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. To date, however, the challenges have not affected the everyday use of GDP statistics in policy and political debate. This may now be changing due to the influence of the technology sector. Digital technologies are altering significantly the structure of production and consumption in ways that raise questions about issues such as the loss of business model invariance of GDP and whether the conventional production boundary judgement remains meaningful. Moreover, the digital sector is exerting its lobbying influence in policy debate to raise the profile of its criticisms of the conventional statistical definitions and practices, 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 a broad coalition in favour of the replacement of GDP as the gauge of economic health, prompting a perhaps surprising degree of popular interest in national accounting. 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 standards for economic measurement 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 – the role played by Keynes’s macroeconomics in the original creation of today’s national accounting standards.