Transcript The First OECD- Southeast Asia Regional Forum 2007 Session 1 COMPARATIVE ASPECTS OF PEER REVIEWS – OECD, IMF AND THE EUROPEAN UNION Presentation for Conference.

The First OECD- Southeast Asia Regional Forum 2007
Session 1
COMPARATIVE ASPECTS OF PEER
REVIEWS – OECD, IMF AND THE
EUROPEAN UNION
Presentation for Conference on
Peer Review Processes,
hosted by the Government of Indonesia
Jakarta, 23 – 24 January 2007
Niels Thygesen
Chair of Economic Development and Review Committee,
OECD
A BRIEF HISTORY OF SURVEILLANCE OF
ECONOMIC PERFORMANCE AND POLICIES
AND PEER REVIEWS IN THE OECD
1948-60
Crucial role in trade liberalisation, multilateralisation of payments and structural
reforms in western Europe (as OEEC)
1961
US and Canada join; mandate redefined and
made more global; annual country (macro)
economic reviews launched
until 1973
Europe (and Japan) as growth benchmarks?
1973 – 82
First two energy price hikes lengthen
horizon for macro policies and inspire
analysis of “positive adjustment policies”
to step out from stagflation
1980s
Growing competition in surveillance (IMF,
EU, private financial institutions, national
economic councils etc.)
1990s
Also growing differentiation in surveillance
focus, methodology, and in reliance on peer
reviews in three international frameworks
1994
OECD JOBS STRATEGY is first formulated –
remains main example of indicator– based
analytical approach to comparative policy
analysis
1995
OECD country economic reviews become heavily
focussed on the importance for macroeconomic
performance of good policy frameworks and
of structural reforms
1996
Korea, Mexico and four largest Central
European countries join OECD and surveys
of non-members expand
THREE FRAMEWORKS FOR
BILATERAL SURVEILLANCE
• IMF ARTICLE IV CONSULTATIONS
• EDRC COUNTRY REVIEWS IN
THE OECD
• BROAD ECONOMIC POLICY
GUIDELINES IN THE EUROPEAN
UNION
ALL THREE FRAMEWORKS PROVIDE
ELEMENTS OF PEER REVIEW IN
DIFFERENT WAYS
• IMF has particular clout in programme countries –
but there are fewer of those today – and to some
extent in emerging economies
• OECD has to rely on qualityof ideas and relevance
of comparative policy analysis
• The European Union processes go beyond
surveillance through a comprehensive “rule book”
and involvement of many high level national
decision makers
“PEER REVIEW” IN THE IMF IS EXERCISED
THROUGH BOARD CONCLUDING STATEMENT
(PUBLIC INFORMATION NOTICES, PINs), BUT
STAFF HAS CONSIDERABLE DISCRETION,
NOTABLY THROUGH CONCLUDING
STATEMENT AT THE END OF MISSION
ROLE OF EXECUTIVE BOARD IS
CIRCUMSCRIBED BY THE WEIGHT OF THE
OVERALL AGENDA AND THE NUMBER OF
ART. IV REPORTS (app. 130 A YEAR)
THE EUROPEAN UNION HAS
• Centralised monetary and exchange-rate policy (for the
euro area)
• Introduced joint trade, agricultural and competition policy
with authority shared with the European Commission
• Introduced a rule book (or frameowork for negotiation) for
national budgetary policies (ceilings for public deficits)
• Based cooperation in other policy areas on the “Open
Method of Coordination”
PEER REVIEW IS OMNIPRESENT IN THE EU –
BUT STILL VERY DIFFICULT TO DEFINE
HEAVY RELIANCE ON INPUTS AND EVEN ON
SELF-EVALUATION BY PARTICIPATING
GOVERNMENTS OF STRUCTURAL POLICIES
THE CENTRAL BODY IN THE PEER REVIEW
PROCESS, THE COMMISSION, IS TOO STRONG
TO REGARD ITSELF AS A SECRETARIAT,
YET TOO WEAK POLITICALLY TO BE
REGARDED AS A PEER BY GOVERNMENTS
IN THE RESPECTIVE PEER REVIEW
PROCESSES ONE COULD SAY THAT
• The IMF relies almost exclusively on the evaluations of its
staff, but allowing Board members and the country authorities
to disagree
• The EU process – outside the partly rules-bound fiscal area –
gives primacy to national input and proposals (“ownership”)
• The OECD process is an intermediate one – no subject is
off the table, but governments influence the form in which
recommendations are adressed to them
THOSE FAMILIAR WITH THE IMF PROCESS THINK
OECD MESSAGES MAY OFTEN BE DILUTED AND
ISSUES FUDGED BY THE NEED TO BRING ALSO THE
COUNTRY AUTHORITIES ON BOARD –
WHILE THOSE FAMILIAR WITH THE EU PROCESSES
BELIEVE OECD MESSAGES ARE OFTEN OVERLY
STANDARDISED AND DO NOT PAY SUFFICIENT
ATTENTION TO NATIONAL CIRCUMSTANCES
THERE IS SOME TRUTH IN BOTH OF THESE
VIEWS, BUT THE USEFULNESS/IMPACT OF
OECD RECOMMENDATIONS SHOULD NOT
BE UNDERRATED
OECD PROCESS HAS ADVANTAGES
• More interaction with relevant national policy officials on the
basis of staff draft survey
• Considerable involvement by EDRC in discussing and
modifying report, with
• Useful element of two examining countries/lead speakers
• Subsequent process of revising and approving survey
brings further improvements
• Manageable size and diversity of membership (up to 2007)
REQUIREMENTS FOR MAKING THE OECD
INTERMEDIATE PEER REVIEW PROCESS
EFFECTIVE
• Give the OECD secretariat sufficient resources to
produce country surveys of high objectivity and
at regular – and not too long – intervals
• Provide the EDRC with experienced national
officials (and examiners)
• Maintain focus on structural policy areas for which
an analytical framework for benchmarking can be
developed