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Confronted with a growing need for educational buildings and a significant lack of funds, Belgium’s Flemish Community carried out an inquiry into building needs at all levels of education. This article concentrates on the methodology used for the inquiry, the findings and the consequences for Flemish educational building policy.

Crony capitalism and self-fulfilling expectations by international creditors are often suggested as two rival explanations for currency crisis. This paper examines a possible linkage between the two that has so far not been explored: corruption may affect a country’s composition of capital inflows in a way that makes it more likely to experience a currency crisis that is triggered/aided by international investors’ self-fulfilling expectations. Using data on bilateral foreign direct investment (FDI) and bilateral bank loans, this paper finds clear evidence that corrupt countries tend to have a particular composition of capital inflows that is relatively light in FDI. Earlier studies have indicated that a country that has such a capital inflow structure is more likely to run into a subsequent currency crisis (in part through self-fulfilling expectations of the international creditors). Thus, this paper has illustrated one particular channel through which crony capitalism can increase ...

The negative interest rate policy (NIRP) has been in place in the euro area since June 2014. While the NIRP can provide additional monetary accommodation in the situation where the neutral rate of interest is most likely negative, there are also unintended consequences for banks’ profitability and potential financial stability risks associated with this policy. The paper assesses the effect of the NIRP on the net interest rate margins of the euro area banks using quarterly consolidated bank level data for some 50 banking groups directly supervised by the Single Supervisory Mechanism. Since our data set extends to 2018, it allows us to examine the period of negative short-term interest rates separately from the period of low, but positive policy rates. The econometric results confirm the effect of the interest rate level on bank profitability and, in some specifications, also suggest an additional negative effect on bank profitability in the period of negative euro area short-term interest rates. This additional effect of the NIRP is the strongest when looking at the disaggregated components of net interest income, i.e. interest income and interest expense. However, the effects are not particularly robust across various profitability measures and tend to disappear when conditioning on macroeconomic variables, such as expected real GDP growth and inflation expectations. Therefore, in line with other existing studies, we find weak evidence of possible negative effects on bank profitability from keeping rates low for an extended period of time. Statistical analysis of the bank-level data also points to an ongoing compression of non-interest income, in particular for the best performing banks, and a slow recovery in return on total assets among all banks over the analysed period.

This Working Paper relates to the 2018 OECD Economic Survey of Euro Area

(https://www.oecd.org/economy/euro-area-and-european-union-economic-snapshot/)

The OECD Social Expenditure data base (SOCX) allows the monitoring of trends in aggregate social expenditure and changes in its composition. But aggregate social expenditure may sometimes fail to reflect the true ‘effort’ of a country in providing social support. Account needs to be taken of the effects of tax systems and transfers which, although mandatory, are not paid by government.

In order to get from a “gross” to a “net” concept of social expenditure various adjustments to raw data are needed. These adjustments concern: methods of benefit payment (“net” or “gross” of tax); the varying extent with which governments use fiscal instruments rather than cash transfers to pursue social policy goals; and the different degree to which government requires other economic agents to provide social expenditures. The analysis also addresses the automatic budget effects related to the stage of the economic cycle.

This analysis is a first attempt to capture in a comprehensive manner the effect ...

This document is the 2nd edition of the Net Social Expenditure paper published in 1999 (Adema, 1999). It contains an overview of net (after tax) public and private social expenditure indicators. These indicators have been developed to supplement available historical information on gross social expenditure trends by accounting for the varying impact of the tax system across countries. Tax systems can affect social spending in three ways:

• Governments levy direct taxes and social security contributions on cash transfers.
• Governments levy indirect taxes on goods and services bought by benefit recipients.
• Governments may award tax advantages similar to cash benefits and/or grant tax concessions aiming to stimulate the provision of private social benefits.

The document summarises the methodological framework as previously developed, but extends coverage to eighteen countries for which information for 1997 is now available: Australia, Austria, Belgium, Canada, the Czech ...

This paper contains an overview of net total (public and private) social expenditure indicators. These indicators have been developed to supplement available historical information on gross social expenditure trends by accounting for the varying impact of the tax system across countries. Tax systems can affect social spending in three ways:

• Governments levy direct taxes and social security contributions on cash transfers.
• Governments levy indirect taxes on goods and services bought by benefit recipients. And,
• Governments may award tax advantages similar to cash benefits and/or grant tax concessions aiming to stimulate purchase of insurance coverage by private agents.

The paper summarises the methodological framework as previously developed, but extends coverage to thirteen countries for which information for 1993 and/or 1995 is now available: Australia, Belgium, Canada, Denmark, Finland, Germany, Ireland, Italy, the Netherlands, Norway, Sweden, the United Kingdom ...

