For Official Use
STD/NAES(2003)16
Organisation de Coopération et de Développement Economiques
Organisation for Economic Co-operation and Development
22-Sep-2003
___________________________________________________________________________________________
_____________
English - Or. English
STATISTICS DIRECTORATE
STD/NAES(2003)16
For Official Use
National Accounts and Economic Statistics
The Italian general government sector: size, boundaries, methods of classification and recent issues
Paper prepared by D. Collesi, D. Guerrucci, F. Nusperli - ISTAT
OECD National Accounts Experts Meeting
Château de la Muette, Paris
7-10 October 2003
Room 2
Beginning at 9:30 a.m. on the first day
English - Or. English
JT00149740
Document complet disponible sur OLIS dans son format d'origine
Complete document available on OLIS in its original format
STD/NAES(2003)16
TABLE OF CONTENTS
Introduction ..................................................................................................................................................3
The size of General government in Italy......................................................................................................3
General government and its subsectors as reference for public policies .....................................................6
The S.13 archive and standard issues...........................................................................................................8
The organisation of GG ...............................................................................................................................9
Introduction of ESA95 and the redefinition of the General government sector S.13 ................................11
The main sources and the database of General government sector S.13 ...................................................13
Recent public policy measures concerning the structure of General government sector: classification
issues ..........................................................................................................................................................16
The creation of Patrimonio Spa and Infrastrutture SpA ............................................................................18
The transformation of ANAS into a joint-stock company ..........................................................................19
Bibliography ..............................................................................................................................................21
2
STD/NAES(2003)16
THE ITALIAN GENERAL GOVERNMENT SECTOR: SIZE, BOUNDARIES, METHODS OF
CLASSIFICATION AND RECENT ISSUES1
Introduction
The major interest that the Maastricht Treaty and the Stability and Growth Path is gaining with the
Excessive Deficit’s Procedure, not only between academy but on the newspapers as well, puts a renewed
attention on Government more and more with passing of time. With the help of National Accounts the
statisticians trust in definitions and schemes that aim to give frameworks to use to measure the various
economic activities and put them into reciprocal relationships. This paper aims to present the Italian
situation regarding the size, the figures, the boundaries of the General government sector, the process used
to build up the database for the accounts, facing several problems connected both with classification items
of the existing situation and with new issues connected to the introduction of more of the private sector
inside Government.
This paper is mainly methodological but, to give an idea of the Italian situation, figures taken from the
National Accounts have been used. NA offer a common basis of reference for international comparisons,
given by a set of technical means of classification standards, identification on the statistical units and
transactions, and the like. The result is that GG, as an entity defined when using a statistical framework, is
not always widely accepted in a juridical contest. So the GG sector is well-defined and comparable among
countries only in the economic meaning (using concepts like economic significant price, collective and
individual consumption, production, transactions, statistical units and sectors) and is not as well defined in
public economics.
The size of General government in Italy
There are several figures that can be used to measure General government; by sceptical observers it
could be noticed that none of them is an actual one - the true size of government - but, as statisticians, we
trust in National Accounts and in the powerful conceptual structure provided to arrange a lot of
information in a comprehensive and systematic way.
Thanks to NA we can say, for instance that General government accounts, in Italy, for somewhat
more than 12.5 % of GDP (as GG value added), at least starting from 1995. As shown in figure 1 this
percentages, almost steady in the last period, had been much variable during the Eighties and the first half
of Nineties. The need to improve the public finance situation to join the European Union is highlighted in
the downward trend of GG value added ratio shown by the graph starting from 1992. In fact, being almost
at all constitutes by the compensations of employees, the share of Government in GDP decreased because
of the slow down of public expenditure. Nevertheless this is not an irrelevant percentage.
1
Paper prepared by Daniela Collesi, Deborah Guerrucci and Federico Nusperli (ISTAT).
3
STD/NAES(2003)16
Figure 1 - General government Value added (ratios to GDP)
Anyway, without other figures to explain, this is not enough to define the role and the size of
Government in the economy. Also when considering Net lending/Net borrowing, a key parameter of the
Maastricht Treaty and the connected Stability and Growth Path, we do not have an immediate result of the
role of Government unless we consider separately the two components, and their further analysis, given by
total expenditures and total revenues.
Figure 2 – General government Net borrowing (ratios to GDP)
-14.00
-12.00
-10.00
-8.00
-6.00
-4.00
-2.00
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
-
4
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
STD/NAES(2003)16
The need to join the European Union is shown in the above figure 2 where starting from 1997 the key
parameter of Net lending/Net borrowing to GDP has been respected, also recurring to some one-off
measures, such as the selling of UMTS licences in 2000, and the securizations in 2002 of the Social
security funds fixed assets.
