Organization for Economic Cooperation and Development - OECD

What is the 'Organization for Economic Cooperation and Development - OECD'

The Organization for Economic Cooperation and Development (OECD) is a group of 34 member countries that discuss and develop economic and social policy. OECD members are democratic countries that support free market economies.

BREAKING DOWN 'Organization for Economic Cooperation and Development - OECD'

The OECD is variously referred to as a think tank or monitoring group. Its stated goals include fostering economic development and cooperation; fighting poverty; and ensuring the environmental impact of growth and social development is always considered. Over the years, it has dealt with a range of issues, including raising the standard of living in member countries, contributing to the expansion of world trade and promoting economic stability.

The OECD was established on Dec. 14, 1960, by 18 European nations plus the United States and Canada. It has expanded over time to include members from South America and the Asia-Pacific region. It includes most of the highly developed economies.

Background

In 1948, in the aftermath of World War II, the Organization for European Economic Cooperation (OEEC) was established to administer the predominantly U.S.-funded Marshall Plan for post-war reconstruction on the continent. The group emphasized the importance of working together for economic development, with the goal of avoiding more decades of European warfare. The OEEC was instrumental in helping the European Economic Community (EEC), which has since evolved into the European Union (EU), to establish a European Free Trade Area.

In 1961, the United States and Canada joined the OEEC, which changed its name to OECD to reflect the broader membership. Fourteen other countries have joined since then as of 2016. It is headquartered in the Chateau de la Muette in Paris, France.

Functions

The OECD publishes economic reports, statistical databases, analyses and forecasts on the outlook for economic growth worldwide. Reports are variously global, regional or national in orientation. The group analyzes and reports on the impact of social policy issues such as gender discrimination on economic growth, and makes policy recommendations designed to foster growth with sensitivity to environmental issues. The organization also seeks to eliminate bribery and other financial crime worldwide.

The OECD maintains a so-called "black list" of nations that are considered uncooperative tax havens. It led a two-year effort with the Group of 20 (G20) nations to encourage tax reform worldwide and eliminate tax avoidance by profitable corporations. The recommendations presented at the end of the project included an estimate that such avoidance costs the world's economies between $100 billion and $240 billion in tax revenue annually. The group provides consulting assistance and support to nations in central and eastern Europe that implement market-based economic reforms.

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