From ‘Club of the Rich’ to ‘Globalisation à la carte’? Evaluating Reform at the OECD

Abstract

Recognising the declining weight of its members in the world economy, the OECD, formerly known as a ‘club of rich, industrialised nations’, is undergoing unprecedented organisational reform, including a more inclusive membership logic, engagement with new global players, and outreach to developing countries, all with a view to guaranteeing its continued relevance as a central actor in the task of global policy provision. Using the concepts of global public goods, clubs and models of multilateralism, this article critically evaluates the successes and limits of the OECD’s reform, arguing that it is adopting a restrictive approach to expansion – globalisation ‘à la carte’. Meaningful reform towards greater inclusion is apparent in the way research on nonmembers has been mainstreamed, and in its increased work both with emerging powers and with developing countries. Limits to reform are found in institutional rigidities including its overrepresentation of Europe and underrepresentation of Asia and other continents, reflected through staff profiles and membership. These biases may in turn reduce its attractiveness as a global forum to new players, particularly China. Policy Implications Shifts in the world economy towards the east and the south pose significant challenges to international organisations, which must ensure that processes of global governance fully involve key actors, in the quest for functional and legitimate global policy. While many international organisations have near universal membership, the OECD was established as a club. However, it now recognises that it needs to engage key nonmembers in order to help govern the world economy. The OECD is casting off its ‘club’ inheritance, particularly in terms of the services it provides, which are increasingly oriented to serving a broader community beyond members. But future reform will be constrained until organisational change under way at the OECD manages to overcome its ‘club’ inheritance, and convinces emerging powers – particularly the BRICS – of the benefits of working with them.

Rising Powers and Multilateral Institutions

“…When the OECD inherited OEEC staff, over 70% were French nationals, followed by the British, comprising nearly 13%. 3 In that year, the French made up the bulk of secretarial, manual and linguistic posts, but they also occupied 38% of professional posts (see Table 2 in Clifton and Díaz-Fuentes, 2011). Over time, the proportion of French nationals was reduced, while staff from the US increased, particularly in the professional category, and UK staff fluctuated remaining relatively constant, though the proportion of professionals fell while that of support staff increased.…”

“…We have discussed the relevance of these concepts to the OECD elsewhere (Clifton and Díaz-Fuentes, 2011). For the OECD to successfully transform itself from "club" to more "global" governance, it must overcome a distinct challenge not faced by peer organizations with more universal membership such as the IMF, the World Bank or even the GATT/WTO: for decades, most countries in the world were not welcome to join the "club," while its Western members assumed they were "developed" or economically "superior" to their Eastern and Southern non-member counterparts.…”

“…Worse followed: the arrival of Ronald Reagan in the US and Margaret Thatcher in the UK coincided with a period of recruitment stagnation across all categories. New blood, and greater professionalization, would only begin again from the 2000s (see Table 1 in Clifton and Díaz-Fuentes, 2011). Secondly, OECD staff categories are broken down by nationality to show how certain countries have dominated positions.…”

The new politics of global tax governance: taking stock a decade after the financial crisis

“…It has been extraordinarily effective at bringing developing countries inside the tent, creating two new bodies in which developing countries outnumber OECD states. 3 This newfound inclusiveness has bought the OECD legitimacy, but potentially at the expense of its ability to achieve effective and timely reform (Clifton & D ıaz-Fuentes, 2011). As a consequence, both member and non-member states have pre-empted the BEPS project's most difficult discussions by adopting unilateral anti-avoidance measures targeting the digital economy.…”

The OECD and the Reconfiguration of the State in Emerging Economies: Manufacturing ‘Regulatory Capacity’

“…Committees may also make ‘recommendations’, of which there had been some 203 as of 2016, which are non‐binding but provide what is described as an extensive body of ‘soft law’ and ‘best practice’, carrying significant influence as an international standard or benchmark. OECD committees, for example, have established a vast ‘array of governance concepts, including “Codes”, “Best Practices”, “Guidelines”, ‘Standards”, “Norms”, “Principles” and “Criteria”’, which, once established, are used by OECD committees to evaluate policy practice (Clifton and Diaz‐Fuentes, : 306).…”