Appendix 3 The global statistical system and economic statistics

Nikki Shearman

A3.1 Introduction

The “global statistical system” (GSS) is a loose term that incorporates the international bodies and national authorities that have an interest in statistics. Its origins are bound up with the development of official statistics in the twentieth century; particularly after the Second World War, when there was growing realisation that we needed to harmonise methodologies.

National economies are inherently inter-related and have become more so over time. It is important that statistics and the methodologies that underlie them are broadly comparable, so that differences do not occur just because alternative methodologies were used by different countries.

Helping promote such harmonisation is one of the main activities of the GSS, but it has other important functions:

  1. Setting the framework. It defines standards and values within which official statistics are compiled around the world.
  2. Spreading best practice. Approaches that have worked well in some countries can be identified and made available for use elsewhere.

The main components of the GSS are:

We will describe the main role and impact of each of these bodies. There are other international bodies that have an interest in statistics in particular areas, for example, the World Health Organization, or the Farming and Agriculture Organization.

There are also bodies such as the International Statistical Institute (ISI), an umbrella body for statistical societies such as the Royal Statistical Society (RSS), and the International Association for Official Statistics (IAOS). These play a key role in defining and maintaining statistical standards, and in proposing and disseminating best practice.

A3.2 The United Nations (UN)

The UN can be considered as the historical centre of the GSS. At the time when the need for international statistical coordination was becoming apparent, the UN was the only international body capable of coordinating this satisfactorily, building on and developing a role that the League of Nations had begun. Most of the other institutions that are part of the GSS today had not been created.

Formally, membership of the UN – in practice, almost every country in the world – carries an obligation for member countries to observe agreed statistical standards and principles. These are stated explicitly in the UN Fundamental Principles of Official Statistics. Most of the other organisations’ codes of practice (or similar) are based upon the Principles. The main decision-making body for the UN’s statistical work is the UN Statistical Commission (UNSC). Its decisions are ratified by member states’ governments through the Economic and Social Council (ECOSOC) and the General Assembly.

The UN Fundamental Principles of Official Statistics

System of National Accounts 2008

System of Economic-Environmental Accounting

At a more granular level, one of the UN’s most important statistical exercises is to oversee the maintenance and updating of the periodic System of National Accounts, which codifies in detail the guidance to member states on compiling their national accounts. The current version, SNA2008, was published in 2008, as its name suggests, replacing the previous version from 1993, and runs to 600 pages. The draft of the new version was produced by the rather lengthily titled Inter-Secretariat Working Group on National Accounts (ISWGNA), a body set up by the UNSC with a membership of the UN Statistical Department, the IMF, the Statistics Office of the European Commission (Eurostat) and the World Bank.

To fulfil its task, the ISWGNA organised a years-long structured process of expert discussion to identify outstanding problems with the existing guidance and emerging new issues, and to build a consensus, so far as possible, as to how they should be dealt with in the new version of the SNA.

Since it was ratified in 2008, of course, new issues have emerged and preparations are underway for a new version of the SNA, expected to be formulated and adopted at some time in the 2020s.

A key parallel activity has related to the System of Environmental-Economic Accounts (SEEA) (see Chapter 11 on Natural Capital). Just as the SNA is essentially a manual for the construction of national accounts, the SEEA gives corresponding guidance for the compilation of natural capital accounts. The most recent version of the SEEA was adopted in March 2021. A critical feature is that the SEEA and the SNA are mutually consistent, setting the basis for economic accounting in the future that is richer than has been traditionally possible. Alongside this, the UN Statistical Department has developed an application on the Artificial Intelligence for the Environment and Sustainability (ARIES) platform to serve as a toolkit that countries can use to generate natural capital accounts.

More recently, the UN Statistics Commission has been asked by the UN General Assembly to work in support of the implementation and monitoring of the 2030 Agenda for Sustainable Development and the Cape Town Global Action Plan for Sustainable Development Data. These, and the Sustainable Development Goals (SDGs) that are integral to them, are key priorities for most UN countries, the UK included. UNSC work in this area includes establishing the indicator framework, and methodologies for monitoring them. It is now working on how national statistical systems will monitor progress on the SDGs and report this at the global level. Many of the SDGs are closely related to developments in natural capital. So the parallel work on the SEEA should pay heavy dividends.

A3.2.1 Conference of European Statisticians (CES)

The UN is broken down regionally into several organisations, which broadly match the continents. The CES is organised by the UN’s Economic Commission for Europe (UNECE). Notwithstanding its name, participation extends from all European countries to all ex-Soviet countries, North America, Australasia, and other interested countries such as South Korea.

The CES vision and activity is directed by its Bureau. The main activities of the CES are to endorse guidelines, recommendations and standards developed by networks of experts that UNECE has brought together, to address major issues facing economic statistics.

A3.3 The Organisation for Economic Cooperation and Development (OECD)

The UK is one of 37 member states of the OECD, representing developed world countries that are deemed to have high standards of governance, including in statistics.

Statistical work in the OECD aims to support its goal of promoting policies to improve the economic and social well-being of people around the world, and is guided by its Committee on Statistics and Statistical Policy (CSSP). A key benefit of OECD membership is the dedication of OECD resources to developing methodological responses to specific statistical issues, such as measuring well-being, green growth, and global value chains. The OECD has deep expertise in the field of national accounting and is a key member of the ISWGNA.

OECD member data

OECD Net ODA statistics

The OECD Development Assistance Committee (DAC) also sets the standards for, and publishes statistics on, spending on Official Development Assistance (ODA).

The OECD also disseminates statistics on its member states, usually drawn from existing national sources. Membership also obliges countries to respond to data requests that support the overall policy agenda agreed by member governments.

