SNA and beyond: Towards a broader accounting framework that links the SNA, SDGs and other global initiatives¹

1.1Centuries of debate about The Economy

A key question concerning economic statistics is the future of the System of National Accounts (SNA). The SNA is the global accounting framework to measure economic activity, economic wealth and the general structure of the economy. It rapidly proliferated all over the world after the Second World War and its key indicator, the Gross Domestic Product (GDP), has become the most influential indicator in society.22 The success of the SNA/GDP is characterized by Nobel Prize Winners Paul Samuelson and William Nordhaus as: “while the GDP and the rest of the national income accounts may seem to be arcane concepts, they are truly among the great inventions of the twentieth century.”33

The way we measure the economy has been debated for centuries. Since the first national accounts in the late 17th century, the “boundaries” of “the economy” have been disputed [2, 3, 4]. In the first couple of centuries there were debates about which sectors were productive and which were not. After the Second World War, when the first edition of the SNA was drafted, the inclusion of government services was a major point of contention [5, 6]. In the end, most countries adopted the Keynesian-inspired SNA which includes government. However, countries with centrally planned economies used a different system called the Material Product System, which focused on material goods rather than services. It was only after the collapse of the Soviet Union that these countries adopted the production boundaries, including all services, defined by the SNA1993.

All in all, in the 400+ years history of national income accounting, there has only been a globally agreed boundary of “the economy” for the last 27 years. This historical perspective makes it clear that “the economy” is not an objective phenomenon: it is a convention which reflects the scientific, empirical and socio-economic situation of that era. Debate about the boundaries therefore continues and will (and should) never cease.

In the discussion of the boundary of the economy, specific issues have been raised. These include unpaid household work/care as well as other time use categories. Certain activities, on which people spend quite a bit of time, are argued to be part of production (e.g. unpaid household work/care) or welfare (leisure). Including these items can have a significant effect on GDP [7, 8]. The proponents of these adjustments argue that current conventions lead to incorrect interpretations of societal developments. For example, the exclusion of unpaid household work/care or childcare in the SNA leads to an underappreciation of the contribution of woman to society [9, 10, 11].

The exclusion of environmental damages or resource depletion from the SNA has also been criticized. Problems such as resource limits, acid rain, ozone depletion, climate change and biodiversity loss have made it abundantly clear that the way we measure the economy is missing important phenomena affecting our current wellbeing and that of future generations (i.e. sustainability). Many authors have also pointed out the problems related to some accounting rules of the SNA. For example, some environmental disasters, such as oil spills, are “good” for the economy because the clean-up leads to greater economic activity.

Measuring the economy is also increasingly problematic because of economic phenomena such as digitalization and globalization. For example, multinationals can use their global presence to lower their tax burden through transfer pricing or other means. The profit thereby no longer is an indication of economic activity but rather an administrative phenomenon, which affects GDP. A famous example is the upward revision of the Irish GDP by 26.3% which was due to the globalization activities of multinationals [12]. In the case of digitalization, the welfare impacts of free internet services by consumers (search engines, encyclopedia, social media, free games) and various other services have been quantified [13, 14].

2.1Objectives of this paper

The previous sections have shown that the measurement of the economy has shifted as societal, economic and environmental conditions have evolved. The world is currently experiencing important developments such as the COVID19 pandemic, climate change, biodiversity loss, inequalities within and between countries, growing populism, globalization and digitization. At the same time, this is the era of “big data” in which data is becoming increasingly abundant and detailed (e.g. micro-data about individuals and companies as well as detailed spatial information). How will these phenomena affect the way we measure the economy and how will it relate to developments in society and the environment? What key indicators will emerge from these conversations? What new data collection strategies and what policies might be applied?

