Browse by: "2020"

This working paper offers a synthesis of the current knowledge on the determinants of productivity. It carefully reviews both “spatial” (e.g. agglomerations, infrastructure, geography) and “aspatial” (e.g. human capital, labour regulations, industry-level innovation and dynamism) productivity drivers and demonstrates how the underlying spatial dynamics behind the latter group makes all productivity determinants “spatial” in nature. The paper demonstrates that productivity is inherently a spatial phenomenon and its understanding without a local/regional dimension is incomplete.

How prevalent are services sold together with goods? Using aggregate and micro-data, this report assesses this prevalence so as to gain a better understanding of how firms combine goods and services in their exports. Leaving aside the specific case of distribution services, 'Other business services', 'Construction' and 'Research and development' are the most common services supplied by manufacturing firms. With respect to industries, 'paper and printing', as well as 'repair and installation' come first in terms of prevalence of bundles of goods and services. Since the trade regime is different for trade in goods and trade in services, manufacturing firms engaged in servitisation strategies may face higher trade barriers just by expanding their activities in sectors that are less open to trade. When negotiating trade agreements, policy makers need to take into account complementarities between goods and services, and look at the joint restrictiveness for goods and services.

The mining sector accounts for a substantial share of exports and GDP in some countries, but rarely creates many direct jobs. This paper examines the mining sector using a value chain perspective, looking at both direct and indirect inputs and outputs. It finds that inputs from other sectors, in particular services, represent an opportunity for some minerals-rich countries. This paper aims to shed light on what those opportunities might be, and on some of the policies that influence whether or not such sectors emerge and develop.

Divestment by multinational enterprises is an important yet understudied phenomenon. The few available estimates indicate that about a fifth of all foreign affiliates are divested every five years. This paper presents the findings from a novel cross-country firm-level dataset with financial and ownership information for over 62 000 foreign-owned affiliates from a selection of 41 OECD and G20 countries and their economic groups from 164 home countries for the period 2007-2014. The data allow an assessment of the relative importance of different determinants of divestment in a cross-country setting, including host country policies and bilateral factors, including trade, investment and tax agreements. The findings confirm that parents divested about one of every five foreign-owned affiliates between 2007-2014 and show that a number of host country policy and economic factors, including labour costs and international trade agreements, influence the divestment decision, on top of the firm considerations considered in previous studies.

The Great Recession and the subsequent period of subdued GDP growth in most advanced economies have highlighted the need for macroeconomic forecasters to account for sudden and deep recessions, periods of higher macroeconomic volatility, and fluctuations in trend GDP growth. In this paper, we put forward an extension of the standard Markov-Switching Dynamic Factor Model (MS-DFM) by incorporating two new features: switches in volatility and time-variation in trend GDP growth. First, we show that volatility switches largely improve the detection of business cycle turning points in the low-volatility environment prevailing since the mid-1980s. It is an important result for the detection of future recessions since, according to our model, the US economy is now back to a low-volatility environment after an interruption during the Great Recession. Second, our model also captures a continuous decline in the US trend GDP growth that started a few years before the Great Recession and continued thereafter. These two extensions of the standard MS-DFM framework are supported by information criteria, marginal likelihood comparisons and improved real-time GDP forecasting performance.

The present paper develops Adaptive Trees, a new machine learning approach specifically designed for economic forecasting. Economic forecasting is made difficult by economic complexity, which implies non-linearities (multiple interactions and discontinuities) and unknown structural changes (the continuous change in the distribution of economic variables). The forecast methodology aims at addressing these challenges. The algorithm is said to be “adaptive” insofar as it adapts to the quantity of structural change it detects in the economy by giving more weight to more recent observations. The performance of the algorithm in forecasting GDP growth 3- to 12-months ahead is assessed through simulations in pseudo-real-time for six major economies (USA, UK, Germany, France, Japan, Italy). The performance of Adaptive Trees is on average broadly similar to forecasts obtained from the OECD’s Indicator Model and generally performs better than a simple AR(1) benchmark model as well as Random Forests and Gradient Boosted Trees.

Telemedicine is being used across OECD countries to deliver health care in a wide range of specialties, for numerous conditions and through varied means. A growing body of evidence suggests that care delivered via telemedicine can be both safe and effective, in some cases with better outcomes than conventional face-to-face care. Telemedicine services can also be cost-effective in different settings and contexts. However, despite these benefits, these services still represent a small fraction of all health care activity and spending. Important barriers to wider use remain, with providers and patients facing regulatory uncertainty, patchy financing and reimbursement, and vague governance. Due to inequalities in health and digital literacy, patients that most stand to benefit are also often those that are least able to access and make use of telemedicine. Telemedicine has the potential to improve effectiveness, efficiency and equity in health care, but can also introduce new risks and amplify existing inequalities.

