The Organisation for Economic Co-operation and Development (OECD; , OCDE) is an intergovernmental organisation with 38 member countries. It was founded in 1961 to stimulate economic progress and world trade. The OECD is a forum whose member countries describe themselves as committed to democracy and the market economy, providing a platform for collective problem-solving, analysis, and coordination.
In 2026, their collective population was 1.38 billion people with high levels of human development. , OECD member countries collectively comprised 58.4% of global nominal GDP and 38.9% of global GDP at purchasing power parity. The OECD is an official United Nations observer. Member states have strong social security systems. The OECD is headquartered at the Château de la Muette in Paris, France. The OECD is funded by contributions from member countries and publishes annual reports on economic data as well as a variety of evaluations and rankings.
History Organisation for European Economic Co-operation The OECD is the successor organisation to the Organisation for European Economic Co-operation (OEEC), established in April 1948 among the European recipients of Marshall Plan aid for the reconstruction of Europe after World War II. Only Western European states were members of the OEEC, whose primary function was the allocation of American aid. Its Secretaries-General were the Frenchmen Robert Marjolin (1948–1955) and René Sergent (1955–1960). It was headquartered in the Château de la Muette in Paris.
Following the end of Marshall aid in 1952, the OEEC focused on economic issues. Its coordinating role was challenged after the 1957 Rome Treaties establishing the European Economic Community and Euratom. The OEEC provided a framework for negotiations aimed at setting up a European Free Trade Area, to bring the EEC's Inner Six and other OEEC members together on a multilateral basis. In 1958, a European Nuclear Energy Agency was set up in response to Euratom.
By this time, some leading countries felt that the OEEC had outlived its purpose but could be adapted to fulfil a more global mission, which proved to be a cumbersome task. Following several (occasionally unruly) meetings at the Hotel Majestic in Paris, which began in January 1960, a resolution was reached to create a body that would not only solve European and Atlantic economic issues, but also devise policies that could assist less developed countries. This reconstituted organisation would bring the US and Canada, who were already OEEC observers, on board as full members, and the OEEC would set to work straight away on convincing Japan to join the organisation.
Founding The Convention on the Organisation for Economic Co-operation and Development was signed on 14 December 1960, and the OECD officially superseded the OEEC in September 1961, consisting of the European founder countries of the OEEC, with the additions of the United States and Canada. Three countries, (the Netherlands, Luxembourg, and Italy)—all OEEC members—ratified the OECD Convention after September 1961, but are nevertheless considered founding members. The official founding members were Austria, Belgium, Canada, Denmark, France, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the United Kingdom, the United States, and West Germany.
Japan became a member in 1964, and over the following decade, Finland, Australia, and New Zealand also joined the organisation. Yugoslavia had observer status in the organisation, starting with the establishment of the OECD, until its dissolution as a country. The OECD also created agencies such as the OECD Development Centre (1961), International Energy Agency (IEA, 1974), and Financial Action Task Force on Money Laundering (FATF).
The aims of the OECD are stated in Article 1 of the Convention as: To achieve the highest sustainable economic growth and employment and a rising standard of living in Member countries, while maintaining financial stability To contribute to sound economic expansion in Member as well as non-member countries To contribute to the expansion of world trade
Enlargement to Central Europe Following the Revolutions of 1989, the OECD began assisting countries in Central Europe (especially the Visegrád Group) to prepare market economy reforms. In 1990, the Centre for Co-operation with European Economies in Transition (now succeeded by the Centre for Cooperation with Non-Members) was established, and in 1991, the programme "Partners in Transition" was launched to offer a partnership to Czechoslovakia, Hungary and Poland, including a membership option for these countries. As a result of this, Poland, Hungary, the Czech Republic and Slovakia, as well as South Korea and Mexico, became members of the OECD between 1996 and 2000.
Reform and further enlargement East Germany joined on 3 October 1990 through reunification with West Germany. In the 1990s, several European countries, now members of the European Union, expressed their willingness to join the Organisation. In 1995, Cyprus applied for membership, but according to the Cypriot government, it was vetoed by Turkey. In 1996, Estonia, Latvia, and Lithuania signed a Joint Declaration expressing willingness to become members of the OECD, and Slovenia also applied for membership that same year. In 2005, Malta applied to join the Organisation. The EU is lobbying for the admission of all EU member states. Romania reaffirmed in 2012 its intention to become a member of the Organisation through the letter addressed by Romanian Prime Minister Victor Ponta to OECD Secretary-General José Ángel Gurría. In September 2012, the government of Bulgaria confirmed it would apply for membership before the OECD Secretariat.
