What is the OECD? - The ultimate guide

The OECD, or Organization for Economic Co-operation and Development, is an international organization that plays a key role in global economic policy. In this comprehensive article, you will learn everything you need to know about the OECD, its goals, functions and importance.

OECD briefly explained

• NameOECD stands for "Organization for Economic Co-operation and Development"
• English nameOrganization for Economic Co-operation and Development
• Foundation: 1961
• SeatParis, France
• Members: 38 countries (as of 2024)
• Main objective: Promoting economic growth and social prosperity worldwide

History of the OECD

The OECD was founded in 1961 as the successor organization to the OEEC (Organization for European Economic Cooperation). The OEEC was founded in 1948 as part of the Marshall Plan to coordinate the reconstruction of Europe after the Second World War. With the founding of the OECD, the focus expanded from European to global economic cooperation.

What does the Organization for Economic Cooperation and Development do?

1. Policy adviceThe OECD advises governments on the development of effective policies to improve the economic and social situation of their citizens.
2. Research and analysisIt collects and analyzes data on various topics such as the economy, education, the environment and social issues.
3. Standard settingThe OECD develops international standards, e.g. to combat tax evasion or for responsible corporate behavior.
4. Promoting cooperationIt brings countries together to find joint solutions to global challenges.
5. Monitoring and forecastsThe OECD monitors economic developments and prepares forecasts.
6. Educational studiesThe OECD conducts the well-known PISA study, which compares education systems worldwide.

Why is the OECD important?

• It promotes the exchange of experience between countries and supports best practices.
• Their research and recommendations influence political decisions worldwide.
• The OECD contributes to the promotion of sustainable economic growth and fair trade.
• It plays an important role in tackling global challenges such as climate change and social inequality.
• The OECD standards are regarded as a global reference in many areas, such as anti-corruption and corporate governance.

OECD member countries

The OECD comprises 38 member countries, including:

• European countries: Germany, France, Great Britain, Switzerland, Italy, Spain, Netherlands
• North American countries: USA, Canada
• Asia-Pacific countries: Japan, South Korea, Australia, New Zealand
• Latin American countries: Mexico, Chile, Colombia

It is important to note that not all EU countries are automatically OECD members. For example, Bulgaria, Croatia, Romania and Cyprus are EU members, but not OECD members.