Figure 3 – Public expenditure by its main components (ratios to GDP)
60
50
40
%
Capital EXP
30
Other current EXP
Final consumption EXP
20
10
0
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
The high level of public expenditure to GDP reached in 1993 (around 57 %) was mainly due to the
high percentage of other current expenditure (mainly interests on public debt and social benefits in cash).
The downward trend of the overall tendency in the following period has been obtained reducing interests
ratio also if there has been a reduction of the share of capital expenditure too. The final result has been a
re-composition of the main components of public expenditure in favour of the Final consumption
expenditure.
Figure 4 – Public revenue by its main components (ratios to GDP)
50
45
40
35
30
Other current revenues
%
Capital revenues
25
Social contributions
Taxes on production and imports
Current taxes on income, wealth
20
15
10
5
0
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
5
STD/NAES(2003)16
The above indicators give a right dimension of Government size, through a rough analysis by the
main components of both sides of the account. Going more in depth the ESA95 Questionnaire, with its
very detailed transmission programme, offers several instruments to better detail what GG does and the
means to finance its activities. Table 2 Main aggregates of GG gives the detail of transactions involved,
Table 9 Detailed Tax and Social Contribution Receipts by Type of Tax or Social Contribution and
Receiving Subsector provides analysis of the main Government receipts by type and subsector of General
government receiving, and Table 11 Expenditure of General government by functions gives the
expenditure analysis by main economic categories. So both the acquisition of resources and the spending
decisions are fully accounted in the detailed schemes of NA, useful to analyse the different phases of
income distribution and redistribution, also having a look at services provided by using the functional
classification of expenditures.
General government and its subsectors as reference for public policies
The Italian General government sector, according to National Accounts definition, is a broadly
accepted concept, so it is not an artificial definition as it can appear somewhere else. Public finance
documents, produced by Government at a political and technical level (DPEF, Financial Act, etc.), assume
GG as the reference sector to measure public finance objectives. So also the list that enumerates statistical
units belonging to GG sector (list S.13) is shared between Istat and the Ministry of Economy. The problem
is, on the other hand, to make this concept widely accepted and shared between public managers in that,
very often, the GG sector is quoted as reference sector without clarifying exactly its contents.
Public managers have, in general, mainly a juridical studies background so that using ESA95 as
reference is not a benchmark but, otherwise, another way to make them worried. Public managers always
keep in mind public law instead of National accounts framework, so also if ESA95 has been introduced in
Italy as in the other EU countries as a European regulation2, it still remain hard to apply also because of
some differences with the public law.
One more difficulty has added by the changing process effectively in our institutional setting,
similarly to those active in other developed economies. So given a set of services that General government
has to produce there are several ways, depending on the institutional arrangements, by which it can be
obtained. The organisational aspect, of course, goes over the statistical one but, nevertheless, is important
to catch the direction followed by Government to pursue its functions by directly engaging them, or
delegating to other institutional sectors simply maintaining the regulation activity.
Terms like privatization, outsourcing and deregulation often recur in the current debate on public
accountability but is not always simple to catch them in the sense of National accounts, without going into
a very detailed level. In the follow we will try to give a representation of the Italian situation by describing
the procedure used to determine the GG boundaries and the treatment of recent issues.
One aspect that can be appreciated by the figures is the transition that took place from the beginning
of the Eighties up to day in the provision of public services between the central level of government and
the local one. On the whole period we can note that about 6 percentage points of Final consumption
expenditure have passed from Central government to Local government.
2
This means that the ESA95 Regulation is situated at a supranational level of jurisdiction.
6
STD/NAES(2003)16
Figure 5 – GG Final consumption expenditure by subsector (millions euros)
250,000
200,000
150,000
Social Security funds
Local Government
Central Government
100,000
50,000
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
Also comparing total expenditure between the three subsectors it can be noted that the relative size of
Central government is decreasing3 in favour of Local governments (mainly for the production of services)
and Social security funds (for the increase of Social benefits in cash).
Figure 6 – GG Total expenditure by subsector (millions euros)
700, 000
600, 000
500, 000
400, 000
Soci al secur i t y f unds
Local gover nment
Cent r al gover nment
300, 000
200, 000
100, 000
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
The comparison of figures for revenues, on the other hands, confirms the same trend of expenditure,
due to the partial decentralisation of the taxation systems.
3
The strong increase in SSF expenditure since 1996 is partly due to the change in the institutional arrangements of
payments of public pensions that have passed from the previous imputed schemes, charged by the State itself, to
the actual arrangement of INPDAP (Social security fund for public employees).
