An Intellectual History of National Accounting

The world never sleeps and economies do not stand still. As the scope, sophistication and complexity of economic transactions increase, new products appear and the institutions engaged in these exchanges themselves change. The nature of economic relationships is continually being transformed, as activities appear more ambiguous and the interpretation of economic statistics grows ever more difficult. The national accountant is increasingly being called upon to don the mantle of a shaman—expected to assume the crucial role of an intermediary between a real material world and a virtual representation constructed from partial and selective statistical observations. To interpret these phenomena, meaningfully and with integrity, economic statisticians should be well versed in a catechism that teaches the skills and knowledge to undertake this difficult task in an honest and effective manner. They equally require a relevant accompanying data framework to guide official efforts to gather information consistently and to incorporate coherently and according to well-defined principles and recognized international standards the many subtle judgments necessary to complete the overall picture of the economic system. But when the conceptual foundations of the present model of the national accounts are being progressively undermined by the shifting quicksands of economic theory, legal intervention, exogenous political determinations and the growing global nature of many transactions, even this may not be enough. The national accounts are a statistical talisman, emblematic and “inclusive” in every sense of the expression. Many people use the national accounts for different reasons and this review outlines first the purposes of national accounting and its conceptual legacy. It then describes in more detail the structure and contents of this thoughtful book, before considering the influence of history on the development of national accounting and the challenges facing practitioners in their efforts to keep accounting procedures both practically useful and conceptually and theoretically relevant. In the end, it is necessary to ask not only whether the national accounts portray what many observers would like them to show but also whether, even in a “pristine” macroeconomic sense, they still provide the best representation of what they are supposed to measure and meet policymakers’ requirements.