Campaigning on expertise: how the OECD framed EU welfare and labour market policies – and why success could trigger failure

Abstract

This article explains how the Organization for Economic Co- operation and Development (OECD) assumed a leadership role in creating and disseminating liberal welfare reform and labour market policy proposals between 1994 and 2001. The article first sketches the increased Europeanization of welfare and labour market policies throughout the 1990s. The second part examines how international organizations such as the OECD influence agenda-setting at different levels of policy-making by providing a controlled environment for the creation, development and dissemination of political discourse. The OECD’s influence on policy-making can be explained through an analysis of the specific features of its ‘organizational discourse’, dominated by liberal economists, and characterized by the exclusion of interest groups. The third part takes the OECD Jobs Study (1994)as an exemplary case of its organizational discourse and demonstrates how the OECD utilized this study to bridge the gap between abstract liberal economic beliefs and concrete agenda-setting efforts. It underlines the high degree of influence of the Jobs Study on the EU’s subsequent European Employment Strategy (EES). The conclusion poses the question: to what extent could the OECD’s ‘campaigning on expertise’ potentially weaken its long-term institutional interests if the EU chooses to ‘take over’ OECD discourses wholesale – thereby leaving less organizational space for the OECD in the future?

Keywords:

• Agenda-setting
• European Employment Strategy
• European Union
• Organization for Economic Co-operation and Development
• organizational discourse
• welfare reform

Acknowledgments

The author is grateful to six current and former OECD employees for their agreement to be interviewed. Thanks also to Andreas Bieler, Deborah Mabbett, Susan Milner, Bruno Palier, and two anonymous reviewers for helpful suggestions and comments. I acknowledge the financial support of the ‘Evangelisches Studienwerk – Haus Villigst’, in Schwerte, Germany.

Notes

In September 2002, DEELSA experienced a reorganization and lost its education section, which subsequently became an independent Directorate in its own right. Since the article focuses on the time-frame before reorganization, the abbreviation DEELSA is used throughout.

The connotation of the above terms is rather different depending on the policy- making context in which they are applied. The term ‘activation’ is closest to earlier notions of active labour market policy (ALMP) as used since the 1970s because it focuses on large sections or all groups of the unemployed, while the term ‘workfare’ stands for a restrictive approach towards the group of long-term benefit recipients. The origins of workfare can be traced to the Reagan administration’s Community Work Experience Program (CWEP), passed by Congress in 1982, which allowed US states for the first time to require welfare recipients to work in order to qualify for benefits (Gottschalk 1998: 92). The idea featured prominently in subsequent World Bank documents (1990). The OECD has occasionally used the term ‘workfare’ while EU discourses refer exclusively to ‘activation’

For details, see the website of the European Employment Observatory at: http:// www.eu-employment-observatory.net/

Schön and Rein (1994) describe the emergence of new ‘policy frames’ and their subsequent acceptance by policy-makers as resulting in policy change. This article argues that organizational discourse is a precondition for the development of such policy frames, i.e. an early stage in the process of supplying them.

National ministries develop expert personnel to monitor the existing national legislative and institutional heritage in order to receive advice on specific micro- level changes and adaptations. International organizations, in contrast, are more able to nurture ‘specific intellectuals’ for certain policy sectors. The first kind of expert will tend to explain why change is difficult for reasons of national path- dependency while the second kind of expert will argue that policy-learning from ‘best practice’ in other countries provides for better outcomes.

The ad hoc groups are ‘not ad hoc at all except in name’ (personal communication, OECD official, November 2001). Some of these groups deal with the development of statistical methods in order to improve the collection and comparability of data, while others deal with regulatory questions. They often work horizontally with a number of Directorates or are multi-year co-operative projects in their own right, with loose ties to the OECD.

The OECD does not provide statistical data about the educational and professional background of its personnel. A breakdown by nationality of the highest ‘A grade’ OECD rank shows that the United States and the United Kingdom with 133 and 90 ‘A grade’ members of staff make up the largest constituency after the French (with 182) and before Canada, Germany, Japan and Italy with between 62 and 51 each (out of 858 on 15 May 2002, data provided by the OECD secretariat). However, these figures do not adequately represent the dominance of Anglo- American authors on the list of published OECD material throughout the 1990s.

A good example of the link between general and specific OECD discourses is the recent policy fashion of ‘case management’ in OECD countries concerning both health policy and employment policy. In both policy fields, individuals are considered as ‘cases’ that merit certain quantitative resource allocations according to specific average case costs (be it for hospital treatment or job placement efforts). The OECD holds that case management will improve institutional incentive regimes, which are otherwise held to be based on ad hoc decision-making or rent- seeking professional discretion.

For details, see the list of OECD publications on the topic throughout the 1990s.

More recently, the OECD has added ‘sustainability’ as the eleventh point to its list of demands for labour market policy-making. This demonstrates that the OECD accommodates new discourses that emerge from outside in cases in which they complement existing OECD frameworks. The EU concept of ‘gender mainstreaming’, on the other hand, has been excluded from the OECD discourse, which demonstrates that the organization cannot see a comparative advantage for own activism in this field.

The epistemic vagueness of the OECD’s position in its interaction with academic economics helps the organization to remain on friendly terms with the profession. In fact, the relationship works both ways and some academic economists exercise strong influence on the OECD discourse owing to their role as consultants to the organization. Layard, for example, questioned a number of core assumptions of the Jobs Study regarding job protection legislation and the relationship between taxation levels and employment outcomes (Layard 1999). However, he was generally supportive of other OECD claims about the need to cut down the duration and size of unemployment compensation in order to increase pressure on the unemployed to accept any kind of available employment. The OECD published Layard’s comments and turned down some of the Jobs Study’s earlier flexibility claims in the second half of the 1990s. This was an agreement to partially disagree for the sake of an additional authoritative ‘voice’ (cf. Fine 1998: 42–8).

For example, OECD publications on employment focus on representing policy consensus rather than controversy. This is particularly evident in OECD conference proceedings (cf. 2000b), which underline the OECD’s discursive power. National policy-makers are invited to address OECD conferences and tend to use political terminology that was previously invented within the OECD itself. Thus, such conferences give the impression of a ‘consensus line-up’, i.e. the speakers are invited to restate dominant OECD discourses rather than pose new questions.

A DEELSA official remarked that outside expertise was invited by the organization to ‘scope’ work on newly emerging problems but that he personally ‘would rarely allow consultants’ papers to go to countries without commentaries’ and that additional papers would be produced to summarize key points as judged from the OECD perspective (personal communication, February 2002). In effect, the organization’s discourse is isolated from outside interests in a way that would not be possible in the EU context.

The recent OECD ‘Programme for International Student Assessment’ (PISA) – benchmarking member states’ education systems – has emerged as a major new campaign issue of the OECD’s Directorate for Education, and many parallels to the case of the Jobs Study can be observed.