Tuborg Research Centre Seminar: Martin Rode, University of Navarra

Title: What policies does the OECD recommend to its members, and does it make a difference? Evidence from a new database

2014.03.26 | Bodil Westermann Krog

Date Fri 23 May
Time 13:00 14:00
Location Fuglesangs Allé 4, 8210 Aarhus V, building 2632(L), room 161

Speaker: Martin Rode, University of Navarra

Title: What policies does the OECD recommend to its members, and does it make a difference? Evidence from a new database (joint with Andreas Bergh and Margareta Dackehag, Lund University)

Abstract: We describe the policy advice in the OECD publication Economic Surveys by constructing a database that quantifies the perceived reform need for 23 member countries around 1985, 1995 and 2005. This is done by qualitatively assessing OECD recommendations for all member states, allowing us to quantify its content. With the resulting database, we empirically examine the content of policy recommendations, using a variety of different indicators. According to the results, OECD recommendations describe a policy consensus that is based on competition, work incentives, monetary reform, fiscal discipline and labor market reform. Around 70 percent of the variation in perceived need for reform can be explained by lagged levels of economic freedom. In particular, countries with more government intervention, lower property rights protection, and less access to sound money are perceived to have a bigger reform need. On the other hand, perceived reform need has no explanatory power on subsequent levels or changes in economic freedom. We conclude that OECD recommendations add little information to what is readily available, and there is no sign that the advice given has any real impact on the actual policy reforms of member states.

Organizer: Allan Sørensen

 

Tuborg Research Centre Seminars