The last version of the SNA was published in 2008. Given the many changes in the world it stands to reason that the major international institutes have started a revision-process. The Inter-Secretariat Working Group on National Accounts (ISWGNA), which guides this process has formed three sub-groups to discuss major areas which require further development: 1) Globalization 2) Digitalization and 3) Well-being and Sustainability. The first 2 groups are related to what is sometimes referred to as the “core”, the SNA as it is currently defined. The third group deals with the relationship between the SNA and issue that clearly go beyond current economic measurement. This subgroup on wellbeing and sustainability has identified six topics which need further illumination:

The aim of this paper is to contribute to the last issue. What broader accounting framework might conceivably capture the most important phenomena of the economy, society and environment? How does it relate to the current SNA? Could all these dimensions be captured by a coherent measurement system? Do we need to think of a new system or has enough thought been given to this field? How does the framework relate to major international initiatives such as the Sustainable Development Goals and other global initiatives? How might big-data play a role in designing and implementing this broader system? These are some of the questions that will be addressed in the next few sections.

In Section 2, the principles will be discussed which should guide the discussion of the broader framework. Section 3 provides a high-level description of the seven accounts of the broader framework to measure Wellbeing, Sustainability and Equity (WiSE). Section 3 also discusses evaluation of the developments and the key indicators which should replace GDP. In Section 4 the link between the WiSE framework to the major global initiatives, such as the SDGs and projects of the OECD, World Bank and UN are discussed. Section 5 concludes.

3.1Do not start from scratch

The work on the broader accounting framework should be informed by the decades of thinking that has already gone into this topic [28, 37]. Some of the founding fathers of modern national accounting, such as Simon Kuznets, already suggested adaptations to the system at a very early stage [5]. Others, such as Richard Stone suggested extension such as the System of Social and Demographic Accounts proposed in the early 1970s [38, 39]. Environmental Accounting took off in the early 1990 and eventually led to the adoption of the SEEA by the UN Statistical Commission in 2014. Human capital theory, which was developed in the 1960s [40], has also been integrated into national accounts frameworks [41, 42]. Natural and human capital data collection is proliferating rapidly across the globe. For example, it is expected that this year, 2020, there will be around 100 countries that have implemented one of more accounts of the SEEA.77

This is not an exhaustive list of the research and data which the broader framework should be based on. However, it makes clear that designing a broader system should not start from scratch. It is more a matter of synthesizing the empirical, statistical and scientific knowledge that it already out there. Many Nobel Prize winners, eminent scientists, prominent statisticians and institutes have thought and implemented accounts to complement or adjust the SNA. The only minor shift in mindset is to stop seeing them as individual extensions to the SNA and start viewing this as an overall framework. In other words, a “system of systems” is needed, which encompasses the environment, societal and economic systems.

3.2A framework for measurement & policy

One of the key factors that has made the SNA so successful is that it is a measurement framework which provides an empirical basis for policy (macroeconomics). The SNA-process after the second world war helped this fledgling policy science by harmonizing terminology and data at the global level. Just imagine that countries would have different national accounting conventions and terminology (as was the case in the 1930s.) In such a scenario, it would be difficult for macro-economists from different countries to discuss their findings, models or compare country performance. It seems likely that the overall body of knowledge of macroeconomics would be less advanced as it is today.

There are three separate dimensions to the macro-economic community:

The success of the macro-economic community cannot be ascribed to just one of these dimensions. The dominance of the macro-economic thinking is not due to policy applications or measurement (SNA/GDP). The community is successful because of macro-economic policy and measurement have developed together. A broader framework should therefore not just be based on measurement, but also on policy models, applications and tools.

3.3A framework without “externalities” or “satellite accounts”

The dominance of economic thinking in society has led to “the economy” being a primary focus for governments and the general public. The SNA is therefore seen as the “core” account. By implication other societal and environmental developments are peripheral, which is also reflected in some economic terminology. For example, the term “externality” refers to a cost or benefit that affects a third party who did not choose to incur that cost or benefit. These are often costs or benefits in the social and environmental domain. Again, the implication is that these externalities are peripheral, not part of the core [21]. A similar term is the “satellite account” which became commonplace during the discussion about the SNA1993. At that time, environmental issues and sustainable development were increasingly discussed and it was decided that the SNA “core” would not deal with them. Instead, the SNA1993 allowed for “satellite accounts” which use similar conventions as the SNA to create accounts for policy-relevant areas such as the environment, tourism, labor or unpaid household work/care.

