The Political Economy of National Statistics

There have been several challenges over the decades to the status of real GDP growth as the headline indicator of economic progress. This includes forceful critiques from those urging the need to account for environmental sustainability, and now from the digital sector, arguing that the figures obscure the industry’s ‘true’ contribution to the economy. As a result, for the first time since the 1950s, there is perhaps a broad coalition in favour of the replacement of GDP as the gauge of economic health. However, there is no equivalent breadth of voices coalescing around a single alternative measure (or set of measures). Instead, there is a proliferation of alternative approaches. This paper models the setting of national accounting standards as a co-operative game with multiple potential equilibrium outcomes, and considers the conditions for a move away from the prevailing statistical standard. The success of such a move depends on whether there is sufficient agreement on an alternative standard to enable a co-ordinated move. However, there is unlikely to be sufficient consensus without a compelling theory around which economists and policymakers can coalesce.