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.

RELATED TERMS
  1. United Nations - UN

    An international organization formed in 1945 to increase political ...
  2. The World Bank

    An international organization dedicated to providing financing, ...
  3. Inter-American Development Bank ...

    A cooperative development bank founded in 1959 to accelerate ...
  4. Social Enterprise

    An organization that is directly involved in the sale of goods ...
  5. Asian Development Bank

    Founded in 1966, its headquarters are in Manila, Philippines. ...
  6. Currency Union

    When two or more groups (usually countries) share a common currency ...
Related Articles
  1. Insights

    U.S. Fiscal Spending Will Bolster Growth, OECD Says

    The OECD said U.S. fiscal stimulus will bolster global growth and address inequality.
  2. Taxes

    5 Countries With Low Taxes

    These countries manage to keep their overall tax levels in check, and some of them have done well because of it.
  3. Investing

    OECD Forecasts Low Growth Trap for the Global Economy

    The Paris-based organization says we will be stuck with low growth for the next two years and advocates the use of fiscal policy to spur growth.
  4. Retirement

    Should Having A Private Pension Be Made Mandatory?

    Aging baby boomers will cause a strain on Social Security, but what can the U.S. do to ensure that the whole system doesn't fail?
  5. Taxes

    What Countries Get For Their High Taxes

    Are there advantages to having the highest taxes in the world? Let's take a look at what the citizens in these countries get for their money.
  6. Insights

    U.S. Vs. China: Battle To Be The Largest Economy In The World

    America's lengthy title reign as "World's Largest Economy" is fast under threat by China's surging economic growth. Find out what the global rankings are forecasted to be for these economic powerhouses. ...
  7. Insights

    The Marshall Plan and the Revitalization of Post War Europe

    The Marshall Plan helped revive the economies of Western Europe after WWII largely by reforms that created greater economic cooperation in the region.
  8. Taxes

    Do U.S. High Corporate Tax Rates Hurt Americans?

    The United States has the highest corporate tax rate of the 34 developed, free-market nations that make up the Organization for Economic Cooperation and Development (OECD).
  9. Insights

    Facebook Helps World Bank Gather Data for Entrepreneurship Report (FB)

    The social media network collaborated with the World Bank and OECD to produce a report detailing the state of entrepreneurship across the world.
  10. Investing

    What is the International Monetary Fund?

    The International Monetary Fund fosters global monetary cooperation and sustainable economic growth.
RELATED FAQS
  1. How are transfer prices set?

    Read a brief overview about the complex world of transfer pricing, including the "arm's length" guidelines established by ... Read Answer >>
  2. What country spends the most on education?

    Learn about the amounts that various developed nations spend on educating their young people compared to education spending ... Read Answer >>
  3. What's the most accurate way to find out a nation's nominal GDP?

    Learn about easy-to-use and most reliable sources for finding a country's nominal GDP data and which sources contain the ... Read Answer >>
  4. What country spends the most on research and development?

    Discover which country spends the most on research and development, in both dollar terms and as a percentage of gross domestic ... Read Answer >>
  5. What are the best measurements of economic growth

    Learn how economists and statisticians track economic growth and why GDP might not be the best measurement of real economic ... Read Answer >>
  6. Where can I find the balance sheet of a country?

    Learn where to find balance sheets for different countries. Explore how different accounting standards may affect the quality ... Read Answer >>
Trading Center