The report entitled Challenges for China’s Public Spending: Toward Greater Effectiveness and Equity, published earlier this year, identified education and healthcare as priority areas for public spending. Why does China need to spend more on education and health?

The Russian economy has now entered its seventh year of expansion, confounding almost everyone with an average real GDP growth of just under 6.8% per annum during 1999-2004. But the economy has come to depend heavily on the performance of a small number of natural resource sectors, above all oil. The trouble is, oil-sector growth has been slowing of late, despite record-high prices. Add to this a number of persistent institutional weaknesses, and doubts start to creep in about Russia’s capacity to sustain high growth over the longer term.

When the OECD recently co-launched a new Middle East and North Africa project (MENA) on investment and governance in Jordan in February, there was much talk in the air about change and a new era. Coming so soon after Iraq’s elections, this can only be expected, but to long-term observers in the region the rhetoric could have seemed all too familiar, not least because MENA has been promoted in various guises before. Every initiative has its time of course, but can this one work now?

OECD Secretary General Donald J. Johnston and ministers and senior officials from OECD countries joined heads of government and ministers from Arab states at a conference at the Dead Sea in Jordan on 6-7 February 2005 to launch a major programme to promote good governance for development in the region.

The OECD Anti-Bribery Convention is not just about morals and ethics in clean business practices. It is about fair play and levelling the playing field as well.

Who would question the value of numbers? They can add credibility to an argument, clinch a deal, or simply illuminate an issue. But they can also deceive, through misreading or even manipulation. Can we really rely on the statistics we read? In the build-up to a major international forum on “Statistics, Knowledge and Policy”, to be held 10-13 November in Palermo, Italy, we asked Enrico Giovannini, the OECD's chief statistician, for an “unofficial” view.

We all now know that weak corporate governance can have a real impact on investors, savers, retirees, creditors, employees and consumers, as well as on entire economies. Corporate failures from the US to Italy have demonstrated this. But what would the effects be on developing countries?

The revision of the OECD’s corporate governance principles provides a good example of how a more open and dialogue-oriented approach can ensure the global relevance of such instruments. The review involved not only consultation with civil society, labour and business in OECD countries, but was based on five years of policy dialogue in regions around the world, as well as putting the Principles to the test.

The newly revised OECD Principles of Corporate Governance were released on 22 April. The result is a stronger OECD instrument to help improve boardroom behaviour globally. And that means better business and stronger markets for everyone.

E-government can improve efficiency, increase citizen involvement and help achieve reform – but it is not enough just to open up a website and wait for visitors to start flooding in. Ireland tops the list of OECD countries when it comes to providing government services online, for instance, but actually using online services is apparently far more popular in Sweden.

Full convergence with international accounting and audit standards, better protection of minority investors, stronger enforcement of existing laws and regulations, and improved bank governance: these are some of the key recommendations in the white paper on corporate governance in Asia, published by the OECD in Tokyo in June.

Can technology bring better government? Education, healthcare and employment take precedence for most citizens over the simple question of whether they can email their senator or member of parliament. But government websites have changed from simply being static showcases to providing a virtual kiosk of essential government services.

I enjoyed your sense of irony in using a picture of the UK’s National Economic Development Council on the cover of OECD Observer to illustrate traditional views of corporate governance.

Your article, “Ukraine: A miracle in waiting?” (OECD Observer No. 234, October 2002) identifies the problems preventing Ukraine from realising its considerable potential. It also notes the positive changes introduced by the reformist government appointed three years ago and maintained – at least in part – by that government’s successor.

The Asian Roundtable on Corporate Governance, organised by the OECD in partnership with the World Bank, met in Kuala Lumpur, Malaysia, in March to establish regional reform priorities and to develop a White Paper on Corporate Governance in Asia. Scheduled for release in Tokyo on 11 June 2003, the White Paper will set forth a common policy agenda for corporate-governance reform in the Asian region.

Many people, governments and institutions were caught out by the sudden spate of corporate scandals that swept some OECD countries in the past several months. Whatever the cause of these scandals, they have cast a light on the ability of existing regulatory frameworks and principles to prevent abuses that have undermined public trust in companies and markets. This includes the OECD’s own benchmark, the Principles of Corporate Governance, first adopted in 1999. Now they need review and strengthening.

