Wanted: a new leader with purpose at OECD

The Organisation for Economic Co-operation and Development is a body that frequently feels as cumbersome as its name. It contains an eclectic mix of data collection, research and economic forecasting, and serves as a forum for international policy making.

Much of its work is valuable, some elements more than others. Yet it requires renewed impetus. The OECD needs not just to increase its impact but to bring more emerging market governments into what was set up as - and still feels like - a club of rich countries.

Angel Gurria, the former Mexican finance minister and current OECD secretary-general, is in his second term of office, which expires next year. Although the institute has made some important progress recently, it needs new blood to speed up its development. The OECD needs a leader with both the intellectual firepower to lead policy debates and the political heft to broker international deals over policy with sensitive implications for its members.

Some of what the OECD does - in particular macroeconomic analysis and forecasting - duplicates work done elsewhere, such as the International Monetary Fund. Its research capability really adds value by collecting and analysing micro data on a host of different issues - health systems, development aid, labour market institutions and others.

These numbers and analysis can inform pivotal debate. For example, while the OECD cannot supplant the IMF in setting conditions for bailouts, having a second opinion over the structural reform demanded of countries such as Greece is a valuable role.

In the case of development aid, OECD data collection and analysis also form the basis for improving the quality of assistance, such as reforming damaging "tied aid" rules that compel recipients to spend the money on exports from the donor country.

The organisation comes into its own when it acts as a conclave for ministers in policy areas with collective action problems, where governments acting unilaterally will put themselves at a disadvantage. The OECD bribery convention has provided a model for governments to legislate against corruption while diminishing the fear their companies will be undercut by those from less scrupulous countries. Work on co-ordinating tax bases and on setting rules on transfer pricing helps governments to clamp down on the distorting practice of companies declaring profits in low-tax jurisdictions.

But for such processes to have legitimacy, the membership of the organisation must be widened. When the OECD expanded its activities in money laundering and particularly terror finance after the September 11 attacks, its governments found themselves imposing new rules on offshore centres, such as those in the Caribbean, that had little say. True, the OECD has accepted more nations into its ranks from the richer end of the emerging world: Mexico, Turkey, Chile. Still, it needs to improve those outreach efforts: an international convention on bribery to which neither China nor India are signatories is not a comprehensive solution.

With that in mind, Mr Gurria's successor will preferably be another candidate from an emerging market country and in any case must have substantial experience of analysing and implementing policy. There is a surfeit of problems today that demand collective solutions, and a paucity of international institutions ready and able to solve them. The OECD is far from perfect, but through its expertise and the role it has carved out it is well placed to address some of them. A strong leader and a diverse membership go hand in hand. The OECD must strive for both.

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