Until a few years ago, one might have asked what does "development" have to do with the OECD, an organisation seen as the "Club of Rich Countries"? In fact, “development” is in the name of the organisation itself - the Organisation for Economic Cooperation and Development. However, the meaning attached to the word has changed over 60 years of history. To understand this journey, I will outline three different phases. First, the birth of the OECD; second, a period of institutionalisation and a "missed" encounter with the countries of the South; and finally, the "comeback" of development at a time of unprecedented transformation of the global economy.
The Marshall Plan was pivotal in shaping multilateralism. It was commonly believed that the rapid reconstruction of Western Europe following the Second World War was possible through a combination of aid and international economic cooperation. Discussions surrounding these two issues - aid and cooperation – took place at the Chateau de la Muette, now the headquarters of the OECD, heir to the Organisation for European Economic Cooperation. The working method was original: more than an administration, it consisted of networks of public officials gathering to discuss different reconstruction initiatives. They formed some twenty committees, which would meet regularly to share experiences and build trust among member countries; all members exchanged as equals and took unanimous decisions. From the beginning, two styles emerged side by side: an interpretive discourse, destined to evolve over time and based on a shared understanding of social and economic public policies and phenomena; and a normative discourse aimed at formulating standards and prescriptions in the field of public policy.
Meanwhile, the Marshall Plan also triggered the emergence of the ideas behind Development Economics, born from a combination of new intuitions about the challenges that less developed countries faced and a desire for rapid progress towards prosperity. The idea at the time was that the OECD could contribute to expanding international trade and, in doing so, facilitate development. Of course, some asked why countries integrated in international trade networks remained poor, or even became impoverished. Those voices, however, did notreceivemuch attention. It was also believed that the OECD could promote the provision of aid to countries unable to generate sufficient domestic revenues to have their economies grow. Thus, the Development Assistance Group (which later became the Development Assistance Committee- DAC) was formed, with a rather normative discourse. Finally, the OECD was seen as a place where the public policies of developed and non-developed countries could be compared. In the climate of the Cold War, there were those who wanted to disseminate Western "Best Practices" to non-developed countries with aims that verged on propaganda, and those who sincerely believed in dialogue with the “Other”. Both called for an inclusive "table", one whose creation John Fitzgerald Kennedy proposed in 1961: the DevelopmentCentre, where OECD members and non-members would participate on an equal-footing, as “Members”. The Centre’s discourse was more on the interpretive side.
Institutionalisation and “stiffening”
What did this new approach to multilateralism entail for developing countries? Did they have chairs at the OECD’s tables? Decolonisation naturally played in favour of their inclusion and participation in global decision-making: by 1961, the year the OECD was founded, the United Nations had grown from 51 founding members to over a hundred, and in 1964, the United Nations Conference on Trade and Development (UNCTAD) was created to integrate developing countries in the world economy. However, the OECD would continue to exclude developing countries for a long period of time, let alone invite them to take part in decision-making. It was not until the mid-90s that first Mexico, followed by South Korea, would join the organisation. So why create a "club" of countries, out of reach of the “periphery”, whilst at the same time seek to manage global agreements like the Multilateral Agreement on Investment? This is perhaps not the place to analyse the political reasoning behind the "closing off" of the OECD, but rather to reflect on the economic vision that came with it. At that point in time, development was often conceived as the evolution of countries along a single path - one traced by the rich countries of the OECD. The “laggards and latecomers" on this journey were perceived to be held back by internal "obstacles" for which they were solely responsible and which they ought to remove as quickly as possible. At the same time, it was believed that they could benefit from trade, financial aid and policy expertise from "advanced" countries, to grow their economies and help their citizens escape from extreme poverty. Once this was achieved, market mechanisms would supposedly kick in to permanently keep their populations "out of danger".
Words like "development" and "cooperation" became synonymous with "economic growth" and "assistance", with the latter monitored by the DAC. Furthermore, “cooperation” also meant “regulationto ensure the safeguarding of the well-functioning ofmarkets”, with an emphasis on removing "restrictions" on businesses (red tape and taxes), privatisation and promoting trade and foreign investment, considered the main engines of growth. In this context, dialogue between donor and recipient countries was not always considered necessary. While individual projects required "on the ground" collaboration between Northern and Southern actors, it was believed that policy design and evaluation - for example, deciding which forms of spending could be classified as official development assistance - was the domain of donors alone (deciding whether expenses conditional on the purchase of goods from the donor country were eligible, or if export credits, military assistance or private charity could be considered as "aid"). The membership of the DAC was kept small. The size of the Development Centre was not much more. However, the latter was set to evolve over time, while changes to the DAC would remain much more limited.