One of the most successful satellite accounts is the System of Environmental and Economic Accounts (SEEA). The drafting of this handbook took from the early 1990s to 2012 and by the end of that process the SEEA practitioners no longer were comfortable with the term “satellite account”. The underlying sentiment is that this term does not do justice to the importance of the environment. The SEEA was subsequently been adopted as a global statistical standard, i.e. on an equal footing to the SNA.1010

The idea that the economy, society and environment are three systems, with many interlinkages, is common in sustainability science. The economy is part of society. And society is part of nature. All three interdependent systems have their own dynamics and scientific disciplines to help understand how they function. If there is any hierarchy to be imposed many would argue that nature and society are higher-level systems than the economy.

3.4A framework based on interdisciplinary accounting

Accounting is often associated with money. Bookkeeping is associated to money units since Lucas Pacioli formalized the financial accounting practices of the Merchants of Venice in 1494 [43]. However, an important lesson from the SEEA framework has been that other units of measurement, such as mass, can be used as accounting units. The SEEA process made clear that physical and monetary accounting are two dimensions of reality. Market transactions of goods, such as cars or food, can be accounted for in both volume as well as monetary units. The extraction of oil creates monetary revenues as well as reduction in the physical reserves of fossil fuels. However, in other cases the physical flows do not have any monetary value, such as air emissions. The bottom line as that interdisciplinary accounting implies that stock/flow accounting systems can be conceived of in many different units. Examples include:

Economics (Money)

Resources (Mass/Energy Equivalents)

Demography (People)

Climate Science (Mass)

The broader system should be based on interdisciplinary accounting in multiple units. Viewed from this perspective, a climate scientist or demographer could be considered “climate accountant’ and “population accountant” respectively. This is also the view of one of the founding fathers of the SNA, Richard Stone, said in his Nobel acceptance speech in 1984: “By organising our data in the form of accounts we can obtain a coherent picture of the stocks and flows, incomings and outgoings of whatever variables we are interested in, whether these be goods and services, human beings or natural resources, and thence proceed to analyse the system of which they form part.”1111

3.5A framework based on interdisciplinary evaluation

A core debate in Beyond-GDP has been the role of valuation, and this has often been reduced to the issue of finding a monetary value for a non-market phenomenon. For example, environmental pressures do not have a market “price” but environmental-economists have developed methods to provide empirical estimates of the gains or losses in “welfare” in monetary terms. These approaches are based on welfare economics and involve combining physical data with monetary valuation estimates. E.g. CO2 emissions and the “social cost of carbon”; time spent on unpaid household work/care and an imputed price. Similarly, the value of a statistical life, a monetized quantification of the value of a year of human life is used in health economics. An impressive body of literature has emerged with which to measure shadow prices for the environment, health and many other phenomena [44].

There are many scientists who are critical of using monetary values while others defend their use [45, 46]. This is not just an academic debate because it has also spilled over into institutional discussions. For example, the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) experienced a significant setback in its deliberations in 2019. Opponents of the term “Ecosystem Services” preferred the term “Nature’s Contribution to People”, because it was less economic and more reflective of a broader evaluation of the role of nature.1212 An IPBES group has been set up to look at valuation in a much broader fashion. At the same time, there is a discussion about whether monetary values should be measuring the welfare impacts or should be measured at “exchange values”.1313

This paper argues that the broader system should not focus on welfare-economic methods alone, but should allow for multiple perspectives on valuation. There are fields of economics, such as behavioral economics, happiness economics, neuro-economics which could provide alternative valuation perspectives. But valuation is already a viewpoint which is anthropocentric in its focus. I argue that we need a broader evaluation of the environmental, social and economic systems. For example, there are insights from natural sciences, such as planetary boundaries, that can contribute to evaluating the prospect of long-term sustainability. One of the valuable lessons of the SEEA is that an accounting system can separate the physical accounting (mass, time, people etc) from evaluation, so that it is possible to link the physical data to multiple evaluation theories.