China, Japan and Korea have deployed a multiplicity of co-operation efforts at different levels of government to promote air quality and curb transboundary pollution. This paper identifies the existing arrangements for air quality co-operation in North East Asia and provides guidance to advance the co-operation required to face cross-border air pollution building on the experience of two long-standing co-operative agreements in this area: the Canada-United States Air Quality Agreement and UNECE’s Convention on Long-Range Transboundary Air Pollution. This paper finds that the multilateral arrangements existent in North East Asia are yet to produce a comprehensive science-based regional approach to address transboundary air pollution. Key suggestions for countries to capitalise on the stronger momentum for co-operation in this area include: i) building on the existing frameworks for international regulatory co-operation for air quality; ii) advancing a common understanding of transboundary air pollution across scientific regional arrangements; and iii) strengthening the domestic policy frameworks for air quality in each country as a key prerequisite.

On average in OECD countries, private sources account for a significant share of investment in tertiary educational institutions. Private expenditure on tertiary educational institutions increased faster than public expenditure between 2010 and 2016 on average across OECD countries, although this varies from country to country. Participation in tertiary education is not correlated to the funding model in tertiary institutions and high levels of private expenditure at tertiary education are not necessarily associated with lower enrolment. Financial support mechanisms in the form of grants or loans help alleviate the financial burden to households, particularly in countries where private spending on tertiary education is high.

The OECD Survey on Blended Finance Funds and Facilities represents a major step forward to consolidate evidence to inform policy makers and market players in the blended finance field, as they strive to both mobilise and shift financing towards the Sustainable Development Goals (SDGs). This working paper presents findings from the 2018 edition of the OECD survey relating to the development strategy, performance tracking and evaluation approach of the surveyed blended finance funds and facilities. It provides new evidence on the extent to which blended finance vehicles anchor their investment strategy, as well as their environmental, social and governance (ESG) safeguards, to international agreements on sustainable development. It investigates how blended finance vehicles structure their monitoring and evaluation function, track development performance and assess development results.

This paper is the result of a joint pilot exercise of the “Toolkit for identifying, monitoring and evaluating the value added of triangular co-operation” among the EU-LAC Facility for Triangular Co-operation (ADELANTE) and the OECD. The eight projects of the ADELANTE Facility worked with the questionnaire of the evaluation tool to assess the value added of working in a trilateral partnership. The EU team and the projects agreed that the six areas identified as potential value added of triangular co-operation are valid for ADELANTE. The joint pilot exercise was insightful and inspiring for all of the partners involved as an instrument for mutual learning. The recommendations arising from this joint exercise will contribute to the design of future EU triangular co-operation initiatives, aiming to make good use of the value added of the modality and addressing the challenges in a constructive, forward-looking way.

School leaders in Romania primarily consider their function to be purely administrative, rather than having responsibilities for shaping the quality of teaching and learning. This education policy brief highlights how other countries and economies have developed effective school leaders by clearly defining professional standards and introducing stronger initial selection and preparation processes. The brief also provides examples of how practical learning experiences in specific areas related to school leaders’ daily work can have a positive impact on the professional development of Romanian school leaders.

Despite improvements in recent years, many students in Romania still progress through school without mastering basic competencies and a large share of them leave school before completing upper secondary education. This education policy brief focuses on policies that can support Romania in ensuring that all students participate in and complete education – particularly those from disadvantaged groups. In particular, this brief focuses on improving functional literacy, reducing early school leaving and helping early school leavers return to education.

Romania is one of the few countries in the OECD and EU lacking national teaching standards. This education policy brief shares examples of how clearly defined teacher competency standards can help shape initial teacher education and professional development programmes to focus on pedagogical practices, which are historically weak in Romania, as in much of Eastern Europe. The brief also identifies the advantages and opportunities of restructuring Romania’s current teacher management system to help teachers grow professionally throughout their careers.

Early childhood education and care (ECEC) attendance in Romania has increased in recent decades but remains below national goals and EU averages. This education policy brief aims to support Romania’s efforts to improve the access and quality of ECEC services. To do this, Romania will need to increase ECEC expenditure, address participation barriers and offer more flexible service provision. Efforts to improve the quality of ECEC services might include, among other things, ensuring continuity in learning and development across the full age range of ECEC curricula.

Technological developments are likely to bring many new opportunities, which may be even larger in emerging economies and may allow them to “leapfrog” certain stages of development. Notwithstanding these opportunities, emerging economies face significant challenges associated with rapid technological progress. Many of these challenges are the same as in advanced economies, but differences in starting conditions may result in a greater threat for the emerging world. This study explores the benefits and risks brought by this new technological wave from the perspective of thirteen key emerging economies: Argentina, Brazil, Colombia, Costa Rica, Chile, China, India, Indonesia, Mexico, Russia, Saudi Arabia, South Africa and Turkey. In particular, it examines: the risk of automation; whether labour markets are polarising; and the potential benefits (but also challenges) of the platform economy.