7
STD/NAES(2003)16
Figure 7 – GG Total revenues by subsector (millions euros)
600,000
500,000
400,000
Social
security funds
300,000
Local
government
Central
government
200,000
100,000
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
The S.13 archive and standard issues
GG sector definition according to ESA95 has been used as the basis for defining the set of institutions
included in the Yearbook of GG sectors and the connected list of units, also defined as S.13 list. This list,
that enumerates each by each all the unit of S.13, represents an important tool for uses such as:

the customers classification into institutional sectors for the banking system (functional for the
classification of financial accounts)

the classification of transfers performed by government units by beneficiary sector that should be used
when analysing flows to build the economic accounts.
The importance of the second item is particularly high considering that the balancing item of GG
economic accounts, represented by net lending/net borrowing, is a fundamental parameter for the
Maastricht Treaty. So the strong attention given to the counterpart sector, when classifying flows, is
essential in the determination of the accounts balancing items.
Regarding this issue it must be recognised that one of the major effort in compiling the accounts is
constituted by the standardisation of sources that is relevant not only on the economic side (for which the
wide diffusion of S.13 list is welcomed) but on the functional as well (on this side the adoption of COFOG
framework would provide a unique reference).
A special effort towards standardisation has been made for the Central government subsector as
regards the compilation of data for the state. The economic-functional breakdown of the state budget
applying until 19984 was highly compatible with the NA classification. However, one of the main areas of
4
This breakdown applies throughout the period of the statistics discussed here and was established by the law
reforming the state accounting system, known as the Curti Act No 62/1964. It seeks to elucidate the budget's
interrelationships and effects on the outside world, i.e. the link between the transactions recorded and the national
economy, adopting an approach typical of the national accounts whereby transactions are classified according to
the phase of the income cycle to which they relate.
8
STD/NAES(2003)16
work was concerned with failure to update the codification of the budget chapters, functional discrepancies
between the two classifications and the need for reclassification in defining the economic headings.
The most recent law revising the state budget5 provided that the economic and functional
classifications should be in virtually complete conformity with the NA criteria for the GG accounts: these
classifications were therefore completely recast6. The functional classification was used in the state budget
from the 1999 financial year and the economic classification from the year 2000. The new functional
classification, which is fully integrated with the COFOG, was taken over in the budget as the classification
of the functions/purposes at the first three levels, with a fourth level for more detailed analysis being
specified by the various ministries.
For the Regions, as for the state, it was decided that the whole system of classifications should be
reviewed. Legislative Decree No 76 of 28 March 2000 laid down the principle that the classifications used
to draw up Regions budgets should also be in conformity with the NA criteria. Up to now there exists a
proposal that substantially follows ESA95 definition, both on the economic and the functional side,
descending from a working group participated by the Ministry of Economy, Istat and representatives of the
Regions. The final approval or revision is still waiting decisions descending from the modification of the
Italian constitution toward federalism (Reform of the Titolo V of the Constitution) also if it has often been
recalled that whatever reform shouldn’t allow each Region to introduce its own standard of accounting
principle of public bodies monitored. This need of standardisation has been, furthermore, recalled also in
the proposal of reform of Financial Law that, more than the existing scheme, goes toward the adoption of
NA framework.
The organisation of GG
General government has the three7 level subsector structure defined by ESA95. A great effort was
done for the introduction of ESA95 in the Italian NA and the GG sector was, probably, one of the deeply
investigated. In the following paragraphs a full documentation will be provided, both for the methodology
and the database implementation.
In the contest of the subsectors of ESA95:
S.1311
S.1313
S.1314
Central government
Local government
Social security funds
5
Act No 94 of 3 April 1997.
6
The Treasury set up a working party to revise these state budget classifications and representatives of ISTAT’s
National Accounts Directorate participated as experts and in a coordinating role.
