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Maintaining and building new infrastructure that delivers agglomerative benefits is crucial for promoting sustainable economic growth. Capital needs for infrastructure investment are massive. This capital could be sourced especially from pension funds and other institutional investors for whom infrastructure funds are attractive investment vehicles. But in order to mobilise such private capital, the public sector needs to provide the right framework, e.g. by promoting a “Regulated Asset Base” model to improve capital expenditure, by avoiding undue solvency rules and other regulatory obstacles to long-term investment, and by closing the knowledge gap with regard to infrastructure investments. Governments should also avoid crowding out private sector investment, confining interventions to projects where public risk sharing is necessary, and refrain from making frequent short-term changes to the regulatory framework.
Corruption undermines productivity growth. Fundamentally, these negative effects of corruption on productivity operate through the corruptly biased decisions in both the public and the private sector over the use of resources. More specifically, this paper argues that corruption affects three key determinants of productivity growth: innovation and diffusion of new technologies, an enabling market environment, and resource allocation. The available evidence suggests that investing into the mitigation of corruption risks through reforms of the public integrity system contributes to offset these negative effects of corruption and ensures a country’s path towards sustainable and inclusive development. In particular, governments can strengthen their public integrity systems by reducing the scope for corrupt practices initiated by public officials, e.g. the extortion of bribes to obtain licences or permits, by mitigating corruption in public procurement, by ensuring meritocratic hiring processes in order to avoid favouritism and nepotism, by averting policy capture by narrow interest groups through adequate levels of transparency and stakeholder engagement, managing conflicts of interest situations, and instilling transparency in lobbying activities and political finance, as well as by providing guidance to public officials, e.g. through clear codes of conduct and guidance.
Favourable demographics has boosted Indonesia’s economic growth in recent decades, but its contribution will wane over time. Skills and competences will therefore become increasingly important to raise living standards. Educational attainment has improved considerably, but the quality of education remains disappointing. At the same time, technological changes, new organisational business models and evolving worker preferences make upskilling and reskilling increasingly important. This warrants continuous investment in improving education and lifelong training, in terms of both quality and quantity, with an enhanced role for social partners. Tackling existing and rising skill shortages requires more participation from women, older adults, internal migrants, disadvantaged groups, and foreign workers. Expanding access to early childhood education would provide all children with better opportunities and bring significant benefits. Reducing informality is key to encouraging investment in skills. The COVID-19 crisis has highlighted workers’ insufficient protection against shocks, underlining the need for unemployment insurance. It is also an opportunity to boost digitalisation and innovate with smart practices. School closures are already penalising learning outcomes and will reduce future earnings.
COVID-19 is the most significant public health emergency in more than a century, causing a global economic crisis, and with long-term repercussions across society. COVID-19 continues to claim lives, many are suffering ill health (physical and/or mental) due to the virus, and health systems struggle to recover from the massive disruption. This unprecedented crisis has highlighted the urgent need for smart investments to strengthen health system resilience – to protect people’s underlying health, through enhanced preventive care and the ability to reinforce defences in acute times, to fortify the foundations of health systems by ensuring adequate core equipment and exploiting the potential of health information, and to bolster health professionals working on the frontline by building and maintaining sufficient numbers of doctors and nurses – thereby providing countries with the agility to respond not only to evolving pandemics but also to other health and societal shocks. This report identifies a set of priority investment areas needed to strengthen health system resilience. It then produces order-of-magnitude estimates of the expected costs of such investments, drawing extensively from existing OECD data and analytical studies.
COVID-19 is the most significant public health emergency in more than a century, caused a global economic crisis, and has long-term repercussions across society. This unprecedented crisis has highlighted the urgent need for smart investments to strengthen health system resilience. There is a need to protect people’s underlying health; fortify the foundations of health systems; and bolster health professionals working on the frontline. This report identifies a set of priority investment areas needed to strengthen health system resilience. It then produces order-of-magnitude estimates of the expected costs of such investments, drawing extensively from existing OECD data and analytical studies. These priority investments represent an estimated 1.4% of GDP, on average across OECD countries (and ranging from 0.6-2.5%), as compared with pre-pandemic expenditure of 8.8%. A combination of targeted spending and measures to reduce wasteful spending could mitigate the overall increases in health spending in the medium to long term.
