National Accounting As A Planning Tool In Less Developed Countries: Lessons Of Experience

This paper is directed at the following question: How far is the national accounting system as developed in the industrially advanced countries and recommended by the United Nations applicable and useful to countries at an early stage of development? In order to examine the suitability of this tool, the nature of economic policy decisions and their dependence on macro‐statistical constructs are analysed, the emphasis being on planning as actually undertaken in the field or going to be undertaken in the near future and not on planning activities as possibly ought to be attempted. The conclusion reached, based upon personal experience in Africa, the Caribbean area, Brazil and Venezuela, both as “producer” and “user” of data, is that planning is mainly limited to the public sector. Comprehensive plans, prepared with the assistance of foreign consultants, were generally forgotten soon after publication, the driving force behind those plans being external pressure by bilateral donors and international agencies and propaganda‐prestige motives. Real over‐all economic management or consistent medium term planning of the whole economy never appeared to be an important factor in the decision‐making process, possibly because those concepts are far too abstract and do not have short‐term impact. The role of national accounting should therefore be limited to the provision of a general framework and factual support for public sector planning activities. In practice the United Nations system has been found far too complicated and ambitious, not sufficiently development planning oriented, and not suitable to the limited statistical resources available in the developing countries. The paper recommends the publication of several detailed “case studies” in national accounting, hoping that those studies might help to identify types of accounting systems appropriate to different existing constellations. In the meantime a drastic scaling down of the United Nations system should be undertaken; we should try to equate demand and supply of relevant information. In the final part, the paper considers planning requirements (timetable and flexibility, information required for a general assessment of the economy, crucial role of the publicsector, relative precision), statistical requirements (resources, data available, priorities, international reporting) and decision‐makers’requirements (compactness, simplicity, background information, wishes of external aid donors) and recommends, as an interim measure, a simplified system of national accounts consisting of eight main tables.