28th June 2012
New Approaches to Economic Challenges
The most common question I get in this job is “So what exactly does the OECD do?”.
By the end of this blog I will have suggested that part of the answer is “it takes new approaches to economic challenges”.
But let me start my answer by recalling the OECD’s founding mission, in 1961, “to promote policies designed to achieve the highest sustainable economic growth and employment, and a rising standard of living”. The modern-day strap-line is “Better Policies for Better Lives”.
Never has it been so important for the OECD to succeed, as we try to emerge from the worst economic crisis since the organisation was founded.
At the recently concluded annual OECD Ministerial, Secretary-General Angel Gurria’s advice to the 60+ Ministers was, “Go Structural, Go Social and Go Green”: not growth for growth’s sake, but a job-rich growth with more equitable and environmentally sustainable results. Ministers also endorsed reports on Skills, Gender, Development, Wellbeing and Inequality, and encouraged the OECD to keep pushing its global economic standards to keep markets fair and open.
This brings me to the title of this blog – “New Approaches to Economic Challenges”. This is the name of a new project launched at the Ministerial. The OECD and outside experts will study the lessons of the economic and financial crisis, and refresh and re-set the way the OECD thinks about policy frameworks in order to be better able to meet future challenges.
This project feels to me like a vital evolution in the OECD’s thinking. As the scoping paper puts it “in a world characterised by complexity…with interactions, feedback, nonlinearities and tipping points…policy makers need to rethink the kind of society we want, and re-examine the economic models and other tools we use to create it”.
For me, a key element of this project will be to work out how to take an increasingly integrated approach to the challenges we face. For example, too often economic, social and environmental policies are delivered in isolation from each other, rather than being mutually reinforcing. The trade-offs and spillovers aren’t well understood. We have neither managed financial risk in recent years, nor been sufficiently long-term in our thinking. We have made extraordinary progress in recent decades, but the strains in the economic and financial system are now all too evident. To continue to make progress we need to be humble about the limits of current frameworks. New thinking is needed.
The OECD has a huge natural advantage as it embarks on this thinking, in that many of the world’s best experts and datasets sit together under the same roof, and they have good relationships with other institutions who are thinking similar thoughts.
I like what the playwright Tom Stoppard said in ‘Arcadia’ (thanks Eric Beinhocker):
A door like this has cracked open five or six times
Since we got up on our hind legs. It’s the best possible
Time to be alive, when almost everything you
Thought you knew is wrong.
Or if you prefer the wisdom of children’s books, in the immortal words of AA Milne:
“Here is Edward Bear, coming downstairs now, bump, bump, bump, on the back of his head, behind Christopher Robin. It is, as far as he knows, the only way of coming downstairs, but sometimes he feels that there really is another way, if only he could stop bumping for a moment and think of it.”
What do you think our New Approaches to Economic Challenges should be?
The Business Secretary Vince Cable’s comment on the Today Programme, “There’s a difference between increasing your credit card in order to keep a gas-guzzling car on the road, and taking out a loan in order to get a more fuel-efficient car”, is quite a nice analogy for the OECD New Approaches to Economic Challenges project – investment in new approaches that produce better outcomes.
Quick update on the New Approaches to Economic Challenges (NAEC) project:
The first NAEC meeting at the end of last year brought in external speakers like Lord Nick Stern to help frame the challenge:
http://www.oecd.org/about/secretary-general/firstmeetingofthenewapproachestoeconomicchallengesnaecgroup.htm
And we had a second meeting NAEC meeting earlier this month in Paris which set out a number of the projects to be pursued. There’ll be a progress report at this May’s annual OECD meeting. More substantive news soon.
Meanwhile, here’s what my friend Joe says on blog about meeting new challenges:
Excerpt from “Morning Prayer” from The Inner Sky by Rilke
“You see, what’s easy wants nothing from you, but what’s hard waits for you, and there is no strength in you that won’t be needed there, and even if your life is very long not a single day will be left over for what’s easy, what scoffs as your strength.
Go deep inside yourself and build what’s hard. It should be like a house within you, if you yourself are like a land that changes with the tides. Remember, you are not a star, you have no course to follow.
You must be a world unto yourself and with your difficult thing in your center, drawing you to it. And one day, with its weight, its gravity, it will have its effects beyond you, on a destiny, on a person, on God. Then, when it’s ready, God will enter into your difficult thing. And do you know anywhere else where you and He can meet?”
(http://joebrittain.com)
Put that in your pipe and smoke it.
Nick, coming to this slightly late. Its interesting to see what role the OECD plays alongside the Gx groupings. Its strength is in its secretariat and its ability to develop clear, rigorous analytics that can illustrate arguments and illuminate options. The Gx does not need and should not develop its own secretariat. But does the OECD really have or need a global role? Or should it serve the needs of its members?
But I do think the OECD as an institution has to become more relevant and focussed more tightly on its customers/owners and their specific needs. The combination of academic/civil servant can be exceptionally powerful when the positive aspects of both are harnessed. but it can also become become inward and defensive if the negatives come to the fore. Change shouldn’t be an option, it should be a constant.
Nick, coming to this slightly late. Its interesting to see what role the OECD plays alongside the Gx groupings. Its strength is in its secretariat and its ability to develop clear, rigorous analytics that can illustrate arguments and illuminate options. The Gx does not need and should not develop its own secretariat. But does the OECD really have or need a global role? Or should it serve the needs of its members?
Dear Nicholas,pls.let me 1st. answering your question.For I do think that a lot of the above mentioned topics are sounding very good.Esp. the chapter, that starts with “to continue to make progress, we need to…”.I also agree to you that new thinking is urgently needed.But , to be honest, I ‘m doubting a little bit that the OECD is able to transfer nice words, written on paper, into the harder reality.For, 1st. of all, they urgently needed a much better information exchange.You also said so -only a lttle bit hidden.E.g.”…policies are delivered in isolation from each other…”.That ‘s why I think that you 1st. should start by changing the basics -by putting more transparency,co-operation and-maybe most notable-much more teamwork, WITHIN the OECD.So, pls.don ‘t get me wrong.I do full agree to your new project “New Approaches…”but I also do strongly guess that it could be very hard for you to realize it.So best wishes et bon chance!BW, Ingo-Steven Wais, Stuttgart
Dear Nicholas, it ‘s not so easy by answering your question.
But -after reading your report twice I do full agree to you that there is a new thinking urgently needed.So if I would be in your situation I first would go back to the roots or basics:1st.: A much better information exchange WITHIN the OECD, (“…policies are often delivered in isolation from each other..”)2nd.: More co-operation and teamwork (…”suffering in long term thinking….”) and a “New Transparency” for your excellent ideas within the context of “New Approaches…”. I do really think that it can’t be very hard to do so.But I also think that it could be very diffcult to you, to transfer these things from a project status into a hard reality. So “Bon Chance” et BW,Ingo-Steven Wais, Stuttgart