Business and the OECD: For a fact-based public policy

Business and Industry Advisory Committee (BIAC) to the OECD

Business and the OECD are engaged in policy-shaping at many levels. It is an example to be followed, says Douglas Worth. 

Where I come from, government must listen to me. It’s my constitutional right. In the First Amendment to the US Constitution, it is spelled out that Congress shall pass no law that abridges the right of the people to petition for redress of their grievances.

Thus, there has been created an elaborate system of advisory groups where business is represented. In addition, the business community has organised both broad and sectoral associations for high-impact... well, lobbying. So there, I’ve said the word. But remember, taking my case to government is my right.

In Europe and in the wake of the Marshall Plan, governments made an utterly prescient and bold move when they called upon the business community to organise itself…guess what…to lobby them. Well, perhaps it’s not lobbying in the technical sense, because the OECD does not actually write laws as such. On the other hand, as in so many areas, the OECD has set a norm. It is the norm, as well as cogent and important, to engage the principal participants in the economy when you are discussing economically based policy choices.

During my business career, there was an era when you could count on your fingers and toes the number of governments with which the business community had a real dialogue. There was a time when the Japanese government was a granite wall; now, many ministries aggressively seek out advice. The European Union has sprouted dozens of advisory groups that enjoy increasingly broadened and deepened access. In North America, the sophistication of lobby groups nearly exceeds the capacity of government to digest their input.

Over the past few years, the OECD has stepped up considerably its outreach efforts to be an aggressive purveyor of fact-based public policy. It is the application of the organisation’s disciplines that offers the most value to members and non-members alike. But it is in the developing world where policy mistakes do the most damage, hence the OECD’s focus on private sector capacity building in emerging economies.

The range of issues and the depth of discussions between the business community and the OECD have undergone a burst of innovation and productivity in recent years. Business experts are active participants in much of the work programme. Initiative now comes from both sides.

For instance, the complex array of issues surrounding the advance of biotechnology has proven to be one of the more nettlesome efforts undertaken by the organisation, and business has been actively working both at the technical and conceptual level to ensure that this vast new potential is not impeded by pop science and protectionism. The taxation of stock options granted, held and exercised across borders has been the subject of a joint working group of business people and tax authorities.

The OECD Committee on Information, Computer and Communications Policy has opened its programme of work on e-commerce to the full involvement of business expertise. The chemicals industry has co-operated with OECD governments to devise a common method of assessing new chemicals. The business community is participating in peer reviews for the implementation of the OECD Convention on Bribery, regulatory reform assessment and reviews of the implementation of the OECD Guidelines on Transfer Pricing. This work is real and a mutually valuable engagement with the private sector.

Purveying this norm of garnering business interests to what is still the vast majority of countries in the world is the single most important factor for shaping the policy mosaic that will enable sustained economic growth. The engagement is a two-way street. Business can indeed petition for redress of its grievances, but it can also develop a better understanding of the challenges faced by government.

In 1994, I was invited to make a presentation to the Communist Party School in Beijing. What was the subject? That’s right, the value of engaging the private sector in the policy debates that presage policy change. There was quite a bit of interest among the provincial governors and vice-governors who were the up and comers in the Party. I believe that they have it figured out and understand what they must do to transform their economy.

I would suggest that the rest of the world watch carefully and follow the lead established by the OECD. Building a partnership with the private sector is the correct way to go, for only such a combination can meet the challenge of economic stewardship in the future.

*Douglas C. Worth, an IBM veteran of 36 years, stepped down as BIAC's secretary-general in June 2003 after four years in the post.

References

Worth, D. (2002), “Bye-bye, Miss American Pie”, in OECD Observer, No 233, August 2002. Available online at www.oecdobserver.org

©OECD Observer No 235, December 2002




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