3.6A framework with regional, national and global scopes

Official statistics are primarily associated with data at the national level. This spatial scale is logical because, in many countries, governance is most powerful at the level of the nation-state. However, there are many urgent challenges that require data at a different spatial scale. Issues such as migration, globalization and the spread of the COVID-19 pandemic have shown us how interconnected our world is and require global perspective. A prime example is economic globalization and integration of trade which accelerated from the early 1990 to the financial crisis of 2008/9. Formulating policies without addressing the role of international trade and economic conditions around the world is no longer an option [47, 48].

In the case of the environment, a global perspective is also needed. There is a need to understand the relationship between the environmental flows caused by society and the economy and how they impact global material balances and natural cycles.1414 It is also necessary to understand how consumers in one country can affect environmental pressures in other countries and how globalization is affecting these environmental “footprints”.

Figure 1.

Prevalence of “economic growth”, “sustainable development” and “climate change” in books (1950–2007). Source: Google Ngrams

At the same time there are many policy actions which require data at regional or even local levels. The system should be able to cater for additional spatial detail, where it is necessary. Again, the SEEA has gained a lot of experience, especially the Ecosystem Accounts, in translating detailed satellite/GIS data into actionable information, while maintaining its link to national accounts.

3.7A framework which generates new narratives

Measurement is not a neutral activity. What you measure becomes more visible and affects societal discourse. Nobel Prize winner Robert Shiller, in his book Narrative Economics shows that society’s narratives can have real influence on the decisions of individuals, companies and governments [49]. Narratives help to shape society. One way in which Shiller analyses narratives is by looking at the prevalence of words for long time periods. Figure 1 shows that prevalence of the words “economic growth”, “sustainable development” and “climate change” for the period 1950–2007. The figure is based on the Google Ngrams database which has an electronic repository of books starting from 1800.

The figure is indicative of the success of macro-economic community. The word “economic growth” hardly existed before 1950 and now is a common term which is known by just about everyone. In fact, it is so well known that “economic growth” and “growth” can often be used as synonyms. The term “economic” has become so successful that it is not even necessary to use it!

The other two lines in Fig. 1 show the prevalence of “climate change” and “sustainable development” which both became more prevalent in the late 1980s. In the case of climate change, this was a term that existed in the scientific literature before the 1980s but it was given a real boost when the UN started the Intergovernmental Panel on Climate Change (IPCC) in 1990. The term “sustainable development” was basically non-existent when it was coined by the Brundtland Commission in 1987. It was subsequent heavily promoted by the UN and many other international institutes, national governments, academic and others.

What does this mean for the SNA-revision? The take-away is that revising the SNA is not just an intellectual exercise. It is not just about accounting and getting the conceptual aspects right. The outcome and execution of the new SNA, and the broader system, will shape global discourse in the years to come. The impact will depend heavily on the way in which the various systems are implemented. The current situation is that SNA economic accounts are applied for all countries of the world, often every quarter with only a couple of weeks delay. There is a great deal of resources coupled to the timely, accurate and frequent output of these data.

Figure 2.

The OECD framework for the Better Life Initiative.

Currently, the extended accounts of the SNA are less frequent, less timely, and adopted in fewer countries in the world. In some cases, broader accounts might publish data with a 1–4 year delay. Unless this situation changes and more resource are available for global implementation of the broader system the current “economic” narrative will have little competition from an alternative narrative about wellbeing, sustainability and equity.

Figure 3.

WiSE accounting framework and indicators.

