OECD brings together more than 30 countries with a common goal of improving global trade and general economic performance. Despite the fact that the countries are brought together by similar principles such as democracy and free market economy, there have been differences in the economic outcomes when the countries are compared. This article analyses the differences that are seen in the United States and other OECD countries when it comes to various common aspects.
The aspect of health care
Healthcare is an important feature in any country, since apart from impacting on the economic performance of a country, it acts as a source of employment for many people. The OECD countries have heavily invested in research to come up with new medical technologies and advances. The disparity, however, comes in the financial aspect of health care. Unlike in other countries where health care is made very affordable, there is a notion that the American health care is very expensive. Besides, the fact that public funds are used to run health care programs such as Medicare and Medicaid makes the health care system in the U.S stand out. Social concerns have been raised about the efficiency of the health care system, America uses .
It cannot be argued that America spends more on health care that other OECD countries. In 2009 for example, the country recorded an expenditure of $8,000 per capita, while other nations spent a third or two-thirds of the same amount. The other countries here are Japan and Norway respectively. When the expenditure is viewed from the national income perspective, 17% of American GDP went to health care, while other OECD countries posted an average of 12% . The assertion that health care is more expensive in America is, therefore, true when the governmental expenditure is concerned. Many factors have been noted as leading to this situation. Some include the country having a relatively higher economy, having a more aged population and substantial investment in hospital systems and personnel. According to scholars, however, these reasons are not enough to explain the country’s higher expenditure on health care.
Sub-par education systems
Another common assertion is that America has an education system that is of lower quality when compared to other OECD countries. This statement is mostly informed by the nature of the performance of American students when subjected to international tests. In a 2012 report on the Trends in International Mathematics and Science Study (TIMSS), the International Association for the Evaluation of Educational Achievement (IEA) proved the poor performance of the American students. The TIMSS revealed that there was a huge performance gap between the students from the U.S in comparison to other countries in the OECD. The report noted that the educational standards of the country had not improved since the exercise was carried out years ago .
Another report compiled by the Organization for Economic Cooperation and Development (OECD) touched on results of an exercise carried out in 2009 referred to as the Program for International Student Assessment (PISA). According to the report, the American students performed poorly on the test served, compared to students from other OECD countries. The American students appeared not to be fully prepared to compete globally with their counterparts, and this was an indication of a failing or poor education system. Apart from the poor performance of the American students in general, the country had the problem of having even worse performance among the children of black and Hispanic ethnicities .
As the results of these tests and reports show, the American education system seems to be lagging behind when compared to the systems in other OECD countries. The argument that the American system is sub-par is, therefore, justified. However, there are critics of this assertation who point out that the comparative studies or tests are not correct since they fail to take into consideration unique factors in the American case. They say at inequality and access to education to minority groups in the country as contributing to the poor performance. The argument is that in other OECD countries, there is a lower level of social inequality meaning that all students get access to proper education. The critics argue that if the social inequality aspect could be considered, the American students would perform relatively better.
Issue of high incarceration rates
Another common assertion that proves the difference between America and other OECD countries is the rate of incarceration. Statistics show this assertion to be correct since data from the year 2000 indicates that the country had a rate of 700 people incarcerated for every 100,100. This was a rate that dwarfed the rates in other OECD countries, where the incarceration rates stood at 37 per 100,100 in Japan, 74 in the Netherlands and 86 in Italy. The countries that were closer to America were Portugal and Russia, which had the rates of 145 and 685 respectively for every 100,000 in their population . With projections showing that the rates increase over time, the disparity has grown larger over the years.
This argument is therefore proved to be correct when such statistics are looked at. There are however interesting aspects that can be used to explain this situation, especially when race is considered. In this high number of people incarcerated, a majority of them are from the minority groups and especially the black community. Just like in education, therefore, social inequality comes up as an aspect that explains the disparity of occurrences in America when con pared to other OECD countries. Unlike in other OECD countries that post high levels of social cohesion which is seen through the low rate of violent crimes, the American Society is not cohesive due to the number of violent crimes. All this can be attributed to the issue of poverty and social inequality. America has historically been subject to the marginalization of some of the minority groups. Unlike in other OECD countries whereby this is not the case, America has had to deal with minority groups that lack access to education and financial resources . The implication has been that the members of the minority groups have engaged in many criminal activities explaining their high incarceration rates.
Influence of the business model and strategic political management
The differences in the economic outcomes between America and other OECD countries can be easily explained when the two aspects of the business model and strategic political management are considered. The American business model is majorly informed by concepts of a liberal economy. The implication here is that the state has very minimal say or control in the activities carried out by private sector players. In the liberal economic setup, private entities are allowed to make individual economic decisions without the undue influence of external source especially the state. The minimal government intervention means that the private sector is allowed to be as innovative as possible when conducting business .
Other OECD countries such as Germany, however, subscribe to A business model heavily influenced by concepts of a social market economy. Here, unlike in the American case, the input of the state is heavily felt. The state allows for a particular form of free market capitalism to exist, but one which is guided by certain public policies. The policies often seek to exert some control to the occurrences in the country’s economy. Ultimately, this business model aims to protect the welfare of the regular citizens of the country as opposed to being concerned with the impact of interference to private entities .
Different business models applied in the OECD countries can, therefore, offer an explanation for various financial outcomes. In the average OECD country, the average household net-adjusted disposable income per capita stands at $ 25,908 annually, while the American average is $ 41,355. Besides, the average financial wealth per capita for an American household stands at $ 145 769, which is way higher compared to the OECD country average of $67.139. Another differing financial outcome comes in the form of jobs where 67% of the Americans within the working age had jobs, a rate higher than the OECD average of 65%. Regarding wages, America still performs better since the average worker has an annual income of $ 56,340, higher than the OECD average of only $ 36,118 .
Despite the good performance of America in the economic indicators mentioned above, there are concerns that the government has done little to counter some of the pertinent issues in the country. Questions of inequality, for example, have been noted, whereby the poor in the society do not benefit from the healthy economic performances of the country. This is mainly seen when wages are considered, with senior managers in the country’s companies having very high wages that cannot be compared to their workers.
The perceived inefficiency o the government can be argued to be the reason for reduced civic participation among Americans. This has the potential to compromise the aspect of democracy since there is a feeling that the political class only represents the corporations and the wealthy within the American society. This is highlighted in statistics on civic participation provided by the OECD, where the country posted a voter turnout of 68%; lower than that in other OECD countries. Also, the participation of the elite members of the society stood at 77%, while the bottom half had a turnout of 54% .
In conclusion, therefore, there are many differences between the conditions in America and mother OECD countries. There are various explanations of this state of affairs that this paper has covered. The aspect of democracy is, however, under threat, especially due to the decreased participation of the Americans in the lower class in civic duties such as voting.
Bibliography
Allard, G., & Martinez, C. A. (2008). "The influence of Government Policy and NGOs on capturing private investment.". VII Global Forum on International Investment.
Blumstein, A. (2009). "Mass Incarceration: Perspectives on US Imprisonment: Incarceration Trends.". University of Chicago Law School Roundtable 7, 91-325.
Carnoy, M., & Rothstein, R. (2013). What do international tests really show about U.S. student performance? Economic Policy Institute.
OECD. (2014). OECD Economic Surveys: United States 2014. OECD publishing.
Squires, D. A. (2013). Explaining High Health Care Spending in the United States: An International Comparison of Supply, Utilization, Prices, and Quality. The Commonwealth Fund.