This is the 2005 edition of a Net Social Expenditure paper that contains information on net (after tax) public and private social expenditure. These indicators supplement the detailed historical information on gross (before tax) publicly mandated social expenditure in the OECD Social Expenditure Database by accounting for the varying roles of voluntary private social spending and the tax system on social policy across OECD countries. Government intervention through the tax system affects social spending as governments levy direct taxes and social security contributions on cash transfers, and indirect taxes on goods and services bought by benefit recipients. In addition, governments may award tax advantages similar to cash benefits and/or grant tax concessions aiming to stimulate the provision of private social benefits. Through compulsion and tax relief public policy contributes to private pension plans, and such arrangements are generally considered within the social domain. This document refines the methodological framework previously developed per earlier editions of net social expenditure and presents indicators based on a common questionnaire for twenty-three OECD countries for which information on taxation of benefits in 2001 is now available: Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, Finland, France, Germany, Iceland, Ireland, Italy, Japan, Korea, Mexico, the Netherlands, New Zealand, Norway, the Slovak Republic, Sweden, Spain, the United Kingdom and the United States. Accounting for the impact of the tax system and private social expenditure leads to a greater similarity in social expenditure to GDP ratios across countries and to a reassessment of the magnitude of welfare states. Usually, Denmark and Sweden are seen as the biggest social spenders. After accounting for the impact of taxation social expenditure to GDP ratios appear highest in France, Germany and Sweden.

Building on an approach pioneered in the OECD’s Taxing Energy Use for Sustainable Development report, this paper develops a methodology to estimate effective carbon rates net of pre-tax fossil fuel support: the Net Effective Carbon Rates (Net ECR). This exercise is made possible by combining the two OECD databases: the Taxing Energy Use and Effective Carbon Rates database (the backbone of the newly established OECD series on Carbon Pricing and Energy Taxation) and the Inventory of Support Measures for Fossil Fuels.

The paper then explores potential use cases of this new indicator. In particular, it explains how the Net ECR can be used to calculate fossil fuel support (FFS) against external carbon pricing benchmarks and why such an approach facilitates comparisons of FFS across countries and over time. The paper’s conclusions include avenues for future research.

This report makes a case for investment in a competitive, open-access national fibre-to-the-home network rollout based on potential spillovers in four key sectors of the economy: electricity, health, transportation and education. This research offers a new approach to evaluating the costs of building the most forward-looking network possible by evaluating what short-term cost savings (benefits) would have to be achieved in other key economic sectors to justify the investment. On average, a cost savings of between 0.5% and 1.5% in each of the four sectors over ten years resulting directly from the new broadband network platform could justify the cost of building a national point-to-point, fibre-to-the-home network.

The aim of this paper is to examine the economic impact of proposals to add a non-cost “premium” to international telecommunication charges. This work follows up on earlier OECD work which examined international traffic exchange. The paper concludes that attempts to use non-market methods, and distort prices, is likely to have negative implications for the provision of international telecommunication services and that competition is acting to more efficiently meet policy goals.

1. Economists and policymakers increasingly use the word “actuarial” in the analysis of pension systems and retirement incentives. But the debate is often confused. “Actuarial fairness” and “actuarial neutrality” are promoted loosely as desirable goals of pension reform. This paper distinguishes two actuarial concepts and discusses their importance for defined-benefit, defined-contribution and notional accounts pension plans. • Actuarial fairness, which requires that the present value of lifetime contributions equals the present value of lifetime benefits. Actuarial fairness relates to the entire lifetime of contributions and benefits • Actuarial neutrality, which requires that the present value of accrued pension benefits for working an additional year is the same as in the year before (meaning that benefits increase only by the additional entitlement earned in that year). Conversely, retiring a year earlier should reduce the pension benefit both by the entitlement that would have been earned during the year and by an amount to reflect the longer duration for which the pension must be paid. Actuarial neutrality is a marginal concept, relating to the effect of working an additional year. 2. The discussion shows that it is very difficult to design pension systems around these actuarial concepts alone. Most retirement income systems have several components; some of these may be actuarially fair or actuarially neutral but others, notably safety-nets to protect retirees from poverty, will by definition not fulfil the conditions of actuarial fairness or neutrality. Finally, both concepts are defined across the population, regardless of the systematic differences in life-expectancy between women and men or between low-income groups and richer workers. People who expect to live longer will get a better deal out of the pension system than those who are expected to die earlier.

With concern about how to finance the Millennium Development Goals (MDGs) widespread, recent donor pledges to raise aid volumes are welcome. However, aid alone will not suffice – bringing in new actors and sources of development finance will be essential. In many developing countries, this is already happening, creating new opportunities and challenges for their governments and donors....

Today more than ever, spectrum is identified by policy makers as a key asset to support growth in the digital economy. This report provides information and analysis on new approaches to radiofrequency spectrum management in OECD countries. The emergence of new technologies such as cognitive radio and geo-location databases enables licensed or unlicensed shared use of spectrum. These approaches aim at maximising spectrum efficiency by allowing a third party to use underutilised spectrum resources. An example of the success of unlicensed spectrum is that of Wi-Fi networks. The report also covers incentive auctions, an innovative approach to transfer spectrum resources from less to more valuable uses through market mechanisms.

This paper suggests some avenues to explore as new sources of value creation and capture in the agro-food sector. The range of opportunities for value creation is vast, and this paper does not pretend to be exhaustive. New strategies are being prepared by different stakeholders in the sector, in an uncertain and competitive context of globalisation where the expectations of consumers and society in general are evolving.