Browse by: "2018"

Against a backdrop of the widening income distribution in most countries, OECD governments need to formulate policies that support sustainable and inclusive economic growth. Tax policies play a crucial role in this endeavour. Both tax theory and mounting empirical evidence suggest that many countries could achieve both higher and more broadly shared income growth. Many countries, however, seem hesitant to fundamentally restructure their tax systems to achieve higher and more inclusive growth. This reluctance begs a key question: Why forego tax policy reforms that hold the obvious promise of win-win outcomes of both higher and more inclusive growth? To offer some concrete answers to this question, this paper reports the findings of a synthesis of cross-country empirical work on the ranking (in terms of efficiency and distributional impact) of major tax instruments on the one hand, and, on the other, country-specific tax policy assessments reported in several dozen OECD Economic Surveys since 2008. The paper identifies a wide range of factors, some common to many countries and some country-specific, that prevent governments from adopting tax structures more favourable to inclusive growth. These include political economy forces, legal obstacles, administrative constraints, and intergovernmental fiscal arrangements.

The countries that compromise the Association of Southeast Asian Nations (ASEAN) have expanded their involvement in global agro-food trade through strong regional production growth and increasing consumer demands from population growth and higher incomes. Regional and international agro-food markets have thus become an important source of income and food for the regions producers and consumers. However, growth in trade has lessened in recent years with projections suggesting a further slowing over the medium term. This study explores the role that agro-food trade and participation in agro-food global value chains (GVC) has had on regional agro-food sectors and current barriers that are holding the region back from unlocking the full benefits of further integration into regional and global agro-food markets. It finds that although GVC engagement has increased regional agro-food growth between 2004 and 2014, gaps remain in the level of regional integration. Results from the analysis suggest that reducing the remaining tariff and non tariff barriers, and creating an enabling environment to allow agricultural producers to better access service inputs, will help spur sector growth and agricultural incomes.

Tax and spending reforms offer numerous opportunities to promote inclusive growth. There is potential for so-called win-win reforms that simultaneously boost economic output and enhance income equality. Other changes in the structure of public finances will produce benefits only along a single dimension, while some involve trade-offs between average income gains and adverse distributional effects. Empirical analyses of the experience of OECD countries provide evidence about which tax and spending reforms influence prosperity and income distribution -- and by how much.

Protecting and supporting refugees is an important responsibility of the international community. The Global Compact on Refugees (GCR) was proposed in 2018 to establish a more predictable and equitable sharing of burdens and responsibilities among United Nations Member States when it comes to fulfilling these obligations. This working paper presents and analyses the findings of a survey circulated to members of the OECD’s Development Assistance Committee (DAC) between July and September 2018. The survey investigated trends in official development assistance (ODA) and plans for future funding to programmes and projects that support refugees and their host communities, as well as other, non-funding efforts and responses that DAC members are making in support of refugees. The findings of this paper will establish a baseline for monitoring progress toward “funding and effective and efficient use of resources” as one of the key tools for meeting the commitments of the GCR. The paper examines some of the strengths and challenges of current donor practices, and recommends a set of priorities to guide future donor support and engagement in order to promote good donorship and to support the international community in meeting the GCR’s objectives.

The effects of six common forms of fisheries support are estimated using a bioeconomic model of the global fishery. The results show that all have the potential to provoke overfishing, to lead to fish stocks being overfished, to encourage illegal, unreported or unregulated (IUU) fishing and to increase fleet capacity, but that their effects can vary significantly both in scale and how they are distributed at the fleet level. The fisheries management system can mitigate, though not entirely eliminate, these impacts. Supports based on reducing the cost of inputs purchased by fishers provoke the greatest increase in fishing effort, with associated risks of overfishing. This includes fuel subsidies, which are also shown to deliver less than 10% of their value in actual benefits to fishers in some cases, making them the least effective means of transferring income to fishers of those evaluated. Payments based on improving fishers’ business operations provided the greatest benefit to fishers and had relatively less tendency to increase fishing effort. If only USD 5 billion in fuel support was converted into support of this type, fishers would see increased income of more than USD 2 billion, while at the same time reducing effort and improving fish stocks. Such a change would also provide relatively more benefit to smaller fishers.

