Organization for Economic Cooperation and Development

Organization for Economic Cooperation and Development (OECD), international organization founded in 1961 to coordinate the economic policies of industrialized nations. The OECD succeeded the Organization for European Economic Cooperation, an agency founded in 1948 to direct reconstruction efforts in European nations devastated by World War II (see European Recovery Program). The OECD has 30 member nations, including the United States, Canada, Japan, Germany, France, the United Kingdom, South Korea and Australia.

Unlike other international economic organizations, such as the International Monetary Fund and the World Trade Organization, the OECD does not directly offer development assistance or settle economic disputes between nations. Its functions are primarily advisory. The OECD promotes collaboration between international economic experts and government officials. It provides expertise and supervision on matters concerning the domestic economies of member nations and their interactions within the global economy. It publishes a broad range of statistics and forecasts on subjects of interest to member nations, including agriculture, economic development and aid, education, energy, the environment, trade, health, labor markets, science and technology, and taxation. The OECD hosts annual meetings of finance and economic ministers from its member nations. These meetings also lay the groundwork for the annual meetings of heads of states from the Group of Seven, the world’s most powerful industrial nations.

During global trade negotiations, the OECD provides research and counsel on such issues as the reduction and elimination of trade barriers, the recognition of intellectual property rights, and the calculation of government subsidies to industry and agriculture. The OECD also promotes economic behavior compatible with a more open global economy. Under OECD guidelines, for instance, member countries pledge to treat the multinational companies of other member countries as they would domestic firms.

During the 1990s, the OECD expanded its activities in response to the end of the Cold War in 1991, the increasingly global nature of trade, and the emergence of new issues, such as environmental protection. More than 200 working committees address issues of concern to OECD members. For example, the Center for Cooperation with Economies in Transition provides governments of former Soviet-bloc countries with advice and technological assistance. The OECD’s Environmental Committee examines how to integrate economic and environmental policy.

The OECD also represents the industrialized nations in negotiations and discussions with developing nations about development assistance, the global distribution of resources and wealth, and the structure of the international economy. In reaction to the efforts of the Organization of Petroleum Exporting Countries to control the world price of oil in 1973, OECD member nations also organized the International Energy Agency (IEA). The IEA coordinates national oil stockpiling efforts, promotes energy conservation and the development of renewable energy resources, gathers information on the international energy markets, and intervenes in world markets to stabilize oil and other energy prices.