OECD Member States Research Articles

Navigating Socio-Economic Forces: Understanding FDI Patterns in OECD Economies

This study investigates the FDI patterns’ ecosystem within the OECD regions. The goal is to understand the multifaceted interaction of socio-economic mechanisms driving such patterns. Using a quantitative survey that incorporates patterns of the past and dynamics of the present, the research paper discusses the role that FDI flows in OECD countries have played throughout history. The way study employs OECD data, national data, as well as relevant international institutions such as the UNCTAD and the World Bank is the methodological framework. The analysis of both qualitative and quantitative data underpins the study through the methodology which pays particular attention to the correlation analysis, linear regression, and multiple regression within its framework. The research paper was based on a sample of 38 economically diverse OECD member states and looks into what factors promote foreign direct investment inflows and outflows, and what these could be, for instance, the economic size, level of industrialization, and how the trade is shared across regions. Besides, the study also points out some areas that would be worthy of adding to the list of questions to explore, for example, digital transformation, its impact on the trends of FDI, and the significance of FDI in regional economic integration. These results point to the fact that study should pay more attention to emerging socio-economic conditions and research have to adapt them when designing the policies and future strategies within the framework of international economic relations.

Towards a Typology of Data-Enabled Co-Creation Platforms in Smart Cities and Mapping of Practices in OECD Countries

ABSTRACT In this article, we contribute to the conceptual research on the typologies of data-enabled co-creation platforms in the context of smart cities. We analyze the use of open data portals and city dashboards in the capital cities of all OECD member states. We focus on the data, visualization, and user interaction layers of these platforms. We show that while these platforms can be designed on different levels of complexity—from information provision to substantive co-creation—the majority of cities tend to use more simplistic information provision platforms. Finally, we argue that for the development of substantive data-enabled co-creation platforms, the cities need to pay special attention to user capabilities to take advantage of the co-creative potential of these platforms.

Asymmetric Double Tax Treaties: Relief Method and Tax Sparing for Foreign Direct Investment in Developing Countries

This paper focuses on asymmetric tax treaties and investigates from an empirical perspective the impact of OECD member states’ double tax relief method and of treaty tax-sparing provisions on investments in developing countries, while considering network effects. Our results suggest that having a treaty between the OECD member state and the developing country, which improves the investor's conditions in terms of tax burden, by changing the unilateral tax relief method, increases FDI to the developing country. The positive effect prevails when investigated within investments made through the direct route from residence to source. Results suggest that OECD member states offer tax-sparing provisions mostly to less-developed economies, which already receive very low FDI. Finally, we extend the investigation to an analysis of the impact of residence countries’ tax relief methods on source countries’ domestic tax policy. Our results suggest that developing countries set higher CIT rates when the OECD member state relieves double taxation through the exemption method, as compared to when it offers a foreign tax credit.

Should I Pay, Or Should I Quash? The Role of Governments’ Ideology in Ransom Payment

ABSTRACT Does governments’ ideology influence the likelihood of ransom payment? Despite a steady interest in hostage-taking events, this question remains unanswered. In this article, I argue that ideology contributes to explaining governments’ decisions to pay or not pay ransoms: guided by individualising moral foundations, left-leaning governments are more likely to concede to terrorists to save lives. I test the theoretical argument through a quantitative analysis of abductions between 1970 and 2020 whose victims are citizens of OECD member states. Two results stand out. The presence of leftist governments increases the likelihood of ransom payment, but the abduction of statesmen mitigates its impact. This work contributes to hostage-taking and Foreign Policy Analysis literature by covering an apparent gap in these fields. It also fosters studies on the role of ideology in security issues and moral dilemmas by focusing on a peculiar event that scholars have largely overlooked.

Economic and Legal Basis of Implementation of Compliance in Business Processes of Enterprises

