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M60 Patton

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Across the OECD, we saw an enormous increase in unemployment in 2008–09. While in Australia unemployment now stands at 5 per cent, in other OECD countries it is up to 10 per cent. In the Netherlands it is about 4 per cent thanks to some reforms introduced before, rather than after, the crisis. But while both Australia and the Netherlands escaped relatively unscathed, in the OECD and in the euro area average unemployment is now about 10 per cent. Being an average, this reflects not just low figures such as that of the Netherlands, but also countries such as Spain, where 20 per cent of the population is unemployed.

Further, when group investments in a policy are modest—in other words, people, businesses or families are not putting 33 Delivering Policy Reform significant private money or resources at stake in the expectation that reforms will continue—there is a higher probability of reversal because the reform is not rooted in society. This is because nobody is organising their lives around the expectation that the reform will continue. It is this combination of fluidity in groups and a lack of significant personal investment that presents the greatest potential for reform erosion.

Until recently there were cases where a schoolteacher could hand on his job to his son. To change this culture, the Mexican Government and the OECD are working with teachers and school leaders to institute a program of performance management of education, and similar programs are being introduced in other countries. By creating an education system that rewards merit, governments can set appropriate incentives both in terms of career and in terms of payment. An overview of contemporary reforms is not complete without discussing the issue of climate change.

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