Innovative Frameworks for Emerging
Economic Challenges
Seminar on Shifting Paradigms
New York, 18 February 2011
Walter Radermacher Chief Statistician of the EU
Innovative Frameworks for Emerging
Economic Challenges
 Mandate of statistics – change of societies
 Paradigm shift?
 Conclusions
State, Citizen, Statistics
 Statistical information has always (or at least since 250
years) had its particular place in the way a society has
organised its regime, its state and its government
 Statistics represents the knowledge that is used in the
interaction between "gouvernant" and "gouverné".
 The role of statistics will change with changes in the
relationship between state and citizen, nowadays
predominantly defined by the constitutional arrangement
of institutions
 New forms ("governance") or additional governmental
layers (supra-national institutions) are emerging
Walter Radermacher
3
Globalisation: Decoupling of systems
 Lessons from financial crisis, environmental and other crises
 Limitation of solution potential for governments and politics on
national level
 Politicians are faced with expectations from voters, consumers,
employees, employers, investors, pensioners, current and future
generations etc.
 New is:
– these groups are not any longer captured by national boundaries
– the reaction time of these groups is partly very different
– cause and effect of an activity or a political measure fall apart in terms of
territory and time
 A paradox?
– Participation in political decision making can be facilitated through
modern ICT and the young generation expects these opportunities to be
used.
– Communication or even participation cross borders is a new challenge
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Trust, Trust, Trust
 Oh, people can come up with statistics to prove anything.
14% of people know that. Homer Simpson
 Do not put your faith in what statistics say until you have
carefully considered what they do not say. W. W. Watt
 The most important things cannot be measured. W. E. Deming
 Any observed statistical regularity will tend to collapse once
pressure is placed upon it for control purposes.
Charles Goodhart
 Statistical information can be used for trust building. It can
also be misused. Statisticians are the guardians of quality.
Walter Radermacher
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Paradigm shift?
What do we „sell“? Business model of Official Statistics
 Dimensions of the paradigm:
– Which products? Changes in the portfolio
– Which services? Answers to democratic societies
– Which quality? More than sound methodology
 Governance, cooperation, coordination
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Broadening the mission of Official Statistics:
from “product” to “business case”
We provide
We provide
• information
• information
• service
• high quality
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The world in one figure?
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The Economic System in Statistics:
A “flat” projection
space
stocks
investment
depreciation
flows
export
import
Walter Radermacher
time
9
The Paradigm related to Statistical Products
Main line
Gross
partner
elements
complementary
building blocks
Walter Radermacher
Domestic Product
flows
1 period
1 nation
Net
Global
Prices
outcome
Income Expenditure
depreciation BoP
labour
(produced) external trade distribution
capital
consumption
investments
Purchasing
Productivity
Power Parity
10
Review of the paradigm
Main line
Gross
partner
elements
complementary
building blocks
Walter Radermacher
Domestic Product
flows
1 period
1 nation
Net 1
Global
Prices
outcome
Income Expenditure
depreciation BoP
labour
(produced) external trade distribution
capital
consumption
investments
Purchasing
Productivity
Power Parity
11
1. Long-term effects / sustainability
 International crises ask for more information about stocks:
–
–
–
–
Produced stocks (e.g. real estate market)
Financial assets (or liabilities), public, private
Raw materials (traded on markets)
Human, natural, social capital
 Measurement problems
– Stocks beyond property rights (public/common goods), e.g.
knowledge, culture, nature
– Valuation of stocks (non-market)
 Role of Official Statistics:
– Best information for choices between short- and long-term
– No simulation of choices labelled as official statistics
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Review of the paradigm
Main line
Gross
partner
elements
complementary
building blocks
Walter Radermacher
Domestic Product
Prices
outcome
flows
1 period
1 nation
Net 1
Global 2 Income Expenditure
depreciation BoP
labour
(produced) external trade distribution
capital
consumption
investments
Purchasing
Productivity
Power Parity
13
2. Cross-border flows ≠ “external trade”
 Globalisation statistics: system-of-systems
– Comprehensive framework of
international trade, integration of
services (incl. mode of
service supply, etc.), capital flows,
foreign affiliates
– International Input-Output-Tables, value added chain analysis
cross border energy balances, carbon footprint etc.
 Measurement problems
– Mirror differences
– Confidentiality, mutual data access
– Incoherence in cultures in statistical communities
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Review of the paradigm
Main line
Gross
partner
elements
complementary
building blocks
Walter Radermacher
Domestic Product
outcome
3
Prices
flows
1 period
1 nation
Net 1
Global 2 Income Expenditure
depreciation BoP
labour
(produced) external trade distribution
capital
consumption
investments
Purchasing
Productivity
Power Parity
15
3. Services, knowledge, nature as important
elements of the production process
 Improved quality of statistics on services (incl. output of
public services)
 Integration of innovation (incl. R+D, patents etc.)
 Internalise external effects: natural inputs (incl. services
from nature) and collateral output (emissions, waste, …)
from the production process
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Review of the paradigm
Main line
Gross
partner
elements
complementary
building blocks
Walter Radermacher
Domestic Product
outcome
3
Prices
flows
1 period
1 nation
Net 1
Global 2 Income 4 Expenditure
depreciation BoP
labour
(produced) external trade distribution
capital
consumption
investments
Purchasing
Productivity
Power Parity
17
4. Distribution, non-market production
 Follow the recommendations of
Stiglitz-Sen-Fitoussi Commission
– Strengthen the income side of National Accounts
– Measure time use and set-up corresponding satellite
accounts
– New indicators for well-being and poverty
Walter Radermacher
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Review of the paradigm
Main line
Gross
partner
elements
complementary
building blocks
Walter Radermacher
Domestic Product
outcome
3
Prices
flows
1 period
1 nation
Net 1
Global 2 Income 4 Expenditure
depreciation BoP
labour
(produced) external trade distribution
capital
consumption
investments
5 Purchasing
Productivity
Power Parity
19
5. Multifactor productivity
 Provide a data-warehouse for more comprehensive
productivity analyses
–
–
–
–
–
Capital
Labour
Energy
Material
Services
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A system-of-systems
 International models:
– standards, nomenclatures, handbooks ensure comparability
– International tools (e.g. internat. Input-Output-Tables, Euro-GroupsRegister) open appropriate analysis
– International cooperation avoids unnecessary variation and redundancy
of work
 National models
– Sub-standards adapted to the national situation and request from
national users
– National tools are additive
 Sub-national models
– Disaggregation of national results along the needs of users is feasible
 Governance issues have to follow the future structure of the
system(s)
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Services provided by Official Statistical
 In order to allow a great variety of user groups around
the globe the highest degree of participation in decision
making process (political, economic, financial)
– meta-data
– accessibility of data
– comparability (international standards)
play an extremely important role
 Open spaces, open solutions
 Micro-data access for research
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Quality: statistics useable as (the) global language
 Quality-assurance (incl. the assurance of fundamental
principles)
 Quality labelling
– Official statistics
– Official statistics with quality certificate
– Experimental official statistics
 Education / statistical literacy
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Main messages
 No replacement of paradigm, but components of
paradigm receive new „weights“
– Integration of long-term impacts from short-term activities
– System-of systems-approach
– GDP&Beyond / Stiglitz-Sen-Fitoussi-recommendations
 Services around statistical products allow access from
„all sides“
 The role of official statistics as the central provider for
decision making is reinforced with a strong quality
concept
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