OECD Participants Country List

1. Australia
   • Accession: 1971
   • Region: Oceania
   • Capital: Canberra
   • Population: 25 million
   • GDP per capita: USD 55,000
2. Belgium
   • Accession: 1961
   • Region: Europe
   • Capital: Brussels
   • Population: 11.5 million
   • GDP per capita: USD 51,000
3. Chile
   • Accession: 2010
   • Region: South America
   • Capital: Santiago
   • Population: 19 million
   • GDP per capita: USD 15,000
4. Denmark
   • Accession: 1961
   • Region: Europe
   • Capital: Copenhagen
   • Population: 5.8 million
   • GDP per capita: USD 67,000
5. Germany
   • Accession: 1961
   • Region: Europe
   • Capital: Berlin
   • Population: 83 million
   • GDP per capita: USD 54,000
6. Estonia
   • Accession: 2010
   • Region: Europe
   • Capital: Tallinn
   • Population: 1.3 million
   • GDP per capita: USD 23,000
7. Finland
   • Accession: 1969
   • Region: Europe
   • Capital: Helsinki
   • Population: 5.5 million
   • GDP per capita: USD 49,000
8. France
   • Accession: 1961
   • Region: Europe
   • Capital: Paris
   • Population: 67 million
   • GDP per capita: USD 44,000
9. Greece
   • Accession: 1961
   • Region: Europe
   • Capital: Athens
   • Population: 10.7 million
   • GDP per capita: USD 20,000
10. Ireland
    • Accession: 1961
    • Region: Europe
    • Capital: Dublin
    • Population: 4.9 million
    • GDP per capita: USD 94,000
11. Iceland
    • Accession: 1961
    • Region: Europe
    • Capital: Reykjavík
    • Population: 360,000
    • GDP per capita: USD 68,000
12. Israel
    • Accession: 2010
    • Region: Middle East
    • Capital: Jerusalem
    • Population: 9.2 million
    • GDP per capita: USD 44,000
13. Italy
    • Accession: 1962
    • Region: Europe
    • Capital: Rome
    • Population: 60 million
    • GDP per capita: USD 35,000
14. Japan
    • Accession: 1964
    • Region: Asia
    • Capital: Tokyo
    • Population: 126 million
    • GDP per capita: USD 40,000
15. Canada
    • Accession: 1961
    • Region: North America
    • Capital: Ottawa
    • Population: 38 million
    • GDP per capita: USD 49,000
16. Colombia
    • Accession: 2020
    • Region: South America
    • Capital: Bogotá
    • Population: 50 million
    • GDP per capita: USD 6,400
17. South Korea
    • Accession: 1996
    • Region: Asia
    • Capital: Seoul
    • Population: 51 million
    • GDP per capita: USD 34,000
18. Latvia
    • Accession: 2016
    • Region: Europe
    • Capital: Riga
    • Population: 1.9 million
    • GDP per capita: USD 18,000
19. Lithuania
    • Accession: 2018
    • Region: Europe
    • Capital: Vilnius
    • Population: 2.8 million
    • GDP per capita: USD 19,000
20. Luxembourg
    • Accession: 1961
    • Region: Europe
    • Capital: Luxembourg
    • Population: 620,000
    • GDP per capita: 118,000 USD
21. Mexico
    • Accession: 1994
    • Region: North America
    • Capital: Mexico City
    • Population: 128 million
    • GDP per capita: USD 9,900
22. New Zealand
    • Accession: 1973
    • Region: Oceania
    • Capital: Wellington
    • Population: 5 million
    • GDP per capita: USD 43,000
23. Netherlands
    • Accession: 1961
    • Region: Europe
    • Capital: Amsterdam
    • Population: 17.4 million
    • GDP per capita: USD 57,000
24. Norway
    • Accession: 1961
    • Region: Europe
    • Capital: Oslo
    • Population: 5.4 million
    • GDP per capita: 81,000 USD
25. Austria
    • Accession: 1961
    • Region: Europe
    • Capital: Vienna
    • Population: 8.9 million
    • GDP per capita: USD 53,000
26. Poland
    • Accession: 1996
    • Region: Europe
    • Capital: Warsaw
    • Population: 38 million
    • GDP per capita: USD 15,000
27. Portugal
    • Accession: 1961
    • Region: Europe
    • Capital: Lisbon
    • Population: 10.3 million
    • GDP per capita: 24,000 USD
28. Sweden
    • Accession: 1961
    • Region: Europe
    • Capital: Stockholm
    • Population: 10.3 million
    • GDP per capita: USD 54,000
29. Switzerland
    • Accession: 1961
    • Region: Europe
    • Capital: Bern
    • Population: 8.5 million
    • GDP per capita: USD 87,000
30. Slovakia
    • Accession: 2000
    • Region: Europe
    • Capital: Bratislava
    • Population: 5.5 million
    • GDP per capita: USD 19,000
31. Slovenia
    • Accession: 2010
    • Region: Europe
    • Capital: Ljubljana
    • Population: 2.1 million
    • GDP per capita: USD 26,000
32. Spain
    • Accession: 1961
    • Region: Europe
    • Capital: Madrid
    • Population: 47 million
    • GDP per capita: USD 30,000
33. Czech republic
    • Accession: 1995
    • Region: Europe
    • Capital: Prague
    • Population: 10.7 million
    • GDP per capita: USD 23,000
34. Turkey
    • Accession: 1961
    • Region: Europe/Asia
    • Capital: Ankara
    • Population: 84 million
    • GDP per capita: USD 9,000
35. Hungary
    • Accession: 1996
    • Region: Europe
    • Capital: Budapest
    • Population: 9.8 million
    • GDP per capita: USD 16,000
36. United Kingdom
    • Accession: 1961
    • Region: Europe
    • Capital: London
    • Population: 67 million
    • GDP per capita: USD 46,000
37. United States
    • Accession: 1961
    • Region: North America
    • Capital: Washington, D.C.
    • Population: 330 million
    • GDP per capita: USD 63,000
38. Costa Rica
    • Accession: 2021
    • Region: Central America
    • Capital: San José
    • Population: 5.1 million
    • GDP per capita: USD 12,000

Notes:

• The population figures and GDP values are rounded and may vary.
• The European Union participates as an observer in the work of the Organization for Economic Cooperation and Development.
• Key partners: Brazil, China, India, Indonesia and South Africa
• The Organization for Economic Cooperation and Development has regional initiatives in Africa, Eurasia, the Middle East and North Africa, Latin America and the Caribbean, Southeast Asia and Southeast Europe.