7
In the Italian contest it doesn’t exist, at least up to now, the fourth subsector defined by ESA95 as State
government
9
STD/NAES(2003)16
The following groups of units are defined:
Table 1: GENERAL GOVERNMENT SECTOR (S.13)
Code
A
B
C
D
E
F
G
H
I
L
M
N
O
P
Q
R
S
T
U
V
Z
X
Y
W
J
K
Type of institutional unit
MINISTERI E PRESIDENZA DEL CONSIGLIO
ORGANI COSTITUZIONALI E DI RILIEVO COSTITUZIONALE
ENTI DI REGOLAZIONE DELL'ATTIVITA' ECONOMICA
ENTI PRODUTTORI DI SERVIZI ECONOMICI
AUTORITA' AMMINISTRATIVE INDIPENDENTI
ENTI A STRUTTURA ASSOCIATIVA
ENTI PRODUTTORI DI SERVIZI CULTURALI
ALTRI ENTI
ENTI ED ISTITUZIONI DI RICERCA NON STRUMENTALE
ISTITUTI E STAZIONI SPERIMENTALI PER LA RICERCA
REGIONI E PROVINCE AUTONOME
PROVINCE
COMUNI
ASL
ENTI E AZIENDE OSPEDALIERE
CAMERE DI COMMERCIO
ENTI PER IL TURISMO
ENTI PORTUALI
COMUNITA' MONTANE
ENTI REGIONALI DI SVILUPPO
UNIVERSITA' ED ISTITUTI DI ISTRUZIONE UNIVERSITARIA
ENTI PER IL DIRITTO ALLO STUDIO
ENTI AUTONOMI LIRICI ED ISTITUZIONI CONCERTISTICHE
ASSIMILATE
ENTI PARCO
ENTI REGIONALI PER LA RICERCA E PER L'AMBIENTE
ENTI NAZIONALI DI PREVIDENZA E ASSISTENZA SOCIALE
Subsector
Central government
Central government
Central government
Central government
Central government
Central government
Central government
Central government
Central government
Central government
Local government
Local government
Local government
Local government
Local government
Local government
Local government
Local government
Local government
Local government
Local government
Local government
Local government
Local government
Local government
Social security funds
Units coded as A, mainly the Ministries, have the tasks of performing and addressing the institutional
activities of the sector, and not only to produce output. Some of the activities are delegated to other bodies
that act at the central level such as those coded as E - that has the tasks of controls and regulations of
certain areas of economic activities such as telecommunications, electricity, gas -, those coded as G –
producers of recreational and cultural services – those coded as L – working in the field of research at the
national level.
At the local level act numerous units grouped according a criteria similar to that of the Central
governments. So we have the 20 Regions and the 2 Autonomous Provinces whose competencies are
similar to that of the State at the local level, also if they are mainly devoted at the coordination of the other
bodies that operate in the their areas, instead of being engaged in the production of services. Also at a local
level act Provinces and Municipalities that are mainly involved in the production of services, redistribution
activities and in the formation of fixed capital. Other bodies at local level are producers of health services
(Q group), education services (X and Z group), cultural services (Y group), economic services (R, S, T
groups) and environmental services (W and partly J groups).
10
STD/NAES(2003)16
The following table, taken from the General government Yearbook for year 1999, presents by type the
numbers of institutional units for each class and the distribution of employees among the classes.
Table 2 General government by number of institutional units and employees
Institutional units
Type of institutional units by subsector
%
Central Government
Ministeri e Presidenza del Consiglio
Organi costituzionali di rilievo costituzionale
Enti di regolazione dell’attività economica
Enti produttori di servizi economici
Autorità amministrative indipendenti
Enti a struttura associativa
Enti produttori di servizi culturali
Enti produttori di servizi socio-sanitari
Enti ed istituzioni di ricerca
Istituti e Stazioni sperimentali per la ricerca
Local Government
Regioni e Province autonome
Province
Comuni
Aziende sanitarie locali
Enti ed Aziende ospedaliere
Camere di commercio
Enti per il turismo
Enti portuali
Comunità montane
Enti regionali di sviluppo
Enti parco
Enti per il diritto allo studio
Enti lirici ed istituzioni concertistiche
Università ed istituti di istruzione universitaria
Enti regionali ricerca e ambiente
Social Security Funds
Enti nazionali previdenza e assistenza sociale
TOTAL
196
19
7
6
13
6
5
60
2
36
42
9.352
22
100
8.103
197
123
102
120
20
355
15
19
58
13
73
32
25
25
9.573
Percentage distribution
of employees
%
2,0
0,2
0,1
0,1
0,1
0,1
0,1
0,6
…
0,4
0,4
97,7
0,2
1,0
84,6
2,1
1,3
1,1
1,3
0,2
3,7
0,2
0,2
0,6
0,1
0,8
0,3
0,3
0,3
100,0
53,7
52,1
0,2
…
0,3
…
…
0,1
0,1
0,6
0,1
44,6
2,9
1,9
15,4
13,1
7,0
0,3
0,1
…
0,2
0,1
…
0,1
0,1
3,3
0,1
1,7
1,7
100,0
Introduction of ESA95 and the redefinition of the General government sector S.13
The introduction of the ESA95 in the Italian NA has been a long process started in 1996 that passed
trough the need of redefining the sector of the General government (GG). It was necessary to check the
public bodies inserted in the public sector according to ESA79 to confirm, or not, their inclusion in the
sector according to ESA95. The main differences of the classification principles concern the 50% criterion
and the definition of the social security funds. The redefinition of the sector according to the new system
11
STD/NAES(2003)16
ESA95 has involved the exclusion8 of some bodies. The main transaction involved by this exclusion have
been the market output (for the application of the 50% criterion), the interest receivable, the social
contributions (for the different treatment of the pension funds, included in the sector according to ESA79
and excluded according to ESA95), the production costs (intermediate consumption and compensation of
employees) and the social benefits (for the part paid by pension funds).
