The battle for world progress: A strategic role for the OECD

David Rooney

The world is experiencing an unusual period of uncertainty, both economically and politically. The conditions are ripe for the OECD to step up its role. 

The architecture of multilateral co-operation established after the Second World War is being challenged by the end of the Cold War. The world of the 20th century was shaped by two global wars and the boom-depression cycles, which foreshadowed them or were their sequel. Now the “end of history”, pronounced by Francis Fukuyama when Soviet communism collapsed, is being overtaken by the “clash of civilisations” advanced by Samuel P. Huntington as the new motor of world conflict. Turmoil and unforeseen challenges are coming to centre stage.

NATO and the OEEC were the two arms of a Western strategy to provide security and prosperity in the post-war period. In the war against terrorism, which to some is the consequence of a failure of prosperity and progress in major parts of the world, NATO looks like it is being transformed into an instrument to combat a variety of threats to security. The OECD, as the successor to the OEEC, should become the body which keeps the notion of progress alive, not only for its member countries but for the world as a whole. In these times of turmoil, progress and peace go hand in hand. It is the OECD’s strategic role to keep that reality alive, as an expression of the vital interest of the advanced, democratic nations of the world.

The message of hope that social and economic progress implies is essential to the geo-political role of the advanced democratic nations that meet in the OECD, now embracing North America, Europe and the Pacific. The initial impulse of the Marshall Plan to restore prosperity to war-torn Europe, and thereby peace, has matured into the European Union, now a major global player. Surely the authors of this strategic initiative will recognise that the same message of hope has to be carried to the distressed regions of the world, and that the OECD has a strategic role to play.

It is no longer a question of “Marshall Plans” here and there, even if development aid is still indispensable, but rather of an inter-country learning process whereby the concepts, tools and institutions of economic and social progress can be spread, so that more and more countries can play an autonomous role in the world economy. The rapid accession of some central and eastern European countries to the OECD and the European Union testifies to the validity of the hypothesis that progress can be learned. Within the OECD itself, the countries on the Mediterranean rim moved from “technical assistance” status to mature economies in a matter of years. Japan’s rise to the front rank of the world’s economy is another case in point, not to mention the Asian tigers, and China and India on the horizon. In other words, we are in for a period of global competition between socio-economic systems: between “market states” with different socio-political arrangements. This is the essence of globalisation.

Progress can cross cultures and religions, and no regions or people should be excluded from this proposition. Fukuyama may have been right to celebrate the final ideological victory of democracy and the market economy over fascism and communism, but history marches on. Arnold Toynbee was probably nearer to reality in explaining the rise and fall of civilisations by the capacity to harness the available techniques (in the broad sense) for economic progress and to distribute their benefits to the people. There is no simple model to be followed, and the path of progress is never linear because comparative advantage and leadership rise and decline. Indeed, one nation can leapfrog another. But what seems clear is that the battle for progress will be as important as the war on terrorism – indeed the two are interlinked.

As the battle lines are drawn between the pro- and anti-globalisation camps and between the North and the South, exacerbated by the poverty and decline in some parts of the world, the OECD’s capacity to state the problems objectively, based on a strong professional culture, is a major asset. The historically unprecedented pace of economic and social change based on new technologies (the first leg of the Toynbee proposition) is not being accompanied by a fair distribution of welfare (the second leg). The OECD’s secretary-general, Donald Johnston, acknowledges this in the last edition of the OECD Observer (No. 235, December 2002). The OECD does not have the political clout of the United Nations or the operational power of the IMF, the World Bank and the World Trade Organization, but it does have the analytical capability, the professional impartiality and the innovative capacity to play the role of policy pathfinder. Beyond being a “think tank” or a powerhouse of policy discussion leading to agreed best practice, the OECD is an effective tool for the multilateral policy learning so badly needed in a world of complexity and turmoil.

Though to many considered to be an economic organisation, the innovative logic of the policy pathfinder role has led the OECD to extend its policy expertise into many other areas. Science and technology, energy, the environment, education and social policy, and more latterly public management and territorial development, are all areas where the OECD now has analytical expertise and policy machinery. Since the complexities of the contemporary world cannot be understood – let alone resolved – by the policies of one branch of government alone, this multidisciplinary capacity gives OECD an edge over many other international organisations.

Nowhere is this more true than in the complex interactions between the two legs of Toynbee’s equation: the economic/technological leg of wealth creation, and the socio/political leg of distribution, equity and environmental health. In the struggle over globalisation, the “Davos” forces tend to be on the first leg, whereas the “Porto Alegre” forces are clearly on the second. With its strong capacity in economic, social and environmental policy, and in the framework of sustainable development, the OECD should be able to bridge the two and thereby help to turn this contradiction into a constructive debate leading to policy action. And as the OECD knows from experience, including its local-based work, action must contain self-generated change from within the concerned communities for policies to succeed.

But while the OECD clearly has the potential to keep the flag of progress flying in a turbulent world, it also has several major handicaps.

First, it has come to be labelled in some quarters as “the rich man’s club”, and obviously its countries are generally those with the highest national incomes. Yet it is also true that, because of democratic values and professional ethics, virtually all OECD know-how comes into the public domain and is available to those who seek it, whether in publications or on the Internet. Added to this, the OECD has always had a development directorate – the Development Assistance Committee that handles bilateral aid pre-dates the OECD. This, together with the Development Centre, has put the organisation at the helm of dealing with the problems of global poverty and other wider world issues. Moreover, the OECD’s programmes have pragmatically connected it with some 70 countries around the world, and it has good working relations with Brazil, China, Russia and South Africa, as well as with the countries of eastern Europe. Furthermore, the OECD does not just speak with governments or business, but with civil society generally, as witnessed in its now-referential annual OECD Forum, a public gathering held in parallel with the OECD Ministerial Council.

Despite the rich-man’s tag, the OECD does not seem to come in for the ire of the South or the anti-globalisation movement as much as some other international organisations, and this may, in part, be to do with its rather discreet way of doing business. Nor is the organisation seen as a rival to other international organisations, for the simple reason that its role as a policy laboratory means that its products can be used by everyone.

Second, in this time of financial rectitude, the OECD has to solve the problem of remaining at the policy frontier and shedding or decentralising activities to make room for new priorities, without undermining the infrastructure that is the basis of OECD excellence.

The battle for progress in a global setting is a clear and fair challenge to the advanced democratic countries; it clearly defines OECD membership, and might provide a rallying point for augmenting its means. The fact that the members of the OECD are “countries” rather than “states” legitimises growing participation of the civil society in OECD affairs, an important point because the battle for progress cannot be won by governments alone. This is not an “à la carte” OECD, but burden-sharing appropriate to the role of policy pathfinder.

The building blocks for such a strategy are already in place. The challenge of governance is to restructure them into a coherent and explicit policy for the future of the organisation.

*Ron Gass is a former official of NATO and the OECD, and since retirement, has been a consultant to the European Commission and the EBRD. This article was written in a personal capacity.

References

Fukuyama, F. (1992), The End of History and the Last Man, Penguin Books, London.

Huntington, S. P. (1998), The Clash of Civilizations and the Remaking of the World Order, Touchstone Books, London.

Toynbee, A. (1978), Mankind and Mother Earth, Granada, London.

©OECD Observer No 236, March 2003




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