Background: In today's economic world, an effective compliance doctrine is a mandatory component of the management portfolio of any reputable business structure. Currently, compliance strategy is being implemented in all countries of the globalised world, but in different ways: in some countries, actively and comprehensively, and in others, passively and fragmentedly. This study, using analytical and statistical methodological approaches, explains why compliance is implemented differently in businesses around the world. The authors evaluate the effectiveness of the leading types of compliance (anti-corruption, criminal law, environmental, financial, and labour) in the economies of OECD countries and other countries. The authors also substantiate that to strengthen the political will of governments, especially those of developing countries, to extend compliance into the national business environment, it is necessary to develop a national strategic document on the phased implementation of the compliance system in business processes of enterprises, as well as to develop an international document of general application (in the form of a UN Convention) to promote more active implementation of all types of compliance by governments around the world. Methods: The methodological apparatus of legal and economic sciences was used to study the compliance doctrine. The methodological apparatus of the study included mathematical calculation methods and graphical methods for assessing the degree of compliance implementation in countries of the world, probabilistic methods for providing recommendations for management actions and testing for clustering countries of the world. The study also uses special legal methods: formal legal methods for classifying the main features of the compliance phenomenon, comparative legal methods for comparing compliance regulation in different countries, and logical legal methods for improving legal regulation of compliance as a means of the economic well-being of enterprises. Results and Conclusions: The article reveals the content of business process compliance; assesses the effectiveness of this instrument in the economies of OECD member states, the EU and other countries in priority areas; develops proposals for regulation, including legislative regulation and implementation of compliance at the international, national and enterprise levels in the context of digitalisation and sustainable development.

The Brazil-Poland Double Tax Convention in the Context of the Countries’ Contemporary Tax Treaty Policy and Practice

This paper deals with the Brazil-Poland double tax convention for the elimination of double taxation with respect to taxes on income and the prevention of tax evasion and avoidance, signed on 20th September, 2022, in the context of contemporary Brazil’s and Poland’s tax treaty policy and practice. The Author analyses its main features in comparison to Brazil’s and Poland’s positions to the MLI and changes introduced to the OECD and UN Models in 2017. Tax treaty provisions relevant to both countries’ tax treaty policies and practices are also examined. The study concentrates around the research question whether the BR-PL DTC fits into the countries’ contemporary tax treaty policy and practice or whether it is a unique bilateral tax treaty with specific features creating a sui generis pattern for tax treaties: for Brazil – with other OECD Member States and for Poland – with other South American states.

Impact of quantitative safety targets on road fatality reduction: an empirical support toward governance plan.

The role of quantitative target setting has become an important topic in debates on the improvement of road safety performance. Specifically, there are questions regarding the relationship between quantitative safety targets and their actual effects. Although previous studies have provided important insights into this subject, their empirical findings have largely been equivocal, and research on this topic remains inadequate. Based on panel data representing 20 years of observations from 34 OECD member states, we employed nonlinear and linear panel models to investigate whether and how the attributes of quantitative road safety targets (i.e., target ambition and duration) influence their success (i.e., target completion status and rate). The results indicate that a quantitative target with a higher level of ambition is associated with a lower likelihood and rate of completion, whereas there is no support for a connection between target duration and final completion rate. This suggests that an excessively ambitious target does not necessarily result in better road safety performance and is detrimental to achieving expected fatality reductions. From an empirical perspective, this study revealed a potential interaction effect between quantitative road safety targets and practical fatality reduction performance, providing government officials and policymakers with essential references for future practices on target setting and governance planning in regard to public health.

Performance indicators in long-term care for older people in 38 countries: a scoping review

Abstract Background A large number of performance indicators in long-term care have been developed and tested. However, the use of such indicators for regular monitoring of long-term care at regional and national level presents a number of challenges related to coordination of stakeholders, regulation and data collection capabilities. Our aim was to review the performance indicators in long-term care that are currently in use for regular monitoring by 38 OECD member states. Methods We used a scoping review approach that included a systematic search of scientific publications, review of multi-country reports and an internet search of relevant websites of the countries included. The scoping review protocol was registered before starting paper selection and web searches. Results We retrieved 12.776 papers, of which 10 were kept after selection for data extraction. Preliminary results of the review of reports and internet resources led to the retrieval of 399 performance indicators in long-term care from 24 OECD member states, while no indicators could be found for 14 member states. Performance indicators most often relate to falls, pressure ulcers, unplanned weight loss and use of restraints, which are collected by 7 or more of the 24 countries. The definitions of the indicators differ considerably between countries, as well as the definitions of long-term care and hence the settings in which these indicators are used. Conclusions Consideration of indicators often used in several countries may be of interest to decision-makers establishing or updating indicator sets in this area. There is considerable heterogeneity in the nature, definitions and settings of long-term care performance indicators used by OECD member states. These differences are a significant challenge to establish international comparability of the indicators reported. Key messages • The indicators most frequently used for regular monitoring of long-term care performance are related to falls, pressure ulcer, unplanned weight loss and use of restraints. • There is considerable heterogeneity in the nature, definitions and settings of long-term care performance indicators used in different countries, which make comparisons of results challenging.