-
The redefinition of the sector S.13 has concerned the checking of:
the 50% criterion;
the control by GG sector;
the financing by GG sector;
for social security funds: control on management of the institution and compulsory participation for
certain group of population.
The application of the 50% criterion determines the question on the nature of the output of the
institution (market or non market output); it is measured whether the receipts from productions accounts
for more or less than 50 per cent of total production costs. The GG unit is a non-market producers whose
output is intended for individual and collective consumption. The second step is represented by the control;
control is defined as the authority to decide the general policy or strategy of an institutional unit, if
necessary by appointing directors or managers. Possession of the majority of shares in a company is a
sufficient, but not necessary condition for exercising such control. Besides, the issue on the financing is
determinant; the activities of a GG unit are mainly financed by compulsory payments made by units
belonging to other sectors or by transfers by other GG units. For the description of the procedure an
algorithm has been designed presented in Figure 8 as the Decisional tree for the classification of
institutional units.
The institutions included in the sector S.13 are characterised according two different criteria:

The nature of “institutional unit”, defined “an elementary economic decision-making centre
characterised by uniformity of behaviour, decision-making autonomy in the exercise of its principal
function, keeping of a complete set of accounts (or possibility to compile a complete set of accounts if
required)” (Reg. CEE n. 696/1993);

The institutional classification:
1.
according to a juridical approach, an institution is public if the Italian legislation defines the unit
“public” because it has a public purpose;
2.
according to an economic approach, an institution is included in the GG sector if it satisfies the
ESA95 rules (ESA95 par 2.68 and 2.69)
Thus, we can have two groups:
1.
the public institution sector;
2.
the GG sector (S.13).
The sectors are only partially the same. In fact, some units which are public for the public law aren’t
included in S.13 (for example: ACI and the units IACP, because of their principal activity is market; the
CONSOB, Bank of Italy, Isvap, because their principal activity is the regulation of the financial sector).
8
The impact of this process has been negative in term of the value of flows of expenditure and receipts. It has been
calculated that for 1998 figures according ESA95 has been something around 4000 million of euros both the
resources and the uses side less than the corresponding according to ESA79 (see Malizia (2000)) .
12
STD/NAES(2003)16
Besides, some units which are private for the public law are included in S.13 (for example: pension funds
for independent professional organized as a social security system for which the participation is
compulsory by law).
After the revision of the year 1996, the list of the units of the GG sector S.13 (summarized on Table
1) is periodically updated according to a standard procedure. The updating is necessary to include new
bodies, to follow eventual juridical or economic transformations of the units, and to check the satisfaction
of the ESA95 criterions over time.
At the same time, if the updating process involves news items in the list, the collection data procedure
is initialized. If it’s necessary the implementation of a new survey, it is possible to have data for the
compilation of NA within a two years delay. If it is necessary the acquisition of a new administrative
archive, it is possible to have data within a few months.
The main sources and the database of General government sector S.13
The available sources on GG sector are integrated in order to construct a database. These sources
contain data on balance sheets and data on employment.
The following table outlines the sources used for each type of body falling within the GG sector
(S.13). These may be statistical surveys or administrative sources. The following list refers to the sources
used both for the production account and for the full economic account of sector S.13.
