Ethical Government Accounting

Basu, Rahul and Vaze, Prashant and Chari, Ankita Navso (2024): Ethical Government Accounting. Published in: Review of Income and Wealth , Vol. 71, No. 2 (May 2025)

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: Public sector net worth, Sustainability, Exhaustible resources, Public sector accounting, Environmental accounting
• Subjects: E - Macroeconomics and Monetary Economics > E0 - General > E01 - Measurement and Data on National Income and Product Accounts and Wealth ; Environmental Accounts; H - Public Economics > H8 - Miscellaneous Issues > H83 - Public Administration ; Public Sector Accounting and Audits; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q56 - Environment and Development ; Environment and Trade ; Sustainability ; Environmental Accounts and Accounting ; Environmental Equity ; Population Growth

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