4.1The wellbeing-sustainability-equity (WiSE) framework

Section 3.2 argued that the success of the macro-economic community is the combination of a global policy science and measurement. The SNA is the glue that keeps it all together because it provides a global “dictionary” of the terminology underlying macro-economics. Table 2 shows that a framework for wellbeing, sustainability and equity should also tick the same boxes. There should be a policy science and measurement framework. The goal of the science should be to create policies for “sustainable development”, which has three distinct dimensions:

The split between wellbeing and sustainability was forcefully argued by the Stiglitz Commission in 2009 [34]. It has since been adopted by many initiatives such as the Better Life Initiative (OECD) framework shown in Fig. 2. However, the OECD also stresses that the measurement system should not just look at averages in a population. Inequalities in income and wealth have been growing in many countries since the 1980s [50]. The third dimensions is therefore “equity”, which is necessary to assess to what extent the distribution of all types of characteristics is “fair”. But an equitable society is not just a moral issue. There is also research which shows that more equal societies are more stable and achieve higher levels of overall wellbeing. Equity covers within-country inequalities also differences between countries. Equity and sustainability therefore tackle intergenerational and intergenerational distribution of resources and outcomes. The issue of sustainability has the additional problem of uncertainty because it concerns the future.

Together, Wellbeing, Sustainability and Equity are part of the broad definition of “sustainable development” as defined by the Brundtland report. However, making a distinction between the three helps to frame the three core dimensions of social progress.

An accounting system functions as the dictionary of terms and shows the accounting relationships between variables. This is the task of the WiSE accounts. The accounts are shown in Fig. 3 and are based on decades of research and data collection on environmental, social, demographic and other accounting frameworks. In fact, many of the systems are currently already being implemented.

The accounts adopt the SEEA-approach which separates the physical accounts from evaluation. The figure shows that there are seven accounts which record the developments in environmental, social and economic systems. These are therefore referred to as the “system accounts”.

The system accounts are generally less contentious than the subsequent step in accounting: evaluation. Various methods, from various scientific disciplines, are needed to evaluate the progress towards wellbeing, sustainability and equity. These methods lead to “evaluation indicators” which provide summary indicators that would be capable of replacing GDP as the headline indicator of society. The topic of evaluation and indicators will return after a brief description of each of the system accounts.

4.2System accounts

As Table 3 shows, the seven system accounts are based on existing accounting frameworks. At the same time these frameworks might require some conceptual adjustments or changes in scope. For example, all the accounts need to adopt a global perspective which will require adjustments to the boundaries of the accounting system. The various accounts have different accounting units which each provide a different view of the developments in the environmental, social and economic systems.

There are many overlaps between the accounts. “Hours worked” will be recorded in the time use accounts but will also exist in an economic satellite account on labor/productivity. Sometimes they provide two or more dimensions of the same flows. For example, the sale of natural gas will have a monetary and multiple physical dimensions (mass and energy). Implicitly, the prices (per kg and per Joule) is therefore also part of the accounting framework.

4.3Evaluation accounts

The seven system accounts described above provide descriptions of system dynamics and interconnections in the network. They do not however answer the crucial question: “Overall, are the developments good or bad?”. For example, are we progressing towards wellbeing and sustainability? Are the developments becoming more equitable? The data from the system accounts cannot answer these questions. They need to augmented by scientific evaluation methods.

Valuation is a subset of evaluation methods. What is the damage caused by climate change? What is leisure time worth? How should we value unpaid household work/care? One stream of economic thought, welfare economics, dominates the thinking about these questions. The welfare economic techniques that have been developed provide monetary value for many of these “non-market transactions” They can be used to estimate the value of household production, or to estimate the value of health damages caused by air pollution. Welfare economics is also the basis of green accounting aggregates such as the Genuine Progress Indicator. A special version of welfare economic is the so-called capital approach, which estimates the value of assets (such as human and natural capital) by estimating future rents. The total value is estimated by calculating the net present value of future rents using an appropriate discount rate.

Welfare economics/capital approaches provide useful information and there is ample literature and empirical research to implement this type of valuation. The prime advantage is that they provide monetary values which can be compared to economic aggregates. However, welfare economics is based on certain assumptions to approximate a market situation. The literature also has some blind spots for which it is unlikely to ever find a solution. For example, welfare economics has little to say on the monetary value of social relationships with your friends, family and spouse, while these are important to wellbeing. Establishing the monetary value of “social capital” has therefore remained elusive. Another area of criticism is the treatment of distant unpredictable events in relation to the discount rate [61]. This can cause large differences in the results, because the discounting assumptions play a major role in the empirical outcome. For example, the social cost of carbon can easily vary a factor 10 or more depending on the discount rate or model used [62]. Another example is the valuation of natural capital stocks which is calculated using information from the past which is extrapolated towards the future. Catastrophic environmental collapse is often implicitly excluded from the calculation. However, even if collapse is assumed to take place 20–50 years from now, this would make little difference in the empirical results if a high discount rate is used.