Table 3 General government: sources used for the compilation of the accounts
STATISTICAL SURVEYS
Body observed
Source
ASL and AO9
Ministry of health
Social security funds
ISTAT
Regions
ISTAT
Municipalities
ISTAT
Ministry of Interior
Municipalities
Ministry of Interior
Provinces
Chambers of commerce
ISTAT
APT10
ISTAT
EDISU11
ISTAT
Universities
ISTAT
Other bodies
ISTAT
ADMINISTRATIVE SOURCES
Body observed
Source
Ministry of Economy
Social security funds
Ministry of Economy
State
Ministry of Economy
State sector
Ministry of Economy
State receipts
Ministry of Economy
Regions
Ministry of Economy
Regions' receipts
Ministry of Economy
Municipalities
Ministry of Economy
Municipalities' receipts
Ministry of Economy
Provinces
Ministry of Economy
Provinces' receipts
Chambers of commerce Ministry of Economy
Ministry of Economy
Mountain communities
Ministry of Economy
Universities
Ministry of Economy
Other bodies
Generally, the statistical sources allow to have a good level of disaggregation useful to the
implementation of the ESA95 classification for the operations and of the COFOG classification for the
expenditure. A good level of disaggregation ensures to reach a good level of standardization of the
procedure useful to elaborate the basic data according to the rule of ESA95. Thus it is possible to attribute
9
ASL = Aziende Sanitarie Locali (local health boards) - AO = Aziende Ospedaliere (hospital boards)
10
APT = Aziende di promozione turistica (tourist boards)
11
EDISU = Enti per il diritto allo studio (students' welfare offices)
13
STD/NAES(2003)16
a ESA95 operation’s code and a COFOG class code to each basic record derived by the source. If the level
of disaggregation is good, it isn’t necessary to split the basic aggregates according to particular hypothesis.
In general the statistical surveys are available with a delay of two years; data for the year t-1 are
available in year t+1. The administrative sources have a different timeliness; they are available with a delay
of 1 year, but they offer a low level of disaggregation and sometimes it is necessary to make particular
elaboration for the application of the ESA95 rules about the time of recording.
The Italian NA has organized an integrated system of basic sources for the public sector; different
sources are linked to organize the wealth of information in a comprehensive and systematic way. When
two different sources are available, these are treated according to the ESA95 principles and compared; if
the sources are coherent in term of time of recording, these are integrated for the application of the
classification COFOG and NACE. For example, a source can provide the total level of an operation, and
another coherent source can provide a disaggregation by type; their integration allows to estimate
economic aggregates according to ESA95. Besides an integrate system of coherent basic sources allows to
use different sources for the estimates for different years according the timeliness of each source. An
example may be useful to illustrate how the sources are linked. For the regions, the statistical source
(Regional authority budgets) is used to estimate the account up to the year t-1, whereas the estimate for the
year t is based on the administrative sources (Receipts and payments account of the regional authorities
and Tax receipts of the regions), both from the Ministry of Economy. For the municipalities, the statistical
sources (Survey of the final accounts certificates of the municipal authorities), produced by the Ministry of
the Interior, is used for the year t-2, and ISTAT's survey (Rapid survey of municipal budgets) for t-1, while
the estimates for year t are based on the administrative sources (Receipts and payments account of the
municipal authorities and Tax receipts of the municipalities) which again are produced by the Ministry of
Economy.
In practice, a highly disaggregated database was constructed from the available sources in order to the
implementation of ESA95. The new method greatly improved the quality and detail of the estimates12. It
involved building new registers of basic information in which the main statistical reference unit is the
institutional unit as defined in ESA95. Besides, the level of detail at which information is recorded in the
new datasets allows to distinguish the market and non market activities.
The new approach not only distinguishes between institutional units and units of homogeneous
production but also allows each institutional unit to be divided into units of homogeneous production,
which represent the finest level of detail for producer units. In the previous system, the two domains
(branches and institutions) remained separate and could be linked only a posterior. An important result of
the new approach is that the macroeconomic variables can be constructed from micro-level information,
i.e. a single corpus of basic data can be used for the various purposes of analysis, maintaining coherence
and consistency of the estimates.
This approach has been implemented thanks to the exhaustiveness of the records, which cover the
entire universe of units. This is possible since the information on GG derives from administrative sources
or exhaustive surveys and not from sample surveys.
12
Cf. Coli, Cuicchio, Riccioni, Sera (1998).
14
STD/NAES(2003)16
The micro-database provides basic information on the various institutions, some quantitative and
some relating to other features of the units, which can be reaggregated by government subsectors:
1.
value of NA economic transactions according to COFOG classification;
2.
non-monetary variables such as geographical area, number of local units and legal form;
3.
information on employment, such as the number of employees by economic activity according to
ATECO classification13.
The COFOG functional classification is used to analyse the monetary data and the ATECO
classification for the employment data. Each COFOG class must be linked to one or more ATECO
categories so that economic transactions can be analysed by branch. Linkage between functions and
activities was established by comparing the definitions used in the two classifications. This enabled us to
construct a COFOG-ATECO bridge matrix14, which was used to allocate the amounts classified by the
COFOG classes to one or more ATECO categories. Very briefly, for each institutional unit, the procedure
for applying the method allocates each monetary transaction classified as falling within a COFOG class to
the corresponding ATECO categories, on the basis of the number of workers for each function (COFOG
class) and activity (ATECO category). The procedure also provides separate estimates of market and nonmarket output for economic transactions by ATECO category. This allows to assign different functions of
production to the market and non-market activities encompassed within a given COFOG class. In order to
distinguish market and non-market economic transactions, the same distinction must be made for the
employment data. The estimation thus generates an intermediate outcome with a three-way classification,
which yields the workforce distribution by ATECO category and COFOG class, with a further breakdown
into market and non-market production.
