Results of the Global Consultation on Government and Other Non-Market Producers’ Owned Assets – Cost of Using Capital

Govt. and other NMP owned assets- capital services In the AEG meeting in Dec 2004, there was strong support in principle for including a return to capital, viewed as an opportunity cost, in the measurement of non-market output. However, concerns were expressed about the rate of return to be chosen and availability of data for capital stock. The ISWGNA has conducted a global electronic consultation: what should be used to reflect the cost of using non-financial assets: Consumption of fixed capital only, which is the current recommendation, or the full cost of capital services (approximately consumption of fixed capital plus a return to capital)? If the full cost of capital is chosen, should it apply to all non-financial assets owned by the non-market producer or just some of them?

Govt. and other NMP owned assets- capital services No Question(s) Yes 1 Do you agree in principle with the proposal to replace consumption of fixed capital with capital services when summing costs to derive estimates of output of government and other non-market producers? 12 9 2 If you agree with the principle but still do not agree with the proposal, what are the reasons? (a) Time series data available too short and therefore stock data for non-market producers not yet available (b) Concerns about having to make assumptions about rates of return (c) Concerns about comparability among countries of such estimates (d) Other reason 8 5 3 -

Govt. and other NMP owned assets- capital services Conclusions: Only 22 countries responded, not enough for any kind of definitive conclusions; all respondents (except one) are orgn. responsible for deriving estimates of output of Government; Out of 22 countries, 12 agree in principle and 9 disagree; Of the 12 countries that agree in principle, 8 express reservation/difficulty in implementation of the proposal; Only 4 countries agree to the proposal in principle as well as on practical considerations; Country consultations on Dec 2004 AEG decisions show that number of countries that expressed agreement, reservation in implementation and disagreement of the AEG decision on the issue are 20, 12 and 14 respectively; 6 additional countries responded to Global Consultation that did not respond to the country consultation – 3 agree in principle but not on practical considerations and 3 disagree; If one combines responses to the two consultations– countries in agreement : 32; countries expressing reservation/difficulty in implementation: 20; and countries in disagreement with the proposal: 23; and Response too small for analysis of other issues

Thank You