Russia is a federation of more than 80 regions spanning across a huge territory. Natural resource endowment, inherited industrial specialization, remoteness and climate conditions contribute to large regional disparities. This paper presents an empirical framework model for assessing determinants of regional growth in Russia between 2004 and 2015 with an extension to include sub-national fiscal policies. Baseline results show convergence rates of regional GDP per capita in line with the 2% “iron law of convergence” between countries. Capital investment, and public investment in particular, is a stronger driver of regional growth than in most OECD countries.
Natural-resource rich regions are growing faster, and oil price shocks have little economic impact in these regions, pointing at Russia’s centralized tax and transfer system. Subnational current government expenditure is associated with lower growth and slower regional convergence, suggesting low sub-national spending efficiency. There is also weak evidence that sub-national investment yields higher returns than federal government investment. Transfers have mixed effects depending on their nature. Budget equalization grants tend to slow regional growth as they reduce incentives to improve spending efficiency. On the other hand earmarked matching grants tend to spur growth and convergence as they direct resources towards more productive spending.

The concept of megaregions is increasingly put forward among academics and policy makers as a new scale of economic co-ordination and social organisation. A megaregion is most commonly understood as an economic unit that comprises an agglomeration of cities and its less dense hinterlands, which are linked through infrastructure, economic connections, settlement patterns and land use, topography, an environmental system or a shared culture and history that together shape a common interest for the wider region. While there is an extensive literature on the potential benefits of a megaregion, work has been more limited in terms of identifying megaregions in an international context. This paper introduces an approach to delineate potential megaregions in the OECD.

This report provides an overview of methodologies to evaluate the effectiveness of policy instruments for biodiversity, covering impact evaluation, cost-effectiveness analysis and other more commonly used approaches. It then provides an inventory of biodiversity-relevant impact evaluation studies, across both terrestrial and marine ecosystems. The report concludes with lessons learned, policy insights and suggestions for further work.

This paper builds an innovative composite world trade cycle index (WTI) by means of a dynamic factor model to monitor and perform short-term forecasts in real time of world trade growth of both goods and (usually neglected) services. The selection of trade indicator series is made using a multidimensional approach, including Bayesian model averaging techniques, dynamic correlations and Granger non-causality tests in a linear VAR framework. To overcome real-time forecasting challenges, the dynamic factor model is extended to account for mixed frequencies, to deal with asynchronous data publication and to include hard and survey data along with leading indicators. Nonlinearities are addressed with a Markov switching model. Simulations analysis in pseudo real-time suggests that: i) the global trade index is a useful tool to track and forecast world trade in real time; ii) the model is able to infer global trade cycles precisely and better than the few competing alternatives; and iii) global trade finance conditions seem to lead the trade cycle, in line with the theoretical literature.

The paper describes inequality trends in selected emerging economies (Brazil, Colombia, Costa Rica, China, India, Indonesia and South Africa) in a range of monetary (i.e. income) and non-monetary dimensions of people’s life (i.e. education, health status, employment and subjective well-being). Inequalities are analysed not only in terms of overall dispersion, but also as gaps between population groups defined by specific characteristics (i.e. sex, age, educational attainment and place of living). To the extent made possible by the nature of available data, measures of income inequality for these emerging countries, as well as for 7 Latin American countries (Bolivia, Dominic Republic, Ecuador, Panama, Paraguay, Peru and Uruguay), are based on concepts and definitions similar to those used by the OECD for its member countries. All the emerging economies covered in the paper show levels of income inequality higher than in the five most unequal OECD countries, while the picture is more mixed when it comes to inequalities in other dimensions of people’s well-being. An annex complements the analysis by presenting an assessment of the quality of the available data on income distribution for the emerging countries covered in the paper.

