1. Making Reforms Happen in a Shifting Wealth World
Mario PEZZINI
Director
OECD Development Centre
BUSAN, 30 November 2011

2. Outline
1 Shifting Wealth: changing external conditions
2 Challenges for domestic reform
3 Key messages and the research agenda going forward

3. A success story?
• A lower-middle income country
• Average 5% annual growth rate since 1990
• Improving rankings in the ease of doing business
• ‘Prudent public debt management’ (42.8% of GDP in 2009)
• 3% fiscal deficit
• Inflation at approx. 3% in the 2000s
• 60% of budget dedicated to social sectors
• Nearly 100% primary enrolment in 2008
• 80% health care coverage

4. Tunisia
Source: OECD/AfDB/UNECA (2010), African Economic Outlook

5. Main messages
1. As economic uncertainty deepens, now is the time for
developing countries to channel their recent prosperity
into an reform agenda, with emphasis on social cohesion
2. But OECD countries are also in deep need of structural
and social reforms.
3. It’s not only about what you do but also about how you do
it  relevance of the Making Reform Happen project
and sharing lessons / knowledge.

6. Outline
1 Shifting Wealth: changing external conditions
2 Challenges for domestic reform
3 Key messages and the research agenda going forward

7. The four-speed world in the 1990s
Source: OECD Development Centre, Perspectives on Global Development 2010 - Shifting Wealth

8. The four-speed world in the 2000s
Source: OECD Development Centre, Perspectives on Global Development 2011 – Social Cohesion in a Shifting World

9. Shifting Wealth: New resources for development
Fiscal revenue to GDP ratio (%)
Source: Authors’ calculations based on World Bank (2011)

10. Outline
1 Shifting Wealth: changing external conditions
2 Challenges for domestic reform
3 Key messages and the research agenda going forward

11. The aspirations of the emerging middle class
Billion OECD countries non-OECD economies
6
5
4
3 80%
68%
2
46% 50%
30%
1
70% 54% 50% 32% 20%
0
2000 2010 2012 2020 2030
Source: Author’s calculation based on Kharas (2010)

12. A new “geography” of poverty: From global to national redistribution?
LIC: low-income country
MIC: middle-income country
FCAS: by fragile and conflict-affected states
Source: A. Sumner (2010) Global poverty and the new bottom billion (IDS)

13. Growth in life satisfaction and income do not necessarily coincide
Annualized growth rates of life satisfaction and income 2006-
2010
Life satisfaction GDP per capita
8%
6%
4%
2%
0%
-2%
-4%
-6%
-8%
Tunisia Thailand India Brazil South Africa Morocco
Sources: Authors‘ calculation based on Gallup World Poll (2010) and World Bank (2010)

14. Social mobility: correlation of parent/child education
Source: OECD (2010) based on Hertz et al. (2007)

15. Outline
1 Shifting Wealth: changing external conditions
2 Challenges for domestic reform
3 Key messages and the research agenda going forward

16. Key messages and the research agenda going forward
1. The evolving international landscape matters: shifting wealth & growing
policy spillovers 
 national reform strategies must take into account the international dimension
2. Changing domestic conditions: emergence of a middle-class while persisting
pockets of poverty and rising inequality 
 Effective governments needed: taxation, fiscal legitimacy and quality of public services
 Compensation measures for losers – but carefully identify who stands to win and loose (voice
and representation)
3. The social cohesion dimension is increasingly relevant
 Social cohesion as a means and an end
 Civic participation to reinforce the sense of belonging and responsibility towards a social
contract
 Leadership and commitment

17. What is Social Cohesion?

18. Thank you
OECD Development Centre
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