Governments and state-owned enterprises buy a wide variety of goods and services, from basic computer equipment to the construction of roads. But did you know that such public procurement represents some 10% to15% of GDP across the world?

Ensuring Environmental Compliance: Trends and Good Practices

Despite their progress in developing greenlaws and policies, OECD countries are noton track to achieve some of their key environmental goals and commitments.

Governments must put transparency and accountability at the heart of all rescue and reform measures if they are to regain public trust and investor confidence. Here is why.

Pension funds suffered a blow in the financial crisis. So did public confidence. How can pensions be made more secure?

If the general consensus is correct-that the roots of global economic crisis are in the financial system-then it follows that to resolve the crisis the global financial governance and financial market regulation must be fixed.

If there is one major lesson to draw from the financial crisis, it is that corporate governance matters.

The trouble with crises is that it is hard to predict which direction they will go. Concerted efforts can help reduce the risk of a deterioriation, but not guarantee it.

“The Chinese government rightly advocates firm opposition to trade and investment protectionism, as emphatically stated by Premier Wen Jiabao on several occasions in the past few weeks. As it did a decade ago during the Asian crisis, China has set itself firmly against inward retrenchment in the face of economic downturn. We celebrate this commitment at OECD.

Pressure is mounting to arrest climate change, so it's hardly surprising that people around the world are being urged to use public transportation. After all, an overall strategy that includes getting people to give up their trucks and cars to use electric trolley buses, tramways and rail can help make a real dent in pollution, traffic congestion and greenhouse gas emissions. But try telling that to Australians living in the outback, long miles from the nearest bus station. Even most Japanese, who have access to some of the world's best high-speed rail links and urban mass transit, own some type of private vehicle.

The global economic crisis is affecting families and communities across the planet. With regions bearing the brunt of the crisis, affecting businesses, jobs and people generally, regional policies are very much part of the solution.

The financial crisis and economic downturn are likely to put upward pressure on government debt. The trouble is, according to OECD in Figures 2008, public debt (general government debt, which includes central and local government) had already risen quite sharply in the OECD as a whole since 1987, from 59% of GDP to 75% in 2007. Two decades ago, Belgium had the highest public debt, but today that position is filled by Japan, whose debt rose from below 60% to 170% of GDP. Italy’s debt has also shot above 100% of GDP in the past 20 years.

Far from being a snubbed “CSR Cinderella”, the OECD Guidelines for Multinational Enterprises are being widely used by companies seeking to be recognised as leaders in responsible business practice and sustainable development. But if governments want them to be used even more widely, then they must take action to promote them further.

The credit crunch could usher in a new paradigm of stewardship for pension fund trustees and the dawn of a more accountable capitalism.

The OECD Convention on Combating Bribery of Foreign Public Officials celebrated its 10th anniversary in November 2007**. A decade on, the aim of the Convention–to fight against active corruption (offering bribes)–is as pertinent as ever.

US Secretary of State Condoleezza Rice shakes hands with OECD Secretary-General Angel Gurría at the launch of a new multilateral initiative called the Partnership for Democratic Governance (PDG).The new initiative is designed to assist those developing countries that need help to improve governance, strengthen capacity and accountability, and deliver the services that are essential supports of effective government.

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On 19 June 2007 South Africa became the first African country to join the OECD’s Anti-Bribery Convention. The still photo shows South Africa's ambassador to France, Nomasonto Maria Sibanda-Thusi, welcomed by OECD secretary-general, Angel Gurría.

As political leaders gathered in Heiligendamm in northern Germany this June and before that at the OECD in Paris in May, the concern on everyone’s minds was the future shape of the global economy.

Financing retirement was the theme in the latest in a new series of online public discussions, “Ask the economists”. Held in April, OECD experts fielded a dozen questions from readers in Canada, France, Germany, Korea, the UK and the US, as well as the World Bank, about issues such as taxation, equity, early retirement, life expectancy, mortality-linked debt, the role of savings in stocks and real estate, and private versus public provision. The following are just a few extracts from the debate.

Imagine a tax return no longer than a postcard. This at least is what proponents of a “flat tax” system predict.

Government contracts generate valuable economic activity, but they are also prone to bribery on a global scale. A new report shows how policymakers might detect bribery in public procurement and suggests ways of defeating it as well.

The 1997 Anti-Bribery Convention was the first global instrument to fight corruption in cross-border business deals. It has since been ratified by all 30 OECD countries and six non-members. National governments and businesses have used the Convention to improve their own legislation and raise standards.

The OECD Anti-Bribery Convention is ten years old in November, yet rarely has it been in the public spotlight quite as much as in recent months, thanks to headline-grabbing investigations of possible bribery of foreign officials by companies from member countries. We asked Mark Pieth, chair of the Working Group on Bribery, to explain.

Tax inspectors may be an eagle-eyed lot, but in today’s global, technology-sophisticated world, their job has become extra challenging. The OECD’s 1996 Recommendation on the Tax Deductibility of Bribes to Foreign Public Officials is designed to discourage international corruption by disallowing bribes that take the form of tax-deductible expenses, for instance.

