Talking about the National Accounts: Statistics and the Democratic Conversation Diane Coyle Professor of Economics, University of Manchester IARIW-OECD conference, Paris, 17 April 2015

Outline Statistical stories in politics Economists and statistics What is the purpose of the SNA? What is the purpose of suggested alternatives? The need for a social welfare framework Holding policy to account with statistics

Source: ONS

History then and now Source:

Chart 1 GDP projection based on market interest rate expectations and £375 billion purchased assets The fan chart depicts the probability of various outcomes for GDP growth. It has been conditioned on the assumption that the stock of purchased assets financed by the issuance of central bank reserves remains at £375 billion throughout the forecast period. To the left of the vertical dashed line, the distribution reflects the likelihood of revisions to the data over the past; to the right, it reflects uncertainty over the evolution of GDP growth in the future. If economic circumstances identical to today’s were to prevail on 100 occasions, the MPC’s best collective judgement is that the mature estimate of GDP growth would lie within the darkest central band on only 30 of those occasions. The fan chart is constructed so that outturns are also expected to lie within each pair of the lighter green areas on 30 occasions. In any particular quarter of the forecast period, GDP growth is therefore expected to lie somewhere within the fan on 90 out of 100 occasions. And on the remaining 10 out of 100 occasions GDP growth can fall anywhere outside the green area of the fan chart. Over the forecast period, this has been depicted by the light grey background. See the box on page 39 of the November 2007 Inflation Report for a fuller description of the fan chart and what it represents.

Google it! Source: Bank of England

A reversal of fortunes

Did progress stop in 1973? Source: Avner Offer

SOCIAL PROGRESS INDEX 2014 FRAMEWORK Basic Human NeedsOpportunity Nutrition and Basic Medical Care  Undernourishment  Depth of food deficit  Maternal mortality rate  Child mortality rate  Deaths from infectious diseases Water and Sanitation  Access to piped water  Rural access to improved water source  Access to improved sanitation facilities Shelter  Availability of affordable housing  Access to electricity  Quality of electricity supply  Indoor air pollution attributable deaths Personal Safety  Homicide rate  Level of violent crime  Perceived criminality  Political terror  Traffic deaths Access to Basic Knowledge  Adult literacy rate  Primary school enrollment  Lower secondary school enrollment  Upper secondary school enrollment  Gender parity in secondary enrollment Access to Information and Communications  Mobile telephone subscriptions  Internet users  Press Freedom Index Health and Wellness  Life expectancy  Premature deaths from non-communicable diseases  Obesity rate  Outdoor air pollution attributable deaths  Suicide rate Ecosystem Sustainability  Greenhouse gas emissions  Water withdrawals as a percentage of resources  Biodiversity and habitat Personal Rights  Political rights  Freedom of speech  Freedom of assembly/association  Freedom of movement  Private property rights Personal Freedom and Choice  Freedom over life choices  Freedom of religion  Early marriage  Satisfied demand for contraception  Corruption Tolerance and Inclusion  Tolerance for immigrants  Tolerance for homosexuals  Discrimination and violence against minorities  Religious tolerance  Community safety net Access to Advanced Education  Years of tertiary schooling  Women’s average years in school  Inequality in the attainment of education  Globally ranked universities Social Progress Index Foundations of Wellbeing

UNITED KINGDOM ScoreRankScoreRankScoreRank BASIC HUMAN NEEDS N FOUNDATIONS OF WELLBEING N OPPORTUNITY N Nutrition and Basic Medical Care N Access to Basic Knowledge N Personal Rights S Undernourishment (% of pop.)5.01 N Adult literacy rate (% of pop. aged 15+)99.01 N Political rights (1=full rights; 7=no rights)11N Depth of food deficit (cal./undernourished person)81 N Primary school enrollment (% of children)99.83 N Freedom of speech (0=low; 2=high)21S Maternal mortality rate (deaths/100,000 live births)825 N Lower secondary school enrollment (% of children) N Freedom of assembly/association (0=low; 2=high)21N Child mortality rate (deaths/1,000 live births)4.626 N Upper secondary school enrollment (% of children) W Freedom of movement (0=low; 4=high)41N Deaths from infectious diseases (deaths/100,000) N Gender parity in secondary enrollment (girls/boys)1.01 N Private property rights (0=none; 100=full)903N Water and Sanitation N Access to Information and Communications N Personal Freedom and Choice N Access to piped water (% of pop.) N Mobile telephone subscriptions (subscriptions/100 people) N Freedom over life choices (% satisfied)83.931N Rural access to improved water source (% of pop.) N Internet users (% of pop.)89.87 N Freedom of religion (1=low; 4=high)355W Access to improved sanitation facilities (% of pop.) N Press Freedom Index (0=most free; 100=least free) N Early marriage (% of women aged 15-19)0.001N Satisfied demand for contraception (% of women)92.62S Corruption (0=high; 100=low)7812N Shelter N Health and Wellness N Tolerance and Inclusion N Availability of affordable housing (% satisfied) N Life expectancy (years) N Tolerance for immigrants (0=low; 100=high)79.316N Access to electricity (% of pop.) N Premature deaths from non-comm. diseases (prob. of dying) W Tolerance for homosexuals (0=low; 100=high)76.910N Quality of electricity supply (1=low; 7=high)6.69 S Obesity rate (% of pop.) W Discrim. and viol. against minorities (0=low; 10=high)5.344N Household air pollution attr. deaths (deaths/100,000)01 N Outdoor air pollution attributable deaths (deaths/100,000) W Religious tolerance (1=low; 4=high)280W Suicide rate (deaths/100,000)7.658 W Community safety net (0=low; 100=high)91.023N Personal Safety N Ecosystem Sustainability N Access to Advanced Education S Homicide rate (1= 20/100,000)11 N Greenhouse gas emissions (CO2 equivalents per GDP) N Years of tertiary schooling0.919N Level of violent crime (1=low; 5=high)220 N Water withdrawals as a percentage of resources2.682 W Women's average years in school13.611N Perceived criminality (1=low; 5=high)333 W Biodiv. and habitat (0=no protection; 100=high protection) N Inequality in the attainment of edu. (0=low; 1=high)0.0312N Political terror (1=low; 5=high)11 N Number of globally ranked universities741S Traffic deaths (deaths/100,000)3.73 N France, Italy, Japan, Finland, Iceland, Belgium, Spain, New Zealand, Canada, Korea, Republic of, Australia, Denmark, Germany, Israel, and Sweden GDP per capita rank: 19/133 Social Progress Index rank: 11/133 Social Progress Index score: 84.68

ONS Wheel of Wellbeing

GDP versus politics

Conclusions – two big challenges SNA statistics are misused (by politicians and economists) – but are becoming not fit for (democratic) purpose There are potentially more efficient ways measuring aggregate activity, and better ways of measuring welfare First big challenge - national statistical offices need to think about radically changing the balance of their work But GDP has an implicit welfare economics behind it, and ‘Beyond GDP’ approaches do not So dashboards risk being unstructured laundry lists Second big challenge - building the conceptual scaffolding for dashboards to measure social welfare and so tell citizens how well policy delivers