"The Great Transformation"
By the end of the last century, the OECD could no longer ignore the powerful transformations happening in the South. Along with the consequences of decolonisation and the fall of the Iron Curtain, the world was experiencing a global shift in the economic centre of gravity. Over 80 non-OECD countries were experiencing spectacular growth, more than double that of OECD member countries. In around 2010, non-OECD countries’ combined GDP surpassed that of OECD countries in purchasing power parity. At the same time, China became the largest trading partner-country of African, emerging Asian and several Latin American countries. All of this resulted in, among other things, an extraordinary reduction of extreme poverty (from 1.9 billion people in 1990 to 735 million in 2015), the emergence of a "new global middle class", and the relocation of manufacturing,financial assets, and apart of monetary reserves to emerging markets. Both the structure and the "lenses" of the OECD changed. At least in part.
The question of whether the OECD should open up to new members appeared inevitable to the OECD’s agenda. After Mexico and South Korea, several Eastern European countries joined the organisation, which would "accompany" them in carrying out "market reforms". More recently, the OECD invited Israel and a handful of Latin American countries to join once they had made substantial changes to their legislation, policies and agendas. In the same vein, the OECD has worked hard to spread its standards beyond its members through "regional" and "country" programmes consisting of "traditional OECD products" (reviews, accession to conventions, etc.). If we add this to the organisation’s contributions to the G20 and so-called "Key Partners" (the BRICS countries and Indonesia), the intent of the OECDto transform itself into a global body is clear. In practical terms, these efforts have strengthened the organisation's normative discourse, partly to the detriment of its interpretative one. Opening up (or not) to new countries continues to fuel heated discussions and questions surrounding the legitimacy of the organisation’s standards.
The Development Centre was even more eager to open up to new members, being the first part of the organisation to recognise the fundamental shifts that had occurred in the world and to promotethe "voices" of non-OECD countries. The evolution of the Centre has been quite visible: from 25 members in 2005 (fewer than the OECD), the Centre has grown to over 50 members, including South Africa, Argentina, Brazil, China, India and Indonesia. The Centre has sought to maintain a balanced geographical distribution: it includes 14 Latin American, 11 African, 8 Asian and 21 European countries, plus Turkey and Israel. The goal is not universality, given the challenges such breadth of coverage poses to technical dialogue, but rather representativeness. The Sahel and West Africa Club has adopted a similar approach: in 2011, for example, it integrated three West African regional organisations as full members.
Conversely, the DAC has opened up only marginally, remaining a “club of rich donors”. Indeed, eight OECD countries are not among its members (Mexico, Chile, Colombia, Israel, Turkey, Estonia, Latvia and Lithuania). Its added value remains limited to assistance, and it does not seek to work in depth on the domestic issues that developing countries face. That being said, the Committee has no choice but to deal with "emerging donors" and formalised its intention to invite Brazil, China and India in building the “Global Partnership for Effective Development Co-operation”. However, emerging donors soon withdrew from the partnership, asserting their proximity to developing countries rather than identifying themselves with traditional donors. Against this backdrop, Mary Robinson, president of the High-Level Panel on DAC, called on the Committee to modernise itself, concluding that the distinction between "donors" and "beneficiaries" has lost much of its original meaning and should be replaced with a "partnership among equals". Ms. Robinson invited the DAC to work closely with the Development Centre - a recommendation that has been slow in implementation.
Related to the discussions on accession, a debate on the future of development itself has emerged. For the sake of brevity, I will focus on three of the multiple issues this debate has sought to address.
First, the conjecture that there is a single path for development has lost credibility. It should not come as a surprise: there is a wealth of examples of emerging countries that have grown in a spectacular albeit non "orthodox" way, and that have taken into account the asymmetry of their production structures with those of developed countries. Nor is there a shortage of cases where "diligent" countries have not benefited from following "orthodox" recommendations. Not to mention that in many cases, OECD countries themselves adopted different practices in the past from those they preach as prerequisites for development in the present. So why should the OECD promote the adoption of "advanced" country standards as a necessary and sufficient condition for development? Would the organisation not be more useful and relevant as an inclusive space where countries can discuss individual development paths and the forms of international cooperation needed to support them? For this to happen, the OECD would need to revive its interpretative discourse, for example by acknowledging the specificities of developing countries rather than considering them as mere recipients of standards they did not have a say in defining. This debate is ongoing and for now the logic of standard-setting appears to be dominant.