The OECD established a working group headed by ambassador Seiichiro Noboru to work out a plan for the enlargement with non-members. The working group defined four criteria that must be fulfilled: "like-mindedness", "significant player", "mutual benefit" and "global considerations." The working group's recommendations were presented at the OECD Ministerial Council Meeting on 13 May 2004, and on 16 May 2007, the OECD Ministerial Council decided to open accession discussions with Chile, Estonia, Israel, Russia, and Slovenia, and to strengthen cooperation with Brazil, China, India, Indonesia, and South Africa through a process of enhanced engagement. Chile, Slovenia, Israel, and Estonia all became members in 2010. In March 2014, the OECD halted membership talks with Russia in response to its annexation of Crimea.
In 2013, the OECD decided to open membership talks with Colombia and Latvia. In 2015, the Organisation opened talks with Costa Rica and Lithuania. Latvia became a member on 1 July 2016, and Lithuania soon followed on 5 July 2018. Colombia signed the accession agreement on 30 May 2018 and became a member on 28 April 2020. On 15 May 2020, the OECD decided to extend a formal invitation for Costa Rica to join the OECD, which joined as a member on 25 May 2021.
Other countries that have expressed interest in OECD membership are Argentina, Brazil, Croatia, Malaysia and Peru.
In January 2022, the OECD reported that membership talks were underway with Argentina, Brazil, Bulgaria, Croatia, Peru and Romania.
In March 2022, the OECD suspended the participation of Russia and Belarus due to the ongoing Russian invasion of Ukraine.OECD suspends Russia, Belarus from any participation.
In June 2022, during the annual OECD Ministerial Council Meeting, the Roadmaps for the Accession to the OECD Convention for Brazil, Bulgaria, Croatia, Peru and Romania were adopted.[Bulgaria, Croatia, Romania on track to join OECD]. In March 2024, the Roadmaps for the Accession to the OECD were adopted with Argentina and Indonesia, and in July 2024, also with Thailand.
Objectives and issues
Multilateral Surveillance
The OECD conducts multilateral surveillance as part of its economic monitoring and policy co-ordination activities among member countries. This function has developed through regular peer reviews, comparative analysis, and policy assessments carried out within the framework of the Organisation's committees and its Economics Department.
Taxation The OECD sets the rules governing international taxation for multinationals through the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations, a Model Tax Convention and country-by-country reporting rules.
The OECD publishes and updates a model tax convention that serves as a template for allocating taxation rights between countries. This model is accompanied by a set of commentaries that reflect OECD-level interpretation of the content of the model convention provisions. In general, this model allocates the primary right to tax to the country from which capital investment originates (i.e., the home, or resident country) rather than the country in which the investment is made (the host, or source country). As a result, it is most effective between two countries with reciprocal investment flows (such as among the OECD member countries), but can be unbalanced when one of the signatory countries is economically weaker than the other (such as between OECD and non-OECD pairings). Additionally, the OECD has published and updated the Transfer Pricing Guidelines since 1995. The Transfer Pricing Guidelines serve as a template for the profit allocation of inter-company transactions to countries.
Pillar 1 An OECD proposal to allocate multinational profits (for taxing purposes) to countries where they do business, by a formula, including to markets which multinationals sell into without a physical presence. This is hoped to eliminate the need for Digital Services Tax implemented by several countries, including France. There are exclusions and minimum thresholds, including banking and extractive industries. The proposal involves allocating only residual profit (i.e., profits above what is established through transfer pricing, thus creating a hybrid mechanism). This is essentially no change to what is currently allowed (routine profits allocated using transfer pricing + residual profits allocated through profit split). Pillar 2 On 1 July 2021, finance officials from 130 countries agreed on plans for a new international taxation policy known as the global minimum corporate tax (of 15%). If a country taxes a multinational at a lower rate, the multinational's HQ will receive the difference.
All the major economies agreed to pass national laws that would require corporations to pay at least 15% income tax in the countries they operate. This new policy would end the practice of locating world headquarters in small countries with very low taxation rates. Governments hope to recoup some of the lost revenue, estimated at $100 billion to $240 billion each year. The new system was promoted by the Biden Administration in the United States and the OECD. Secretary-General Mathias Cormann of the OECD said, "This historic package will ensure that large multinational companies pay their fair share of tax everywhere."Paul Hannon and Kate Davidson, "U.S. Wins International Backing for Global Minimum Tax." Wall Street Journal July 1, 2021
Multinational corporations The OECD Guidelines for Multinational Enterprises are a set of legally non-binding guidelines attached as an annexe to the OECD Declaration on International Investment and Multinational Enterprises. They are recommendations providing principles and standards for responsible business conduct for multinational corporations operating in or from countries adhering to the Declaration.
Publications