Founded in 1948, the Organisation for European Economic Cooperation (OEEC), the predecessor to the OECD, played a central role in the reconstruction of Europe after World War II. To avoid the same mistakes made after World War I, European leader agreed that economic cooperation was quintessential to establishing long-lasting peace in Europe. Canada and the United States joined the OEEC in 1960. The Organisation for Economic Co-operation and Development (OECD) was born in 1961, when the Convention entered into force. Since then, many more countries have joined the organization. Today, 35 OECD member countries worldwide use the OECD to coordinate their economic policies. The OECD also serves as economic think tank, collecting and analyzing economic trends and thus assisting its members in solving national and global economic challenges.
Goals and Overall Structure of the OECD
In the founding treaty of the OECD, the signatory states agreed to promote policies aimed at the following three goals:
- To achieve the highest sustainable economic growth and employment as well as a rising standard of living in order to contribute to the development of the world economy;
- To contribute to healthy economic growth in both member states and non-member states alike; and
- To contribute to the expansion of world trade on a multilateral, non-discriminatory basis in accordance with international obligations.
In more than 100 specialised committees and working groups, representatives of the OECD member states discuss economic, environmental, and social policy issues. The organisation’s highest decision-making body is the Council, in which the member states are represented by their ambassadors. All decisions made by the Council must be unanimous because they will be binding under international law.
Real-life Expertise: Business at OECD
In order to live up to its stated goal of adopting policies that improve the quality of life, the OECD works together with industry and trade union representatives of its member states through two committees:
- Business and Industry Advisory Committee to the OECD (BIAC)
- Trade Union Advisory Committee (TUAC)
BIAC is the umbrella organisation of the leading business federations of all OECD countries. It was founded in 1962 – just one year after the establishment of the OECD. Today, a total of 43 member federations are represented in BIAC – including, in the case of Germany, the Federation of German Industries (BDI) and the Confederation of German Employers’ Associations (BDA). In addition, twelve industrial federations from non-OECD states have observer status, which enables them to take part in the BIAC process. Thanks to their vast experience gained from their day-to-day entrepreneurial activities, BIAC members offer the OECD valuable expertise how to creating competitive economies, an improved business environment, and better living conditions.
BDI promotes the interests of German industry in the 30 or so BIAC committees. In this way, almost 100 representatives of German business bring their knowledge and experience to bear in the OECD process. The various committees deal with issues ranging from trade and investment policy to taxation, health, climate change, and policy on small and medium-sized enterprises. Through BIAC, German industry plays an active role in shaping the OECD decision-making process. Currently, the main focus is digitisation and inclusive growth, alongside trade and foreign direct investment. Industry’s input is indispensable to ensure practice-oriented policies and their implementation.