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?

Globalisation brings costs and benefits, even for the tax professional. The move towards a borderless world has opened up new opportunities for taxpayers to minimise their overall tax liabilities. Much of this tax planning is legitimate. Good tax planning is driven by the reality of businesses having to operate with increasingly complex laws, particularly affecting international activities, while at the same time wanting to legally minimise their costs, including tax costs.

Governments around the world need to be better prepared for large-scale catastrophes and take a more proactive role in working with the insurance industry and other players, OECD Secretary-General Angel Gurría told participants at the inaugural meeting of the OECD International Network on Financial Management of Large-Scale Catastrophes in Paris, 8 September 2006.

Destination Europe is a slightly misleading title since its subject, the political development of Europe from 1945 to 2003, is a journey with a point of origin when Europe, which a generation earlier dominated the world, lay in ruins with no destination.

Can technology bring better government? Anyone who has filled a tax return online would probably answer yes. But is that enough? The answer is, probably not. A new report, E-Government for Better Government, the second phase of an OECD project launched in 2001, suggests that while in principle, e-government instruments can improve efficiency, increase citizen awareness and help promote new initiatives, it is not enough just to open a website. The basic key challenges remain the same in the real world as in the virtual one: how to be more agile, responsive and accountable.

“Good governance is the basis of all OECD activities, which is hardly surprising given that it is essential for all economic and social progress.” These remarks by Secretary-General Donald J. Johnston set the tone for a ministerial meeting on Strengthening Trust in Government, hosted by the Netherlands in Rotterdam on 28 November.

Even a few short decades ago, power and politics seemed to be played out only at election time, when politicians would consult the people, then return to government or opposition to take care of the affairs of the state. The next election was barely on their minds. Citizens, whether through trust or ignorance, generally would ask no more of them than that.

If there were ever any doubt, current events are making it abundantly clear: good, effective government is crucial to a well-functioning economy and society. Natural disasters such as hurricane Katrina in the US, explosions of social and racial tensions in Europe, terrorism and threats of global pandemics have put government in the spotlight. Such events also underscore the high–and rising–expectations that citizens have of their governments.

Governments have always been keen to achieve results, but calls to improve public sector performance in OECD countries have become particularly loud and insistent over the last couple of decades.

OECD countries have carried out many public management reforms over the last 20 years or so. Yet there is still little comparative data to help governments plan such moves and gauge their progress. To be sure, statistical and budgetary agencies in many OECD countries have made attempts at measuring general government productivity, for instance, but these efforts have tended to be made in isolation, and often employing different methods.

Adriaan Buyserd is Dutch and Lampros Kontogeorgos is Greek. Both are graduate students studying international public administration at the Erasmus University Rotterdam, and both will be taking part in the parallel summit for students that is being staged this month in Rotterdam alongside the OECD ministerial meeting on trust in government.

It started in the 1980s with privatisation, when state-run commercial services like telecoms were transferred to private ownership. Now an extension of this idea is to hire private sector businesses to deliver public services. The services remain public, the government remains responsible for regulation and oversight, but businesses either replace public authorities in carrying out the job or share the work with them. What are the reasons for introducing this notion, how does it operate in practice, and can it achieve its goals?

Even sceptics would agree that corruption, quite apart from being anti-democratic, distorts markets and chokes development. That is why the OECD leads the fight against corruption in international business, notably through its renowned Anti-Bribery Convention.

There are lots of jokes about car salesmen. Many play on the idea of fraudulence and untrustworthiness. If governments place excessive faith in the invisible hand of markets and craft social policies and public service programmes that rely on commercial promise, they run the risk of being seen in the same manner: as policy sales people selling products, and certainly not practising good governance.

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.

Chinese-OECD relations have developed strongly ever since the OECD Council decided, in October 1995, to launch a programme of dialogue and co-operation with China.

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.

Images of voters braving death to cast their ballots in elections across the world remind us that democracy, however imperfect, is not some tedious civic duty, but a victory over oppression. In this light, it might seem slightly ludicrous to worry about such bastions of freedom and stability as, say, the Scandinavian countries.

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.

Does government have a future? For a public organisation such as the OECD the question seems purely rhetorical and the answer obvious. Does anyone seriously believe that the world could function without government? Yet, the proposition is far from being fanciful.

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).

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.

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.

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.

Achieving peace from conflict depends on building respect and working together to forge agreement and new institutions. It can be done.

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.

The Internet was still in its infancy in 1994 when the head of Chile’s tax service, Javier Etcheberry, saw an important role for it: a tool to help his department provide an efficient, high-quality service to the community. Perhaps an expected task for any modern democratic government, but it was a brave and inspired move at the time. And it is one that has been thoroughly vindicated; this year more than half the tax information filed by employers and a quarter of the country’s income tax returns were filed online.

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.