National accounts, wellbeing, and the performance of government

This article discusses the evolving ways in which the national accounts are, or could be, used to inform and assist in key areas of concern to governments and their citizens. It begins with a discussion of 'traditional' national accounts and the familiar uses that are made of them to gauge the level of economic activity and material wellbeing. It goes on to discuss how the disciplined and integrated stock/flow presentation of national accounts could be more fully exploited to assess such questions as the adequacy and sustainability of national and public investment and to inform better macroeconomic and macro-prudential polices. It describes extended usage of the national accounts to assess government's own direct contribution to the generation of value, in the form of public services. In the same vein, distributionally adjusted national accounts could be used to provide evidence not just about the material prosperity of a society in aggregate but about trends in material wellbeing across the income distribution. There is clearly no reason why these trends should all be the same. Finally, it goes on to discuss the currently topical (deservedly) measurement of national wellbeing. This raises a number of new issues, many of which are warmly debated and not, at present, fully resolved. Copyright 2011, Oxford University Press.