Thus, it is possible to estimate the aggregates by branch useful to construct the NA input-output table.
13
ATECO is the Italian classification of the economic activities and corresponds to Nace rev. 1.
14
The classifications were matched at their lowest level, i.e. the third level of COFOG (classes) and the fifth level of
ATECO (categories).
15
STD/NAES(2003)16
Figure 8 - Classification of the institutional units: decisional tree
Institutional unit
NO
S14 Households
(consumers)
Is it productive?
YES
NO
S14 Households (producers) or
S11 Non financial corporations or
S12 Financial corporations or
S15 Non profit institutions or
serving households
Is it controlled by GG units?
YES
NO
S11 Non financial corporations or
S12 Financial corporations
Is it a non market unit?
(50% criterion)
YES
Is it a non profit institutions
serving households?
NO
S13 General Government
YES
YES
Is it mainly financed
by GG units?
NO
S15 Non profit institutions
serving households
Recent public policy measures concerning the structure of General government sector: classification
issues
The necessity of unequivocal rules and transparent methodologies for the sector classification of the
public institutional units is assuming increasing importance across the European Union as in several
countries policy measures have been undertaken in order to achieve a higher efficiency in some public
services through the creation of new institutions and/or the restructuring of already existing ones.
16
STD/NAES(2003)16
The different kinds of measures that have been carried out in recent years may be summarised as
follows:
a)
creation of new units with specific tasks, classified inside General government sector (S.13), in order
to get, through the entrustment to a specialised unit, an increase of efficiency;
b)
restructuring of existing General government units, not implying their reclassification outside the
sector S.13;
c)
creation of new public units to be classified outside sector S.13;
d)
restructuring of existing General government units implying their reclassification outside sector S.13;
e)
transfer of competencies from General government institutions to private units.
It is evident that, beyond a probable recovery of effectiveness in the production of public services, all
the above described measures may produce a positive effect on public finance aggregates.
Such effect may derive from the better return of the transformed activities if they remain under the
responsibility of General government units, or from the transfer of non performing activities outside S.13
accounts if these are now assigned to units that are classified outside the sector.
The definition of the proper treatment in NA requires a very attentive analysis especially because the
recent operations often have very specific features so that the correct application of the classification rules
is not so straightforward.
The measures under items a) e b) may raise minor problems as the account books of the new or
restructured units should allow to single out the effects, in terms of lower costs or higher proceeds,
deriving from a more effective management.
As to measures under items c) and d), that provide for the classification of units out of the sector S.13,
a specific attention must be devoted to the features of such institutions and to their relations with the
General government bodies that established their creation or restructuring. The effective transfer of
responsibilities must be closely checked.
The measures under item e) must be carefully analysed because the assumption of competencies,
formerly under the responsibility of General government, may transform the nature of the private unit so
that a reclassification inside S.13 may be necessary. This happened in Austria when the Government
undertook a sale and leaseback operation of the public real estate with a unit classified into the corporation
sector. The nature of the unit significantly changed, especially in terms of decision making autonomy, so
that it had to be reclassified inside the General government sector.
It is then clear that the correct application of the rules of classification established by ESA95 is, if
possible, becoming more relevant. National accountants have to distinguish the measures that are actually
carried out with the aim of increasing the efficiency of some public services, especially when they provide
for their transfer to the corporation sector, from those aiming to the bare window dressing of the public
accounts, in which responsibilities are only formally transferred to the new/restructured units.
The main elements that must be taken into account in order to faithfully reproduce the economic
reality beyond the formal features of the operations are the following:
a)
the degree of public control over the new or restructured institutions, mainly in terms of their actual
decision-making autonomy,
17
STD/NAES(2003)16
b)
the characteristics of their activity and of the transactions in which they are involved, with particular
reference to those carried out on behalf of General government and/or with General government units,
c)
the possible assumption by the General government of some risks borne by the new or restructured
institutions.
Through the analysis of these topics the effective transfer of the competencies outside the General
government can be checked. The impact on National Accounts may be the re-routing of some transactions
carried out by the new unit through the General government accounts or the reclassification of the unit
itself.