Local autonomy around the world: the updated and extended Local Autonomy Index (LAI 2.0)

ABSTRACT This paper presents an extension and update of the Local Autonomy Index (LAI) under the name LAI 2.0. It applies the comprehensive methodology of the LAI 1.0 to 57 countries over 30 years (1990–2020), including almost all EU, CoE and OECD member states. Looking at the overall results, over thirty years, the LAI has increased around 7–8%, albeit less important in the most recent period of 2015–2020. The biggest increase is to be found in the Central and Eastern European countries. Conversely, some countries (e.g. Hungary and Belarus) have seen a decrease in local autonomy. The highest ranking countries include the Nordic countries and Switzerland, whereas South-Eastern European countries generally score the lowest. We view the LAI as a springboard to academics and policymakers for a more comprehensive and empirically based understanding of local autonomy over time.

Will they rise again? Four scenarios for the future of trade unions

With rising consumer prices, tight labour markets, a resurgence in labour militancy, and a new post-Covid appreciation of the role of government and market regulation, the conditions for renewed union growth seem favourable. But unions have to come from far. Across the OECD, unions have lost members and power, young people increasingly stay away from unions and labour markets have thoroughly changed from what they were. How likely, then, is a new era for trade unions? This article explores four scenarios for the future of trade unions – marginalization, dualism, substitution and revitalization – each grounded in a few assumptions about the environment and behaviour of unions. Drawing on data and research from 12 OECD member states, the article explores middle range theories for each scenario and weighs arguments pro and contra its likelihood. It concludes with a set of critical propositions about the future of trade unions and research about the future.

TAX HEAVENS: THEORETICAL GUIDELINES

The main purpose of this paper is to study the concept and aspects of tax havens and the attempt of companies with significant revenues to avoid taxation, their causes, trends and effects in the European Union (EU) resulting from tax avoidance or tax evasion behavior. These phenomena were triggered by several factors. The purpose of this study is to identify the major determinants of tax havens in the current economic context. In recent years, the international and European tax policy debate has focused on tax avoidance strategies. Attempts and cases of tax evasion have become more frequent. The development of tax havens has been favored by some macroeconomic factors, but also by the tax non-compliance behavior of companies and individuals looking for different ways to avoid taxation. We examine the theoretical implications of tax haven operations on the actual tax burdens of companies based in Europe. One of the factors that has a major contribution to the development of the orientation trend of multinational and national companies with significant revenues made on the territory of the EU is the degree of taxation. Although this level of taxation differs from one country to another, it is a significant one and is the main pillar on which tax havens are based. This expansion of the phenomenon of avoiding taxation by transferring income to tax havens generates negative effects in the European economy, which leave their imprint on the economy more and more. Since the phenomenon of tax avoidance by directing companies to tax havens cannot be eradicated, it is very important to find measures to limit it. In this context, at the level of the European Union, concerns have arisen for the development of a conceptual, institutional and legislative framework to mitigate these phenomena as much as possible. This phenomenon occurs both within the European Union and globally. The European Union together with the Member States must work more and collaborate internationally to limit the orientation of companies towards tax avoidance by transferring profits to tax havens. In the general context of the globalization of the world economy, the governments of countries that want to increase their tax revenues hit a significant obstacle called “tax havens”. The main finding of this approach is that the EU together with other OECD member states are making diplomatic and legislative efforts to limit as much as possible the tendency to avoid taxation.

Effectiveness and efficiency of state aid for new broadband networks: evidence from OECD member states

ABSTRACT The deployment of new broadband networks (NBNs) based on fiber-optic transmission technologies promises high gains in terms of productivity and economic growth. It has attracted subsidies worth billions from governments worldwide through various state aid programs. Yet, such a program's effectiveness and efficiency still need to be studied. We employ panel data from 32 OECD countries from 2002 to 2019 to provide robust empirical evidence that state aid significantly increases NBNs by facilitating the deployment of new connections to 22 percentage points of households in the short term and 39.3 percentage points in the long term. We find it highly cost-efficient, as the programs break even after three years on average. We also discuss possible efficiency improvements in future funding programs, particularly requirements of technology neutrality, consideration of mobile broadband solutions, and integration of demand-side funding.

Green finance, renewable energy and carbon neutrality in OECD countries

Many countries have committed to reducing carbon emissions based on an international roadmap entitled “carbon neutrality.” This study empirically investigates the effects of green finance and renewable energy sources on 38 OECD member states’ carbon neutrality target covering period from 2013 to 2021. According to the estimated findings, increasing the issued green bonds in OECD would bring about more achievements in the carbon neutrality target. In particular, A rise in green energy consumption of 1% is expected to result in an improvement of nearly 0.048% towards the carbon neutrality goal. Moreover, uncertainty has a negative impacts on the carbon neutrality of OECD with the most significant magnitude of coefficient among other explanatory variables. The primary policy implications are developing the green financial market, digital green financing tools, and sustainable power generation through three phases of locating, investing, and utilizing carbon market policy.

