Empower citizens to make them globalisation-ready, says OECD

5 Jun 17

Governments should move towards a more “empowering” role to combat the negative by-products of globalisation, according to the OECD.


Goods in a warehouse

Global trade has created both winners and losers.


The think-tank said urgent action is needed to address the backlash against the international, outward-facing economic model that has left many around the world behind in a pursuit for growth and prosperity.

It highlighted a number of measures that could be taken in order to tackle this in a paper, which was published last week ahead of a meeting of key ministers from across the bloc set for this week.

One of those was a shift towards a state that “serves its citizens by empowering them”, the report explained. “Social protection systems must become social enabling systems.”

The OECD stressed the importance of high quality and universal health and education services. This should include increased attention on early childhood, opportunities to learn socioeconomic skills in school and better support for disadvantaged students.

Social protection and training and work support should be designed in conjunction, it continued, to maximise individuals’ chances of reemployment and minimise disincentives to work.

The “traditional approach”, where temporary support, education, training and incentives for those out of work to look for a new job, appear to have “not, in practice, been sufficient”, it said, adding that both benefits and tax systems have tended to get less progressive.

It suggested entitlements be linked to individuals rather than jobs, called for locally tailored skills policies and emphasised the need to ensure access to life-long learning to help people learn new skills when theirs become insufficient or outdated.

More radical approaches, the OECD continued, include the introduction of a universal basic income; which is less prone to leaving gaps in coverage and could reduce the need for complex administration. However, a “major disadvantage” of UBI is its high costs and the risk of leaving some vulnerable groups at risk of poverty.

Another tool the national governments could use to deliver inclusive growth is the tax system, if its progressivity is restored, the think-tank said. One way to do this would be to shift the tax burden away from labour. Others include better gender policies and efforts to improve the integration of immigrants.

Sub-national governments also have a role to play, the report continued, especially in light of the fact that discontent is unevenly distributed geographically and can be particularly concentrated in certain areas.

Regional policies should focus on building on a place’s advantages and reducing its dependency on other successful regions, improving how cities function and are linked to surrounding areas and encouraging better governance based on cooperation within and across levels of government and different sectors. 

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