OECD initiative: Common Reporting Standard (CRS) for international data exchange

The Organization for Economic Cooperation and Development has introduced the Common Reporting Standard (CRS) has taken a significant step towards promoting international tax transparency and combating tax evasion. The CRS, which was adopted in 2014, is a global standard for the automatic exchange of financial account information between tax authorities worldwide. This system requires financial institutions to report information on non-resident accounts to their local tax authorities, which then automatically exchange this data annually with the tax authorities. Tax authorities of the account holders' home countries exchange. By implementing the CRS, over 100 countries have committed to exchanging financial data, which significantly limits the opportunities for tax evasion through offshore accounts and promotes global tax justice.

Here you will find Non-CRS countries with good banks for the 2024 financial year

Structure and financing of the organization

• FinancingThe Organization for Economic Cooperation and Development is financed by contributions from its member countries.
• BudgetThe annual budget is around 400 million euros (as of 2022).
• ManagementAt the top is the Secretary General (currently Mathias Cormann).
• Decision-making bodyThe Council, consisting of representatives from all member states, is the supreme decision-making body.
• PersonnelIt employs more than 3000 people from various countries.
• Publications: Over 300 reports are published every year.
• eventsAbout 500 international meetings are organized each year.

OECD and global challenges

The OECD is involved in various areas to tackle global challenges:

1. Climate changePromotion of strategies to reduce greenhouse gas emissions and adapt to climate change.
2. Digitization: Examination of the effects of the digital transformation on the economy and society.
3. Social inequalityDevelopment of policies to reduce income and wealth inequalities.
4. Tax justice: Combating Tax evasion and the promotion of a fair international tax system.
5. EducationImproving the quality of education and promoting lifelong learning.

Criticism and controversy

Despite its important role, the OECD also faces criticism:

• Focus on developed countriesCritics argue that the OECD places the interests of rich countries above those of developing countries.
• TransparencyThere are calls for more transparency in the organization's decision-making processes.
• Influence of companiesSome see too strong an influence of large companies on OECD policy.
• EffectivenessThe actual effectiveness of the OECD recommendations is sometimes questioned.

Frequently asked questions (FAQ)

Is China a member of the OECD?

No, China is not a member, but works closely with the organization as an important partner.

Is Russia a member of the OECD?

No, Russia is not a member of the OECD. Accession negotiations were suspended in 2014 due to the Crimea crisis.

How does the OECD differ from other international organizations?

In contrast to organizations such as the World Bank or the IMF, the O.E.C.D. does not grant loans or make binding decisions. Its main focus is on research, analysis and policy recommendations.

Who can become an OECD member?

Countries that are committed to a market economy and democratic principles can apply for membership. The accession process is lengthy and requires extensive reforms.

How does the OECD influence education policy?

Through the PISA studies and other education reports, the Organization for Economic Cooperation and Development has considerable influence on national education debates and reforms.

Conclusion

The Organization for Economic Cooperation and Development plays a central role in international economic cooperation. As a "think tank" for developed countries, it provides a platform for the exchange of ideas and best practices. Its research, analyses and recommendations influence economic policy decisions worldwide.

The organization helps countries to learn from each other and work together towards a better future. Whether it is about economic growth, education, environmental protection or social justice - the OECD is at the forefront of finding solutions to global challenges and promoting sustainable development.

In an increasingly interconnected world, the organization's role as a forum for international cooperation and a source of sound policy analysis is likely to continue to grow in importance. At the same time, it will continue to face the challenge of proving its relevance to a changing global economic order.