Bioeconomy national strategies in the G20 and OECD countries: Sharing experiences and comparing existing policies

This manuscript addresses the existing governance tools and monitoring systems for implementing a sustainable and regenerative Bioeconomy in the OECD member states and G20. It takes inspiration from the outcomes of an international workshop entitled “Bioeconomy in the G20 and OECD countries: sharing and comparing the existing national strategies and policies for co-designing more effective bioeconomy governance mechanisms and monitoring systems” co-organized by the Italian Presidency of G20 environment 2021, the National Bioeconomy Coordination Board of the National Committee of Biosafety, Biotechnology and Life Sciences of the Italian Presidency of Council of Ministers and the OECD Working Party on Bio-, Nano- and Converging Technologies. The workshop aimed to share virtuous experiences, identify challenges and co-design more robust governance tools and more comprehensive monitoring systems. The manuscript outlines the current situation regarding governance and monitoring, so as to identify relevant issues and areas for further research and policy action.

Tourism Employment and Economic Growth: Dynamic Panel Threshold Analysis

The manuscript reports on findings on the interconnection between tourism employment and economic growth for the selected OECD member states. The dynamic panel threshold regression method was used to analyze the data, where the threshold variable was tourism employment, and the growth of gross national income and value added by activity services were dependent variables in the corresponding models. The dataset covered the period between 2008 and 2020. Both marginal effects indicated positive implications of tourism employment on economic growth. A percent rise in tourism employment leads to an increase in gross national income by 0.15% (in the low regime) and 0.61% (in the high regime). Yet, the results revealed a negative marginal effect of tourism employment on value added by activity services. The outcomes explain that a percent rise in tourism employment in the average country will lead to a decrease in the value added by activity services, as a percentage of value added, by 0.07% (low regime) and 0.09% (high regime). Therefore, the applications of this study are twofold—the first one is its contribution to existing theoretical knowledge through the filling of the literature gaps, and the second one is related to advances in the standing policies. The main limitations and the proposal for future research are the application of random effects and smooth transition threshold models as an alternative to the indicator functions.

The Geneva effect: where officials sit influences where they stand on WTO priorities*

Do representatives of member states in Geneva and officials based in capitals agree on priorities for cooperation in the World Trade Organization? Exploiting an original survey of trade policy officials, we find that respondents representing their countries in Geneva often accord substantially different priorities to institutional reform and policy issues than officials based in capitals. We hypothesize that this ‘Geneva effect’ reflects bureaucratic capacity in capitals and autonomy of Geneva-based officials, and that the effect should be smaller for officials from OECD member states, given extensive interaction outside the WTO to define good regulatory policies and address trade issues of common concern. Empirical analysis supports these hypotheses but also reveals differences in prioritization between Geneva and capital-based officials from OECD countries for specific issues. The results suggest that the prospects of international cooperation may be influenced not only by well-understood differences between states that reflect material interests and domestic political economy drivers, but by differences in relative priorities accorded to issues by officials representing states in international organizations and officials based in capitals.

Unapređenje konkurentnosti i ekonomskog rasta u Republici Srbiji putem koncepta cirkularne ekonomije

The circular economy is a closed circular system in which material and energy losses are converted into resources that may be used for alternative objectives. Inextricably connected with sustainable development, it is primarily concerned with reducing material and energy losses. The optimal course of action would be to eradicate these losses and repurpose materials. Therefore, biodegradable items are used and commodities are disposed, reused and recycled. The primary aim of this study is to examine the impact of energy generation and non-energy materials on the gross domestic product (GDP) of Serbia and other OECD member states. The objective is to ascertain which energy or material production sector is more significant in GDP to enhance competitiveness. The findings reveal the present state of economic growth and the areas that need improvement to foster more business competitiveness. The Adaptive Neural Fuzzy Inference System (ANFIS) as it is well-suited for statistical analysis of highly nonlinear data. The most significant determinant of GDP in Serbia is the proportion of domestic material consumption devoted to the consumption of non-metallic minerals. Among OECD members, however, metal consumption as a proportion of domestic total material consumption is the most significant predictor of GDP. Additionally, the findings indicate that the ideal combination for forecasting GDP using two parameters is the sum of non-energy material output and total municipal trash generation. The findings may exemplify optimal strategies for incorporating the circular economy principle into operations to enhance corporate competitiveness, mitigate energy and material waste, and minimize adverse environmental effects.

