The OECD (Organisation for Economic Co-operation and Development) was established in 1961, as the successor of the OEEC (Organisation for European Economic Co-operation), which was originally founded in 1948 to administer the Marshall Plan and to promote post-war economic consolidation in Europe. After the completion of European reconstruction in 1961, the organisation was restructured and expanded to include the United States and Canada. Currently (as of October 2024), the OECD has 38 member countries (including Hungary). The last country to join the organisation was Costa Rica in spring 2021, and negotiations for accession started in 2022 with Argentina, Brazil, Peru, Croatia, Romania and Bulgaria. The headquarters of the OECD are located in Paris, and its statute is the OECD Convention.
Activities of the OECD
Bringing together advanced market economies, the OECD is one of the most important economic policy forums for its member countries. Its established analytical and research base bring their specific domain knowledge to bear, continuously analysing global economic trends and setting policy directions in order to help shape and renew the national economic policies of member countries, and to develop new types of responses where necessary. It is a coordinating body, arrives at decisions by consensus, and has no power to initiate any sanctions. The main goals of the OECD include promoting green and sustainable economic growth, achieving high levels of employment, promoting liberal trade and the free movement of capital, combating international tax evasion, increasing the standard of living, and preserving financial stability, thereby strengthening international economic relations.
Organizational structure of the OECD
The supreme governing body of the OECD is the Council, operating at the ambassadorial level. It is chaired by its Secretary General and consists of permanent representatives of member countries. The Council’s decisions are prepared by the Executive Committee. The Council generally convenes once a year at the ministerial level as well (Ministerial Council Meeting), allowing the member countries to set the political direction of the organisation and to approve its key strategic objectives. The OECD performs its work through more than 300 expert committees and working groups, covering almost all areas of the member countries’ government policy. Thus, in addition to economic policy and financial markets, the OECD also plays an active role in matters of taxation, trade policy, environmental policy, climate change, labour market policy, health policy, agriculture and fisheries, rural development, innovation and scientific research, energy policy, education policy, transportation, official aid policy and many other issues, with cooperation from the business and academic representatives of member countries. Through its special committees, the OECD provides a network where the government agencies of member countries can draw on the intellectual work and know-how of the OECD Secretariat, share policy issues and experiences, and jointly develop policy responses to new global or regional challenges.
The OECD regularly monitors and analyses the economic policies of its member countries and makes recommendations, with cooperation from other member countries. It also prepares regular policy evaluations pertaining to the policies pursued by the member countries, in particular regarding environmental policies, energy policies, education policies and research and development policies. After peer review, these studies, analyses and recommendations are made public and, ideally, incorporated into the national policies of the country in question.
The OECD and Hungary
Hungary first established an official relationship with the OECD in 1991, after the change of regime, at the same time as Poland and Czechoslovakia, within the framework of the “Partners in Transition (PIT)” programme. During the programme, great emphasis was given to using the experience of the OECD and its member countries in the creation of the legal and institutional framework for a modern domestic market economy, including issues such as the issue of the convertibility of the Hungarian forint, the establishment of money markets, and fiscal reform. During the process of formulating new legislation ensuring market economy conditions (the Act on Foreign Exchange, the Act on Credit Institutions and Financial Enterprises, the Insurance Act, The Act on Bankruptcy Proceedings, the Act on Accounting), the OECD provided professional and technical assistance in order to enable Hungary to use the knowledge and experience accumulated in member countries as much as possible. Hungary officially joined the OECD on 7 May 1996.
The MNB and the OECD
The MNB, from the beginning, has been regularly participating in the work of those (approx. 12–14) OECD committees which are professionally important for the Bank’s activities. These primarily include the Economic Policy Committee, which assesses the most important processes in the world economy and discusses key global trends, its Working Party on Short-Term Economic Prospects, which prepares short-term forecasts, the Economic and Development Review Committee, which assesses national economic policies and developments in each member country, and the Committee on Financial Markets, which examines developments on national and international financial markets. Moreover, the MNB regularly participates in the meetings of the OECD National Council, which coordinates Hungary’s participation in the OECD. As part of this process, the MNB significantly contributes to the preparatory work of the OECD Economic Outlook, issued twice a year, and also participates in the preparation of the Economic Survey, a Hungarian national survey usually published every two years, in which the OECD’s relevant commission prepares an economy-wide assessment report on Hungary. The Magyar Nemzeti Bank also works closely together with OECD in the dissemination and strengthening of financial literacy in Hungary.
OECD website: https://www.oecd.org/