Furthermore, to ensure that knowledge transfer – essential for increasing productivity – does take place, reforms of the vocational education and training system, of lifelong learning and of policies for research and development, currently under implementation, have yet to deliver.

Emergency departments are the front line of health care systems and play a critical role in ensuring an efficient and high-quality response for patients in stress or crisis situations. A growing demand for emergency care might however reduce patients’ satisfaction (through waiting times), increase health provider workload and adversely affect quality of care. This working paper begins with an overview of the trends in the volume of emergency department visits across 21 OECD countries. It then explores the main drivers of emergency department visits in hospital settings, paying attention to both demand and supply side determinants. Thereafter, national approaches instituted by countries to reduce the demand for emergency care and to guarantee a more efficient use of emergency resources are presented.

En 2013, la grande majorité des adultes de la plupart des pays de l’OCDE étaient au moins diplômés du deuxième cycle du secondaire, faisant de la réussite de ce niveau d’enseignement le seuil minimal à atteindre pour réussir son entrée sur le marché du travail et se maintenir dans l’emploi ou poursuivre ses études. Les jeunes quittant le système scolaire avant la fin du deuxième cycle du secondaire rencontrent non seulement des difficultés sur le marché du travail, mais présentent également un niveau particulièrement faible de compétences cognitives par rapport aux diplômés du deuxième cycle du secondaire. Chez les 15-29 ans, les premiers sont ainsi deux fois plus susceptibles que les seconds d’obtenir de faibles scores en numérative. En moyenne, dans les pays de l’OCDE, le taux de chômage des 15-29 ans ne faisant plus d’études est inférieur de 13 points de pourcentage chez les diplômés du deuxième cycle du secondaire par rapport à celui observé chez les jeunes n’ayant pas atteint ce niveau de formation. L’obtention d’un diplôme de l’enseignement tertiaire réduit encore ce taux de 5 points de pourcentage.

In most OECD countries, the large majority of adults had at least an upper secondary qualification in 2013, making the completion of upper secondary education the minimum threshold for successful labour market entry and continued employability or the pursuit of further education. Young people who left school before completing upper secondary education face difficulty in the labour market but also have particularly low cognitive skills compared with upper secondary graduates. Those aged 15-29 who left school before completing upper secondary education are twice as likely to have low numeracy scores than those with an upper secondary education. On average across OECD countries, the unemployment rate among 15-29 year-olds not in education is 13 percentage points lower among those with an upper secondary education than for those without. Having a tertiary qualification reduces unemployment rates by a further five percentage points.

This paper presents an assessment of the competiveness performance of Swiss food industries. The approach taken here is to measure revealed performance, relying on indicators such as market performance, trade success and revealed comparative advantage indicators. The analysis of competitiveness examines the ex post performance of the industry in Switzerland compared to the same industry in benchmark countries in the European Union.

This paper reviews a number of OECD data sources to examine their potential for establishing indicators which can contribute to monitoring progress towards two of the 2011-2020 Aichi Biodiversity Targets under the Convention on Biological Diversity (CBD), namely Target 3 on Incentives and Target 20 on Resource Mobilisation. Aichi Target 3 refers to the need to eliminate, phase out, or reform incentives, including subsidies, harmful to biodiversity and to develop and apply positive incentives for the conservation and sustainable use of biodiversity. Aichi Target 20 refers to the need to substantially increase the mobilisation of financial resources from all sources to effectively implement the Strategic Plan for Biodiversity 2011-2020. The objectives of this work were twofold, namely to (a) identify the indicator needs to monitor progress towards these two targets, and (b) examine to what extent existing relevant OECD datasets and monitoring systems can be used for these purposes, including the types of modifications to data collection methodology or classification that may be useful to better align the data sources with the indicator needs. Within this context, six data sources are reviewed and assessed, and gaps and data limitations as they pertain to the reporting purposes of the CBD are highlighted. Given the caveats that are raised, as well as the upcoming need to assess progress on the achievement of the Aichi Targets in 2020, the analysis here aims to provide policy-makers and negotiators with the information needed to consider whether existing OECD datasets could be used and built upon so as to further develop indicators that are useful for the CBD.

This paper examines changes in the steel-related export structure of the ten largest steelmaking economies between 2004 and 2014, in terms of the steel products exported and the market destination for those exports. To shed light on how exporters’ patterns of specialisation have changed in the period since 2004, indices of “Revealed Comparative Advantage” (RCA) are developed for a number of low, medium and high value-added steel products, indicating that export specialisation patterns may be changing noticeably as some steel producers in emerging economies move up the value chain and begin exporting more sophisticated steel products. The paper also assesses the role of innovation, as measured by patents, in determining the export structure of countries, and finds a positive correlation between innovation activity and export specialisation in higher value-added steel segments.