The Accounting Blind Spot in Public Infrastructure and Public Goods

Public infrastructure is increasingly delivered through financialised models despite extensive evidence of higher long-term cost, rigidity and fiscal risk. This paper argues their persistence is driven less by economic performance than by how public-sector accounting classifies capital, obligations and time. Public accounting frameworks are built to enforce annual fiscal discipline and control debt. They are not built to represent capital continuity or mission-aligned renewal. So a delivery model that defers recognition of obligations, smooths expenditure across reporting periods, or moves commitments off balance sheet appears fiscally responsible while embedding greater long-term fragility — and the appearance is what gets compared. â­ The claim is causal rather than descriptive. Accounting does not merely record infrastructure choices; it structures them, by rendering capital continuity, mission cycles and deferred fragility invisible. On that account the persistence of financialised delivery is an accounting outcome rather than a policy anomaly — the model is selected by the classification system, not by evidence of superiority. âš ï¸ And the paper's own conclusion is that its layer cannot fix this. Standards operationalise priorities; they do not set them. Without a conceptual expansion of public finance that recognises capital continuity as an object in its own right, accounting reform can only rearrange the surface of the problem.