Governments produce mountains of paper every year. But one document can reasonably claim to be more important than all the rest: the budget. Government accounts for over half of GDP in some OECD countries. The budget sends out essential economic signals about broad public policy directions and so has an influence on market behaviour.

Congratulations on presenting Corporate Social Responsibility as very much an issue for governments and unions rather than just for companies – or at least I presume that was your intention with your cover and inside photo (OECD Observer No.234, October 2002).

Globalisation has drawn serious attention to the importance of core workers’ rights on a global basis. There is a strange paradox in the treatment of labour when it comes to mainstream debates about globalisation. Survey’s on foreign investors intentions suggest that in most sectors market access, good governance, skills and education levels are more important in attracting investment than low wages or submissive workers. Yet rather than improving living and working conditions, globalisation appears to pressure governments into reducing workers’ rights to minimise labour costs and attract foreign investment.

Just how much is the underground economy worth? And if “underground” items are by definition undeclared, whether sales of smuggled cigarettes or payment for casual work, how can governments hope to measure it? This is important, because policymakers rely on national accounts and GDP figures to take decisions, and if the figures are inaccurate the policy responses are likely to be off-centre too.

“Our competitors are our friends, our customers are the enemy.” Whether or not this sums up the cavalier attitude of cartels to business, they certainly appear to lack the service-oriented, open mentality today’s society expects.

Central government debt in OECD countries almost doubled between 1990 and 2000, to US$12,860 billion from US$7,180 billion a decade earlier as market-based financing of budget deficits continued to boost growth of the global sovereign bond markets. Some 84% of government borrowing requirements in the 1990s were met through marketable instruments, a new OECD study found.

Investment is partly about taking risks, though not just any risk. In fact, transparent systems where the judicial framework is efficient and corruption is low tend to receive more investment.

Family-run firms tend to believe that principles of good corporate governance do not really concern them. This is a mistaken view. The question is how to convince them.

Ten years ago at the Rio Summit, 50 business leaders pledged a commitment to sustainable development. That was the start of the World Business Council for Sustainable Development (WBCSD). Since then, we have trebled in size and hugely amplified the voice of business in widespread dialogue.

We are inundated these days with concerns about corporate governance. Corporate executives are under attack and major auditing firms are worried, as well they might be in the wake of the demise of one of their giants, Arthur Andersen. Enron, WorldCom, Tyco – what should our reaction be to these extraordinary and outrageous breaches of faith with shareholders andemployees?

The recent spate of US corporate failures and breakdowns in truthful accounting has undermined people’s faith in financial reporting, corporate leadership, and the integrity of markets the world over. The fact that the wave of scandals has come hot on the heels of a collapse in the high-tech bubble has a sharp ironic flavour.

Open government is fine in theory, but does not always happen in practice. One reason is the persistent difficulty of involving civil society in developing open government systems that really work. This was just one of the messages of a two-day international roundtable on building open government in southeast Europe, held in Ljubljana, Slovenia, in May.

Strengthening the relationship between a government and its citizens might seem to be such an obvious priority for democracies that it hardly needs spelling out. Yet governments everywhere have been criticised for being remote from the people, not listening enough and not seeking participation. Street protests from Seattle to Genoa may have grabbed most of the headlines, but less spectacular developments have included a steady erosion of voter turnout in elections, falling membership in political parties in virtually every OECD country and declining confidence in key public institutions.

World trade and globalisation depend on responsible business practices, if they are to win public confidence and deliver global prosperity. That is where codes of conduct come in, whether towards the environment, labour or other ethical rules. Almost all of the world’s 100 largest multinational enterprises have issued environmental codes or policy statements on health and safety. The majority of them have also issued statements addressing labour practices. But do these codes work?

The revised OECD Guidelines for Multinational Enterprises (MNEs) have a vital role to play in a world where big business and its activities are often viewed with deep-rooted suspicion by civil society organisations.

How the British government aims to put the citizen online

Only bearded men in mountain cabins want government to disappear. The rest of the population understands that yielding a certain amount of personal “sovereignty” is a fair trade for a few curbs on the effects of human frailty.

Most of us, when we hear corporate governance, tend to think of codes, like the well-known Cadbury Code, that have emerged over the past few years. These governance codes usually recommend that companies change their board structures and procedures to make the company more accountable to shareholders. Often they suggest increasing the number of independent directors on boards, separating the position of chairman and chief executive officer, introducing new board committees – such as the audit committee – and so on.