DESIGNING THE STRUCTURAL CONCEPT OF ESTIMATING THE INTERNATIONAL POSITION OF UKRAINE IN THE WORLD CONTEXT OF STATE FINANCIAL AND ECONOMIC SUPPORT TO THE AGRICULTURAL SECTOR

The article studies the problems of state financial and economic support to the agricultural sector in the world context and substantiates the structural concept of assessing the international position of Ukraine. It is confirmed that there is a connection between the annual values of indicators of total state support for the agricultural sector, support for producers and support for consumers and the international rating position of Ukraine. In the world context the ratings of countries are calculated on indicators of state financial and economic support to the agricultural sector: total estimate of support for the agricultural sector (TSE); producer support estimate (PSE) consumer support estimate (CSE); general service support estimate (GSSE). The international position of Ukraine in terms of ratings is determined, which is radically lower compared to the overall indicator of OECD member states and EU member states. It was confirmed that the dynamics of the ratings of Ukraine in the world context is insignificant, the variability is determined at the level of the 22nd – 24th place in terms of indicators of total estimate of support for the agricultural sector, estimate of support for producers and estimate of consumer support. The dynamics of the decrease in the gap of annual indicators of support for producers and consumers of the agricultural sector in Ukraine since 2018 has been determined. The best position of Ukraine in the international rating is confirmed by the indicator of estimate of general support for services. The analysis was the basis for designing the structural concept of estimating the international position of Ukraine in terms of state support trends for the financial and economic mechanism of state regulation of the development of the agricultural sector, the advantages of which are: determining the position of Ukraine in the world context in terms of state support trends for the agricultural sector; establishment of the level of connection of annual values of indicators of state financial and economic support to the agricultural sector; forming a comparative characteristic of the position of Ukraine to the overall indicator of the EU member states. The calculations confirmed the need to review the directions of state support for the mechanisms of state regulation of sustainable development of the agricultural sector for adaptation to European practices. It was established that within the framework of the implementation of state policy in terms of the development of support measures in the EU countries, seven categories of measures were introduced, among them: sector-wide and institutional measures; information and coordination measures; trade and commodity flow measures; labor measures; support for agriculture and food; general support; food aid and consumer support. It is determined that in the EU countries, the impact of economic cuts on food spending was mitigated thanks to government support, which partially compensated the loss of income, and the reduction in total income led to the maximum direction of food spending. The implementation of this approach confirmed the hypothesis that government support ensured the sustainability of food systems.

Environmental regulations, political risk and consumption-based carbon emissions: Evidence from OECD economies

The staggering rise in global temperature and abrupt change of climate are the responses of nature alerting humanity to limit the emissions of hazardous gases and adopt environmentally-benign life style. The present study explores empirically whether any changes in environmental policy stringency (EPSI), political risk (PR), and the interaction term of EPSI*PR result in any alteration of consumption-based carbon emissions (CBCE) of the 24 advanced OECD economies over the period of 1990–2020. Prior to the empirical estimations, various diagnostic tests are employed. The empirical techniques include, panel cointegration check, Cross-sectional Augmented Autoregressive Distributed Lags (CS-ARDL), and Dumitrescu & Hurlin panel causality test. The findings confirm that imports, gross domestic product, and stringency of environment policies activate CBCE in short-run. Whereas, a unit improvement in political risk and its interaction with environmental policy stringency give rise to 0.231 MtCO2 of CBCE in long run. Interestingly, the squared term of environmental policy stringency effectively tackles such emissions. Based on the findings, we conclude that the present environment related policies of OECD member states does not effectively limit CBCE. In order to achieve genuine emissions reduction goals, the selected nations should restructure their environment related policies by prioritizing increments in environmental policy stringency along with minimizing the risks involved in the political system.

The mediation effect of radical right parties on the nexus between immigration and right-wing terrorism

How does political representation of radical right parties (RRP) affect the relationship between immigration and right-wing terrorism targeting out-group members? Drawing on right-wing terrorism data of 31 OECD member states between 1970 and 2017, this paper explored the threefold relationship. Causal mediation analysis revealed that while growing immigration increases right-wing terrorism, RRPs have a mediation effect of decreasing attacks. Sensitivity analysis and robustness checks lend support to the findings. The article provides novel implications for the political consequences of RRP success and the effect of political representation on extremist violence.