The Czech health care system is doing well in terms of health outcomes compared to other Central East European economies that inherited similar health systems after the transition and has been converging to OECD averages. However, benchmarking the Czech health system to countries with comparable institutional setting points to potential for efficiency gains. This paper assesses the performance and emerging key challenges of the Czech health system, and provides recommendations to adapt the system to remain effective and financially sustainable in the context of an ageing society. Further, the contribution of various disincentives in the system on the supply and the demand side of health care are discussed.
This Working Paper relates to the 2018 OECD Economic Survey of Czech Republic. (www.oecd.org/eco/surveys/economic-survey-czech-republic.htm).

Les résultats de l’Évaluation des compétences des adultes confirment qu’il existe un lien fort entre le niveau de performance en littératie et la fréquence des mères adolescentes. Les pays où ce lien est le plus fort pourraient encourager davantage la prévention et l’accompagnement des grossesses avant 20 ans au sein des populations les plus exposées. Ces actions sont d’autant plus cruciales qu’il s’agit non seulement de protéger les adolescentes les plus fragiles mais aussi les enfants à naître contre les conséquences à long terme de ces naissances précoces.

The results of the Adult Skills Assessment confirm that there is a strong link between the level of literacy proficiency and the rate of teenage motherhood. Countries where this link is strongest could further encourage the prevention of and support with pregnancies before the age of 20 in the groups at highest risk. These measures are all the more crucial as they are about protecting not just the most vulnerable teenagers but also their prospective children against the long-term consequences of these early births.

In the 21st century care, the old paradigm “because the doctor said so” no longer holds. Individuals are now seeking ways to understand their health options and take more control over their health decisions. But this is not an easy task. Professionals continue to use medical jargon, drug instructions are not always clear, and health information in clinical settings continue to be complex and challenging to navigate. Widespread access to digital technologies offset some of these barriers by democratising access to health information, providing new ways to improve health knowledge and support self care. Nonetheless, when health information is misused or misinterpreted, it can wrongly influence individuals’ preferences and behaviour, jeopardise their health, or put unreasonable demands on health systems.

Over the past decades, leaders and citizens in many countries have lamented the lack of transparency in government and declining citizens’trust in government. South Korea is not an exception. In order to restore trust in government, the Korean government has made considerable efforts to adopt and promote various citizen participation programmes at all levels of government in an effort to ensure accountability, improve transparency and trust in government. This article first discusses the importance of citizen participation as a means of improving transparency and trust in government. It then introduces offline and online citizen participation programmes run by central agencies and local governments and highlight how those citizen participation programmes have evolved. As one specific form of citizen participation practice, this article focuses on the practice of Participatory Budgeting (PB) as an effort to enhance transparency and citizens’trust in government by opening its processes and disclosing budgeting information to the public. Most especially, this article reveals the results of a PB survey of local governments in Korea and discusses why and how PB has been adopted, implemented, and designed to improve budget-related governance structure, policy-making processes, and outputs such as efficiency, accountability, transparency, and trust in government. Lastly, this article discusses policy implications for enhancing public trust in government through PB.

During the last two decades, France introduced a series of far-reaching reforms intended to bring about greater transparency towards Parliament, autonomy and flexibility to public managers, and rigor in to fiscal policy making.

The Philippines has placed a strong emphasis on achieving Universal Health Coverage. In recent years, earmarked funds from new alcohol and tobacco taxes have substantially increased government funds available for health. This additional funding offers great potential to improve access and health outcomes, as long as the money is well spent. An important pre-requisite for effective spending is a strong budgetary process for health. In terms of budget formulation and planning, the Philippines government has – at the national level – introduced a comprehensive package of public financial management reforms that apply across all sectors.

This article describes the changes that have taken place in the work of the Budget Office of the central government as a consequence of the transition from the traditional budget process, often referred to as “incremental budgeting”, to top-down budgeting. This transition has taken place in most OECD countries in the course of the last three decades and has generally led to the end of the century-old trend of growth of the public sector relative to GDP. As a consequence of this transition the role of the budget office has shifted from operational expenditure control to supervision on the maintenance of the medium term expenditure framework. In general this has led to a more co-operative relationship between the Budget Office and the financial divisions of the line ministries. This article is based on case studies in three countries, namely the United Kingdom, the Netherlands and Slovenia and highlights the differences in their budgeting procedures and the extent to which the transition to top-down budgeting has been implemented.