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What Is the OECD?

The OECD was formed in 1961 and included Korea.
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  • Written By: Tricia Ellis-Christensen
  • Edited By: Niki Foster
  • Last Modified Date: 12 July 2014
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The Organization for Economic Development (OECD) was formed in 1961 as an expansion of the Organization for European Economic Co-operation (OEEC). The OEEC developed strategies for restructuring Europe after World War II. The OECD expanded its reach and included not only European countries, but also Canada, Mexico, Australia, New Zealand, Japan, Korea, and the United States.

The OECD's goals are to promote economic stability and democracy in its member countries and in developing countries. One of the main methods that it uses to analyze countries is collecting and publishing statistics on social and economic issues. These statistics are reviewed by governments and during OECD meetings to address how best to foster the organization's goals.

OECD counsels are comprised of representatives from member countries. These representatives draft recommendations or international agreements on various issues. For example, in 2006, the organization made strong recommendations to countries to adopt anti-spam policies, encouraging nations to educate both the public and industries to reduce Internet spam.

At the same meeting in 2006, the OECD debated and discussed the economic future and potential of China, not a member country, and recommended that China allow more foreign investment, which is frequently held up by Chinese laws. The OECD analysis of this issue suggests that more foreign investors would increase the economic growth of China, while fostering good relationships between China and other countries. Member countries of the organization take these recommendations back to their governments, and often these recommendations influence foreign policy.

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The group also has influence over the issue of sustainable development. The OECD looks for solutions that allow for current economic growth without negatively impacting the economic growth and survival of future generations. Through statistical analysis and discussion, it can draft agreements, or at least strongly encourage corporate responsibility or high environmental standards and policies. It can also examine developing countries to see if they progress along sustainable lines. Education and recommendations can be offered to these countries, which if agreed upon, will further the aims of the OECD.

Not all counsel from the OECD is accepted, and some is harshly criticized. Recommendations and agreements are not binding to either member or nonmember countries. The organization often fails to find approval from governments opposing democracy and capitalism. Frequently, however, the OECD continues to recommend and exert pressure on governments it deems irresponsible in their policies. This can be an effective method for ultimately achieving the group’s aims.

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Discuss this Article

bobcat60
Post 2

I do not know about all of the members, but I know there were originally 20 OECD members, and 14 have joined since then. The most recent was Estonia, in December 2010. Another interesting recent addition is Israel, who joined in September 2010.

momtocfd
Post 1

I find this extremely interesting. My husband works in economic development here in the United States and I had no idea that there was an international economic development organization. I would be very interested to see a list of OECD member countries. I would also be interested to see what some of their accepted recommendations have been and how they have turned out. It is amazing to me that they made recommendations to China, and China is not even a member country. It is also interesting that they meet opposition from countries who do not favor capitalism. I wonder if any non-capitalist countries are members.

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