A3.4 European Union Statistical Systems

The European Union has two statistical systems, created by treaties setting up the Union. In most of the GSS, most decisions and guidance are largely consensual and observed voluntarily. For example, despite its importance, adherence to the SNA is not mandatory. In the EU, by contrast, much of the guidance is in the form of regulations and directives to which member states are legally obliged to adhere.

There is a good reason for this: the EU needs comparable statistics to underpin its budgetary processes. While it was a member of the EU, the UK was accordingly similarly bound to observe these requirements. The UK has now left the EU, but as part of the transition agreement, has agreed to continue to be bound by these legal requirements till the end of 2024.

A3.4.1 The European Statistical System (ESS)

The ESS is a partnership between the statistical offices of EU member states, the statistical systems of the EFTA countries and the Statistical Office of the Commission (Eurostat). Its primary purpose is to cooperate in the development of EU statistical laws and other agreed policies of joint action. The ESS is governed by a Committee (ESSC), chaired by Eurostat, and attended by the heads of the national statistical institutions of the member states.

The most prominent example of legally binding guidance is the European System of Accounts (ESA). The current version, ESA2010, was developed alongside SNA2008 and gives details on how member states should compile their national accounts. (As a result, it runs to nearly 700 pages). ESA2010 replaced ESA1995.

It is intended to be consistent with SNA2008, though there are a few significant – and regrettable – differences. Adherence to ESA2010 is a requirement of EU law. Eurostat organises a programme of surveillance to ensure member states’ methodologies adherence to the guidance. Where deviations are identified, member states are legally required to rectify these.

European System of Accounts

Manual on Government Deficit and Debt

Other important regulations govern the compilation of farming, social and business statistics. These regulations all came into force by the end of 2019.

A further area relates to public finance statistics. These are at the heart of much EU business, for example, the Stability and Growth Pact relating to fiscal policy. Accordingly, Eurostat publishes detailed guidance on the recording of public finance transactions in the Manual on Government Deficit and Debt (MGDD). The speed of financial innovation has meant that this guidance has needed to be updated frequently. The 2019 edition replaces one issued in 2016. Like ESA2010, the MGDD is legally enforced. Eurostat has a rolling programme of country examinations to ensure their methodologies and practices adhere to MGDD requirements.

One of the key activities of national statistical offices such as the ONS is to make decisions on classification. This includes issues such as whether a body is primarily a public sector or private sector one. With often complex commercial arrangements involving both public and private partners, these decisions are not straightforward and can have a significant impact on public finance statistics. National statistical offices are obliged by EU law to base their decisions on the MGDD, with Eurostat having the right to alter national decisions not deemed to be in accordance with it.

A3.4.2 European System of Central Banks Statistical System (ESCBS)

In most EU countries, compilation of balance of payments statistics, and financial and monetary statistics, is the responsibility of the central bank. The UK is unusual: since the 1980s, ONS has had responsibility for these areas with the Bank of England being formally responsible only for compilation of banking statistics. The ESCBS plays a similar role to the ESS in these areas.

The formal governing body of the ESCBS is the Statistics Committee (STC). This is chaired by the European Central Bank with members from each member state central bank. In the UK during its EU membership, this was the Bank of England.

The STC has played an important role in the international guidance about compiling balance of payments accounts (see section A3.5). It has also been a driving force for the production of financial statistics from microdata and other big data sources. The ESCBS’s‘s AnaCredit project to take this agenda forward has been an invaluable model for the UK’s own Enhanced Financial Accounts project. (See chapter 5 on Financial Wealth.)

A3.4.3 Committee on Monetary, Financial and Balance of Payments Statistics (CMFB)

Because there are two statistical systems within the EU, the CMFB needs to coordinate their activities. It was set up by, and reports to, the European Council of Ministers. The European Statistical Forum, with senior members from both the national statistical offices and from the central banks, is jointly chaired by Eurostat and the ECB and seeks to advise the CMFB on priority topics for the CMFB work programme.

A3.5 The International Monetary Fund (IMF)

The IMF provides assistance to member countries in banking statistics, balance of payments, government finance statistics, national accounts and prices. In these areas it also produces and implements standards for data dissemination and assesses data quality and statistical capacity.

Balance of Payments and International Investment Position Manual, sixth edition (BPM6)

A particularly important function is the organisation and maintenance of the Balance of Payments Manual (BPM), which mirrors the SNA to provide guidance on the compilation of trade and balance of payments statistics. The current version, BPM6, was published in 2008. It was produced by the IMF’s Balance of Payments Committee, which has expert members from national statistical agencies, central banks and the international bodies discussed earlier. A new version of the BPM is expected at the same time as the next SNA.

A3.6 The World Bank

World Bank Open Data

The World Bank offers technical assistance and financial support for statistical development to its member states. It also publishes internationally comparable statistics on prices, income and poverty. The focus is on developing countries, and it therefore has a key role in promoting and facilitating production of high quality and comparable development statistics. It has a similar function in the production of reliable and comparable statistics on poverty.

A3.7 The International Labour Office (ILO)

International Standard Classification of Occupations

ILOSTAT labour market statistics

ONS Resource

Standard Occupational Classification 2020

The ILO is, strictly speaking, an agency of the UN, although it predates the UN by a quarter of a century. It has a particular role in maintaining and periodically updating the International Standard Classification of Occupations (ISCO). This is a rigorous and comprehensive way to attribute economic activities to particular occupations. In the UK, the ISCO gives the basis for the Standard Occupational Classification (SOC) which is invaluable in much economic and social analysis. A new version of the UK SOC was published in 2020, replacing an earlier classification system from 2010.

The ILO also compiles and disseminates labour market statistics relating to its member countries, as well as organising work to improve the quality of labour market statistics.