So welfare economics/capital approaches provide useful information but at the same time have caveats. Some have even argued that monetization needs to be avoided all together. This paper does not agree with this conclusion but argues that more attention needs to be given to other valuation approaches from other scientific schools. In fact, rather than only looking at valuation, which is anthropocentric concept, to evaluation which is a broader assessment of system change. Table 4 summarizes some of the other social sciences and natural sciences which provide ways of evaluating wellbeing, sustainability and equity. Many have been suggested by eminent scientists , some of whom are Nobel Prize laureates such as Amartya Sen (Capability Approach) or Daniel Kahneman (Affect Evaluation).

It is beyond this paper to discuss all the methods mentioned in Table 4. Hoekstra (2019: Chapter 10) provides a more comprehensive discussion. The bottom line is that 1) interdisciplinary evaluation assessments can illuminate developments that welfare economics/capital approach cannot 2) However, none of the approaches are perfect, each having some blind spots and other weaknesses. 3) The WiSE accounting structure is flexible so that the system accounts can be linked to multiple evaluation methods 4) Various institutional groups, such as the IPBES, are grappling with the topic of valuation and would benefit from a broader interdisciplinary perspective.

4.4Indicators to replace GDP: The Illusive search for a global tricorder

There has been a long debate about which indicators should replace GDP. Some suggest that a single index needs to be defined. The reasoning is that GDP is one indicator, so we need to strive for one single indicator as a replacement. For example, there are many environmental economists that support green accounting approaches such as the Genuine Progress Indicator or Comprehensive Wealth. However, there are also many institutes and reports (such as the Stiglitz Report) that have concluded that composite index methods based on monetization should not be adopted. It is argued that a dashboard of indicators is the only scientifically acceptable alternative as it avoids attributing weights. Indicators such as GHG emissions, educational attainment, leisure time should therefore be provided separately so that society and policy makers provide their own weights.

Few scientists would argue that there is a perfect way to weight all dimensions of societal progress. Even welfare economists would probably not argue that their method is “perfect”. It provides useful insights If there was a perfect way of weighing all the developments, then a perfect index of “success” could be formulated. This is science fiction. But is that really a problem? Let me try to argue why I think it is not a big issue by using a metaphor.

In the science fiction TV show Star Trek there was a doctor called Dr. Leonard McCoy. He had at his disposal a “tricorder”. This medical device could be pointed at an individual and, within seconds, provide a perfect diagnosis of their health. A single instrument that perfectly quantifies someone’s health status. This is clearly science fiction, because despite the enormous gains in medical science, it has not led to a single perfect instrument to diagnose patients. Instead we have many imperfect instruments which are good at certain areas of diagnosis. Some instruments, such as the thermometer or a blood pressure device, are useful to assess the current health of a patient. Other instruments such as an echograph or blood test could be used to see whether you will become ill in future due to cancer or other latent medical issues. None of these instruments are perfect because none, like a tricorder, can cover all dimensions of health. This is not as great a problem as one might think. If we consider all the information from the imperfect instruments together they generate a near-perfect diagnosis. So even if it is impossible to develop a tricorder, there is a fairly good second-best option.

What is the “health” of our planet and society, now and in the future? Do we have a “global tricorder” that can tell us instantaneously whether we are progressing towards wellbeing in a sustainable and equitable fashion? The answer is of course no. If medical science cannot produce a tricorder for one dimension (health), is it realistic that this can be done for all the environmental, social and economic dimensions all at once? As Table 4 shows there are many scientific evaluation methods which could cover specific parts of the diagnosis. Some are good at assessing the current situation (see column with “wellbeing) while others are better for assessing the future health of our planet (see “sustainability”) or the fairness in society (“equity”). Although none of these valuation instruments are perfect, together they can provide a good diagnosis of the health of our planet and society.

