Addressing the Challenges of Globalization in National Accounts
We focus on the impact of globalization on the measurement of national accounts. The System of National Accounts (SNA) was updated in 2008. While the updated SNA clarifies concepts and improves the system’s coherence, difficulties arise when these concepts are applied to multinational enterprises that do not operate along national lines. Multinational enterprises often structure their operations and legal ownership of assets in ways that reduce their global tax liabilities or regulatory burdens. We describe the challenges national accountants face when applying the concepts of residency and economic ownership generally, and the ownership of intellectual property products in particular, to multinational enterprises. We also examine problems associated with measuring prices and volume changes, and discuss how globalization may impact financial accounts and balance sheets, and the vulnerabilities that were exposed during the 2007–2009 economic and financial crisis.
We explore ways to address these measurement challenges. Some options entail providing supplementary information while staying within the current rules of the SNA. Other options involve changes to the standards, or a fundamental rethinking of the data collection process. Under
a new data collection paradigm, countries would cooperate in collecting and sharing data on multinationals’ operations to more accurately measure their activities.
I am currently working on a part-time basis as a contractual employee of the International Monetary Fund. During the last three years, I have also been compensated by the Brookings Institution and by the World Bank for research projects. None of these organizations supported my work on this chapter, which I conducted on my own time separately from these contractual engagements.Peter van de Ven
Staff member of the Organisation for Economic Co-operation and Development (OECD), an independent international organisation located in Paris, France.