For over 50 years the OECD has given independent advice to governments on over-arching economic issues including macroeconomic, structural and institutional policies. OECD Multi-Dimensional Country Reviews are a new tool adapted to the realities of developing economies. It will look at how a country is performing with regards to meeting the multiple objectives of growth, sustainability and equity, looking not just at the absolute levels which a country has achieved but also at how the underlying dynamics of a country’s development process affects these objectives. The primary goal of a Review is to identify the binding constraints to development in a country and suggest a strategy with specific policy recommendations and reform sequencing. This development strategy will be designed to support the multiple objectives of economic and social development and the well-being of citizens. The Reviews provide recommendations for public policy action by a country’s national authorities, although the findings will also be useful to international donors to inform their development co-operation with the country.
A multi-dimensional approach
Instead of taking a sectoral approach (for example, looking at macroeconomic, education, labour, finance, investment policies etc. in turn), the Reviews aim to analyse issues: the ‘binding constraints to development’ identified through the diagnosis. These binding constraints are not usually confined to a single policy area, but tend to cut across several areas. If, for instance, ‘informality’ is identified as a binding constraint to development in a certain country, it is likely to manifest in dual labour markets and social insurance systems, but is also likely to reduce tax collection, make product market regulation difficult, increase transaction costs and, if it affects financial markets, could raise financial stability concerns. Moreover, informality could be explained by a series of factors that go far beyond the labour market institutions to include weak transport connections between rural and urban areas, lack of enforcement of rule of law etc. The recommendations to tackle informality will therefore span several areas much beyond labour market policies.
Following the diagnosis, the Review will focus on two or three issues which are identified as the major barriers to development in the country under review. In this way, Multi-Dimensional Country Reviews are not intended to be an exhaustive list of all the development challenges facing a country. Instead, the Reviews pinpoint the two or three areas which could hold the key to kick-starting or accelerating development if unlocked by sound public policy action. Prioritising public policy action in a few critical areas is particularly important in developing countries where capacity and public resources may be limited. The Reviews will focus on medium-term development (i.e. a timeframe of five to ten years); short-term issues will be discussed only to the extent they have bearing on longer-term policy and institution design.
First Volume in the series
Recent economic growth in Myanmar has been relatively low for its level of income. The OECD’s medium-term growth forecasts indicate that without structural change the economy can grow at an average of 6.3% over 2013-17, somewhat below the government’s 7.7% target for between now and 2015.
To achieve this goal, and also set the foundations for solid and sustainable development, short-term actions for growth and poverty reduction should be appropriately sequenced with institutional change initiatives that promote democratic consolidation, systematic increases in productivity and equitable distribution of opportunities and income. More information