Peer review

A tool for global co-operation and change

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Peer review lies at the heart of international co-operation in the OECD. Why is it so important and what does it achieve?

Best practice is a fashionable term in policymaking these days. Governments and agencies will say they do all they can to ensure their policies are not only in the best interests of their electorates, but that they follow the best tried and tested experience available. But how can we be sure that governments really make such best choices?

One tried and tested instrument is the peer review. It is the assessment of the policies and performances of a country by other countries. The goal is to help participants to improve their policies and comply with established standards and principles. It is often through this process that best practices are identified.

Peer reviews show that international organisations can indeed be creative, for it would not be an exaggeration to claim that the OECD “invented” the modern peer review process. Since it began in the 1960s, it has been adopted by other organisations such as the EU, IMF and WTO. Now it is in the process of being adapted to the needs of the New Partnership for Africa’s Development (NEPAD).

Every OECD member country accepts the method of peer review in most policy areas. It is the basis for OECD economic surveys as well as reviews of environmental, energy and foreign aid policies, not to mention performance on regulatory reform. These studies end up as reports, though they are not just aimed at public information, but at policy action. A country seeking to reduce unemployment, for example, can learn valuable lessons from its peers on what has worked and what has not. It subjects its own policies to the scrutiny of peers and experts at the OECD secretariat in Paris. A report’s conclusions can also help governments win support at home for difficult measures. Importantly, because everyone puts themselves through the same exercise, no country under review can feel it is being singled out in any way. Today’s critics become tomorrow’s subjects.

Effective peer reviews are updated regularly so as to consider progress, shortfalls or indeed changing circumstances such as an economic downturn. This regularity of discussion among partners creates a certain dynamic pressure on peers to act on the advice they receive. Usually, there is no rigid position or obligatory course of action, but rather an agreed best strategy. The aim is open dialogue among countries in a non-adversarial setting. Peer pressure is the driving force which makes the review effective. Its influence strengthens when the outcome of the review is made available to the public, as is usually the case at the OECD. Media involvement and public scrutiny are key elements in the process.

Peer review aims at complying with international guidelines, standards and principles. One reason behind the success of the OECD’s 1994 Jobs Strategy was commitment among members to adhere to principles and benchmarks for creating and maintaining stable employment and to collectively review the measures which have been implemented. Those that performed best tended to be those that adopted most of the strategy. The method produced positive results largely because the “rules of the game” were clear from the start and all the countries involved accepted them. This prevents any risk of the exercise degenerating into diplomatic jockeying for position.

Peer review can help in overseeing the implementation of international treaties and other legally binding instruments. An example of this is the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, which provides for signatories to “co-operate in carrying out a programme of systematic follow-up to monitor and promote the full implementation of this Convention”.

The guidelines, standards and principles against which the performance of the reviewed country is conducted vary widely. These may include, for instance, quantitative reduction in carbon dioxide emissions for environmental performance reviews, or development spending when it comes to development assistance reviews. They may test performance against previously agreed objectives, such as the OECD Environmental Strategy for the First Decade of the 21st Century, or historical benchmarks and legislation, such as the much-quoted UN-set target for bilateral development assistance of 0.7% of GDP.

Peer review is the combination of the activity of several players: the group within which the review is undertaken; the reviewed country; the examiner countries; and the secretariat of the OECD. It is undertaken in the framework of the activities of a review body, such as a committee or working party. The reviewed country co-operates by making documents and data available, responding to questions and requests for self-assessment, facilitating contacts and hosting on-site visits. The role of the examiner countries is to represent the collective body in the early stages of the process and to guide the debate itself. Peer review is a mutual learning process and examiner countries learn from it too. The secretariat acts as keeper of the historical memory of peer review. The independence, transparency, accuracy and analytic quality of the Organisation’s work are essential to the effectiveness and credibility of peer review.

Each peer review may have its own procedure, but they follow a common pattern of preparation, consultation and assessment. At the final phase, a collective discussion on a draft report is held in the review body. In some cases there may be disagreements over assessment or recommendations. These reports may be hotly negotiated since they have to be accepted by the whole review body. In some cases, exceptions to the rule of consensus are possible and the report can be adopted without the agreement of the reviewed country. However, generally, the final report is the fruit of consensus. This can occasionally mean a rather prudently neutral report that none of the actors object to, leading to criticism of blandness, even political expediency. But mostly, governments are ready to accept considerable criticism, even if they disagree with it, as a price for participating in the peer review system. In a sense, peer pressure prevents individual governments from seeking favourable treatment.

And although the OECD is an intergovernmental organisation, examiners are duty-bound to be objective and fair, and to resist any influence of national interest that would undermine the credibility of the peer review mechanism. The organisation upholds this principle, and on balance, successfully so, which is probably why OECD reports enjoy political and public credibility.

Another reason for this success is that, compared with some arguably harder edged private-sector country studies, there is a distinct prospect that OECD conclusions, however negotiated, will be acted upon. From an international perspective, this “soft law” quality of peer review can prove more effective in encouraging compliance with recommendations than any traditional enforcement mechanism like a court or other judicial body. But a peer review can function properly only if there is a commitment to act by the participating countries – and that means not only supplying enough money to carry it out, but also being fully engaged at every stage in the process.

Far from being excessively procedural and impotent, as some critics have argued, peer review can create a catalyst for policy enhancement and far-reaching change.

©OECD Observer No 235, December 2002

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