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Ethical Government Accounting

Author

Listed:
  • Basu, Rahul
  • Vaze, Prashant
  • Chari, Ankita Navso

Abstract

The System of National Accounts 2008 (SNA) and the Government Finance Statistics Manual 2014 (GFSM) are undergoing revision to better capture the extraction of mineral assets. We discuss current practices and the proposed changes and argue that they give a misleading picture of governments’ effectiveness as mineral owners in capturing the economic rent, leading to hidden wealth transfers to extractors. Case studies from Australia and Goa, India, illustrate the magnitude of wealth loss during the liquidation of mineral assets and the inadequacy of the current standards. The proposed split asset treatment could obscure potentially large and legally contentious wealth transfers. A case study based on Statistics Canada’s sectoral balance sheet illustrates this. Our suggestions align with the principle that mineral resources are inherited wealth, necessitating a stewardship role by mineral owners. We propose a framework that more accurately reflects impacts on national and public sector sustainability.

Suggested Citation

  • Basu, Rahul & Vaze, Prashant & Chari, Ankita Navso, 2024. "Ethical Government Accounting," MPRA Paper 123776, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:123776
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    References listed on IDEAS

    as
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    2. Basu, Rahul & Pegg, Scott, 2020. "Minerals are a shared inheritance: Accounting for the resource curse," MPRA Paper 102270, University Library of Munich, Germany.
    3. Carl Obst & Michael Vardon, 2014. "Recording environmental assets in the national accounts," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 30(1), pages 126-144.
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    5. Ezequiel Cabezon & Christian Henn, 2018. "Counting the Oil Money and the Elderly: Norway's Public Sector Balance Sheet," IMF Working Papers 2018/190, International Monetary Fund.
    6. Cust,James Frederick & Mihalyi,David, 2017. "Evidence for a presource curse ? oil discoveries, elevated expectations, and growth disappointments," Policy Research Working Paper Series 8140, The World Bank.
    7. Kjell Arne Brekke, 1997. "Hicksian Income from Resource Extraction in an Open Economy," Land Economics, University of Wisconsin Press, vol. 73(4), pages 516-527.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

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    JEL classification:

    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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