A second debate is about goals. A central premise of the Sustainable Development Goals (SDGs) is that economic growth and development, although connected, are not synonymous. Indeed, inequalities have reached unbearable levels in many countries and extreme poverty has started to rise again, independent of growth rates. A series of development "traps" persist, feeding vicious cycles that cause disappointment and frustration among citizens whose expectations are not being met, ultimately triggering a deep social malaise that is increasingly visible on the streets. For example, the new middle classes have needs that are only partially being met. This generates greater distrust in institutions that, in turn, find it harder to collect taxes, which are generally already meagre. Lower tax revenue further limits the state's ability to finance investments and services, weakening the trust of new middle classes even further, and so the process goes on. Similar traps tend to reproduce, over time, the social vulnerability of informal workers with unstable incomes and no social protection, and low productivity associated with limited specialisation and high dependence on primary commodities.
Public policies and international co-operation are indispensable for escaping these development traps, while market mechanisms can reinforce them. However, while in the past financial transfers from and controlled by development assistance were seen as essential, today there is also a focus on public policy capabilities. North-South or South-South relations can play a pivotal role, in a similar vein to what the OECD did for its members during the early years of its existence. As was the case then, we need public policy dialogue among countries so they can discuss and compare, as equals, national and global strategies and measures, whether in relation to trade, migration or the environment. This renewed multilateralism would not seek to disseminate standards and influence developing countries, but rather it would aim to foster structured policy experimentation through learning by doing and monitoring among "peers".
A third debate, linked to the previous one, concerns measurement. Enrico Giovannini and Martine Durand, successive Chief Statisticians at the OECD, have respectively promoted and created well-being indicators, much more appropriate than GDP, for assessing a country’s living conditions. Although their work has a more general value, it is particularly relevant to development assistance. Indeed, a large part of the criteria for distributing aid is based on calculations relating to GDP, more precisely the GNI. Countries that "graduate" - i.e. whose per capita GNI exceeds a certain level - lose access to a part of or all aid, as well as to a number ofrelated benefits. Today, the existence of development traps or challenges such as the climate and biodiversity crises, which persist even in high-income countries, incite us to reconsider development measures and the associated graduation mechanisms. The objection that alternatives to GDP-GNI would be impracticable is undermined by the increasing geographical coverage of the OECD's well-being indicators.
The history of the OECD’s relationship with development is linked to a series of pivotal changes; the Covid-19 pandemic is likely to represent one such moment. These changes have brought back to the fore the question of Southern countries’ voice, along with a number of other development issues. Two further points warrant mention by way of conclusion.
First, an "update" of international relations with non-OECD countries seems necessary. This is what the OECD is currently discussing under the name of "Development inTransition". Everythinghas changed: there are new actors, including some that carry significant weight; new objectives, as shown by the SDGs; new measurements, because GDP is an inappropriate metonymy for development; and new modalities that should evolve from bilateral to multilateral cooperation to facilitate mutual learning. In this context, the OECD must decide whether and how to participate in establishing a more relevant multilateralism. At one extreme, it could revert to identifying with "rich" countries and assistance policies. At the other extreme, it could open itself up more to emerging countries and treat them as "equals”. Alternatively, it could decide to remain plural: in which case, its internal institutions would need to specialise and re-examine their individual vocations. They would also need to work in closer cooperation with each other and in cluster. As suggested by Mary Robinson, the DAC could, in this scenario, cooperate with the Development Centre and the Sahel and West Africa Club to establish a dialogue "as equals" with non-OECD countries. The Centre could in turn engage with traditional "donors" via the DAC. This all remains to be seen.
Second, OECD countries should learn from the development debate and see themselves as, in a sense, “developing”. We have too often rested on the idea that history has come to its end. In other words, that strategic and long-term visions are a waste of time in a “flat” world. In this world, the OECD has limited itself to marginal improvements ofexisting national sectoral policies. The development debate, on the other hand, recalls that good administration, however necessary, is not sufficient to resolve persistent structural traps, unbearable inequalities among people and regions, exogenous imbalances that limit the margins of national manoeuver and technological lock-ins. Fortunately, a number of commendable initiatives have applied the questions traditionally reserved to developing countries to OECD countries, with significant results in terms of conceptual tools and policy proposals. Some examples are the work of Fabrizio Barca, as president of the Territorial Policies Committee in its first eight years, and the work today on inclusive growth. What follows is to be monitored.