This paper synthesises the main policy implications of OECD work focusing on the interplay between participation and positioning in global value chains (GVCs), employment demand and supply and workforce’s skills endowment. They relate to: the way innovation, technology and participation in GVCs shape employment in routine intensive and non-routine jobs; the relationship between participation in GVCs and polarisation of employment; the way the skill composition of a country’s workforce – both the type of skills and their distribution – shapes specialisation and positioning along GVCs; and the complementarities emerging between GVC participation and investment in knowledge-based capital, especially organisational capital and ICT.
Poor adherence to medications affects approximately half of the patient population, leading to severe health complications, premature deaths, and an increased use of healthcare services. The three most prevalent chronic conditions – diabetes, hypertension, and hyperlipidaemia – stand out regarding the magnitude of avoidable health complications, mortality, and healthcare costs. There are three broad reasons behind these low rates of adherence to chronic disease medications. Firstly,the problem of poor adherence has rarely been explicitly included in national health policy agendas. Secondly, interventions tend to attribute the problem exclusively to patients, while the evidence suggests that health system characteristics – in particular the quality of patient-provider interaction, procedures for refilling prescriptions, or out-of-pocket costs – are lead drivers. Thirdly, patients with chronic conditions frequently feel left out of the decision about their therapy and are inclined to rebuff. This paper identifies enablers that are needed for improving adherence to medication at the system level.
In preparation for the 2002 meeting of the OECD Working Party of Senior Budget Officials, an ad hoc Meeting on Investing in Private Financial Assets to Address Longer Term Needs was held in Paris on 4-5 April 2002.
Eight countries participated in the meeting with case studies of their national experiences: Australia, Canada, Chile, the Netherlands, New Zealand, Norway, the United Kingdom and the United States. France attended the meeting as well. The meeting was chaired by Mr. Paul Posner, Managing Director, General Accounting Office, United States...
Lifelong learning is especially important for immigrants, who are often at a disadvantage in terms of the languages and skills that are valued in the labour market of their host country. Yet foreign-born adults are less likely to participate in training than native-born ones, and face higher financial and non-financial barriers to training. Policy efforts should focus not only on providing more training opportunities, but also on removing barriers to participation.
This policy note explores the different ways in which the digital economy affects investment promotion. As foreign direct investment (FDI) can be a key driver of digital growth and transformation, investment promotion agencies (IPAs) are increasingly seeking to attract firms operating in digital sectors or activities. In turn, IPAs also need to undergo their own digitalisation to become more efficient and improve their performance. Investment promotion practices need to respond to the challenges posed by new technologies and adapt new business models – particularly in the COVID-19 context.
Reports on trends in international direct investment tend to focus on recent developments. While such information is clearly of most relevance for policymakers and others interested in the pace and scale of globalisation, it fails to provide any perspective on the nature of globalisation itself. By their nature, recent developments give more weight to the cyclical element in global investment flows. A country’s performance in terms of annual inflows is often taken as a measure of the appropriateness of its policies and, by extension, of its relative attractiveness as a location for investment. Such important issues can only be assessed over a long time period and relying on more sources of information than simply flows of foreign direct investment (FDI). This study focuses on such long-term trends and includes, where appropriate, other estimates of multinational activity.
By focusing on long-term patterns, this paper demonstrates how FDI has evolved from an activity largely ...
This paper examines shareholder claims for reflective loss under investment treaties in light of comparative analysis of advanced systems of corporate law. The paper considers the impact of allowing shareholder claims for reflective loss on key characteristics of the business corporation. The paper also explores possible responses by different categories of investors to the availability of shareholder claims for reflective loss under investment treaties.
In contrast, shareholder claims for reflective loss have consistently been permitted under typical bilateral investment treaties (BITs) in recent years. This paper analyses investment treaty provisions relating to shareholder claims. It addresses (i) treaty regimes for shareholder recovery and company recovery of damages, including their consequences for investor protection and government liability; (ii) the interaction of reflective loss claims with treaty provisions that seek to limit multiple claims; and (iii) treaty provisions applicable to government objections to shareholder claims for reflective loss.
The paper: analyses the drivers of change in investment treaty law; provides an inventory of countries’ options – and limits – to alter their positioning vis-à-vis investment treaty law through ‘exit’ and ‘voice’; and analyses treaty provisions on, and States’ use of, flexibility in investment treaty law.
The paper finds that most treaties provide for little or no mechanism for countries to influence the use and interpretation of investment treaty law. The paper further finds that treaty provisions for ‘exit’ are likewise geared to provide stability rather than flexibility. Analysis of State practice presented in the paper shows that States rarely make use of the mechanisms available to them to influence treaty use and interpretation and that ‘exit’ from the system has likewise been rare so far.