What is potentially dangerous is that one of these methods claims that it should be the only instrument. For example, some economists argue that welfare economics is the only route to follow. This is comparable to a doctor that turns up to your house only with a blood testing kit. There is a high probability that they will miss a crucial disease which may even lead to fatal results. Most people would choose to throw out the doctor immediately. Similarly, any claim by a scientist that there is a perfect instrument to evaluate wellbeing, sustainability and equity should be rejected. This is like claiming to have created a “global tricorder” – the realm of science fiction.

If a single index is scientifically unfeasible, what is the minimum number? In terms of communication we should strive towards the lowest possible number, while still maintaining the ability to provide good diagnosis. Again, the medical metaphor helps. Although a doctor has dozens of medical instruments, usually 2–5 instruments are enough to home in on a medical problem and come to conclusion with a reasonable degree of certainty. This would also seem to be a reasonable range for the number of indexes needed for wellbeing, sustainability and equity.

5.1Sustainable development goals

How does the WiSE framework link to the SDGs? An inventory was made to show which of the WiSE accounts corresponds to the SDG indicators which have been defined by the Inter-agency and Expert Group on SDG Indicators (IAEG-SDGs). The official list of indicators was taken of the UNSD site in March 20201616 and linked to the WiSE accounts (summarized in Table 5). The full database of SDGs indicators and WiSE accounts is provided in the supplementary material.

Note that this matching exercise is not definitive. In some cases, the SDG indicator could credibly be part of two WiSE accounts. In other cases, the SDG is equal to a ratio from two different accounts (e.g. material use (from the physical accounts) per unit of GDP (from the monetary accounts). In these cases, for the sake of this exercise, we have linked the numerator the WiSE accounting framework.

Table 5 leads to the following observations:

5.2Better life initiative (OECD)

The theoretical framework of the OECD Better Life Initiative is shown in Fig. 2. It is based on the theory of the capital approach, but it does not aggregate the various resources into a monetary aggregate. Also the indicators for current wellbeing are presented in a dashboard of indicators as prescribed by the Stiglitz report. The only aggregation that is done is on the website, where equal weighting is used or weights that are chosen by web-site visitors.

The BLI indicators are easily linked to the WiSE system accounts. I have not done a full link analysis to the WiSE framework just like the SDGs, but this would be straightforward. What might be the advantage of connecting the BLI indicators to an accounting framework? One key advantage is to identify win-win policies or trade-offs between domains, because indicators are interconnected. There are relationships between them and when policies targets one indicator they may lead to improvements or deterioration of other indicators. Having an accounting structure shows the relationship between the domains and thus adds to “policy coherence” which the OECD has stressed in the past [37, 63].

The WiSE framework could benefit from the data and methodologies that have been developed by OECD. The OECD has put a lot of effort into finding distributional data for many of the BLI indicators. They also have created the Distributional National Accounts which ensure consistency of National Accounting concepts and datasets for income and wealth inequalities. In addition, they have created a handbook on the measurement of subjective wellbeing which is one of the valuation methods discussed in the Section 4.3 [64].

5.3Changing wealth of nations (World Bank)/inclusive wealth index (UN)

There are two global initiatives that adopt a monetary capital approach: The Changing Wealth of Nations (World Bank) and the Inclusive Wealth Index (UN).1717 These projects are valuable because they collect a lot of physical stock data for a wide range of countries. Stock data is usually not as systematically collected as flows so this a valuable public good. They also have a lot of experience applying monetary valuation of the capitals across a broad range of countries. These insights should be used in the development of the broader framework.

If the WiSE framework were to be implemented, the CWON and IWI projects could build their statistics on these data. For example, the natural capital measurement would rely mostly on the Physical and Monetary Accounts. The Human Capital Accounts would be based on the demographic accounts and the Labor/Productivity Satellite of the Economic Accounts.