The Italian Government recently adopted some measures of this kind. The methodological issues
raised by the creation of two joint-stock public companies, Patrimonio SpA (having the aim of improving
the public assets management) and Infrastrutture SpA (in charge of enhancing the start up of
infrastructural works in Italy) and by the restructuring process which ANAS, the institution in charge of
managing the public roads in Italy, is currently undergoing, may represent a meaningful example of the
questions recently faced by ISTAT.
The creation of Patrimonio Spa and Infrastrutture SpA
On June 2002 a State law established the creation of two joint-stock companies, Patrimonio dello
Stato SpA e Infrastrutture SpA. Both were 100% public owned: Patrimonio SpA directly by the State,
Infrastrutture SpA by the Cassa Depositi e Prestiti.
The law stated that the objective of Patrimonio SpA would have been the increase of value, the
management and, in some cases, the sale of the assets included in the State balance sheet (buildings and
other structures, land, concessions and other property rights).
Infrastrutture SpA, according to the law, was given the aim of enhancing the construction of
infrastructures and public works either setting favourable conditions for their funding by private investors
or directly financing them (but never with a majority share of the funding).
Up to now the two companies have not fully started their activity. Due to the complexity of their role
more than one year has been necessary to better define their competencies and their interrelation with other
public bodies operating in the same sector. The boards of directors have been appointed, the strategic
guidelines for the activity of the two companies have been fixed by the shareholders and the first projects
have been detected and started up.
The two companies have not undertaken significant transactions yet, but in the short term, before the
end of 2003, both will be operational and involved in very relevant operations.
Patrimonio SpA, after having signed an agreement with the State Agency Agenzia del Demanio, in
which the role of the two bodies and the co-operation between them is specified (the Agency will be the
actual manager of the assets, Patrimonio Spa being a sort of advisor in charge of finding the better
solutions for increasing their value), is now starting up a programme for the increase of value of disused
public non residential buildings (prisons and barracks, above all), while pilot projects with some
municipalities, always in the field of public real estate management, have been launched. In some cases
these projects provide for the creation of other companies, jointly participated by Patrimonio SpA and
private investors, such as real estate advisors or big construction companies (the sector classification of
such companies is a further methodological issue).
18
STD/NAES(2003)16
Moreover, Patrimonio Spa is going to create a real estate fund, with public and private contributions.
At present the public buildings that will be assigned to the fund, whose value could add up to 1 billion of
euro, have not been detected yet.
The first task of Infrastrutture Spa will be the financing of TAV SpA, the Project Company of the
Ferrovie dello Stato Group responsible for the construction of the Italian High-Speed Railway lines.
Infrastrutture SpA will issue bonds for a relevant amount (24,7 billions of euro in the next six years): the
receipts of the issuance will be transferred to TAV that will repay its debt with the income deriving from
the tolls possibly supplemented by a State additional contribution.
This operation will not be the typical one performed by Infrastrutture SpA since it will usually issue
bonds backed by its capital (more than 3 billions of euro that will be gradually injected in the next years by
the shareholder, Cassa Depositi e Prestiti). This kind of operations, which will probably start before the end
of 2003, does not provide for any, even theoretical, State intervention.
According to the available information ISTAT has decided to classify Infrastrutture SpA in the S.12
sector, as a Financial Intermediary (subsector S.123), and Patrimonio SpA in the S.13 sector, as a Central
Government Institution (subsector S.1311).
The ratio of this decision is the following:
a)
The two companies are public producers as they are fully controlled by General government units (at
least at the moment of their creation);
b)
The main activity of Infrastrutture SpA is financial intermediation, since it collects resources on the
market and channels them to private units placing itself at risk (ESA95, §2.32-2.38). In this case
ESA95 states that it must be classified in the Financial Corporation sector irrespective of its costs and
revenues (ESA95 Manual on government deficit and debt, §I.1.3);
c)
Patrimonio Spa has to be classified according the result of ESA95 50% rule. At present, considering
that production costs include the Consumption of fixed capital that are very relevant, because of the
relevant value of the assets that have been transferred to the company, the classification into General
government sector is the most suitable.
Since they did not actually start their activity yet, the two companies have been classified on the basis
of the operating plans. The actual implementation of such plans will obviously be carefully monitored by
ISTAT in the next future in order to single out any possible deviation.
The transformation of ANAS into a joint-stock company
The Italian Financial Act for 2003 established that ANAS, the public body in charge for the
management of the public roads, was transformed into a joint-stock company.
The change of status implied the compilation of an industrial plan for the following years that has
been recently approved.
According to the plan the main changes in ANAS activity will be:
a)
a different risk exposure as the State guarantee on ANAS liabilities will be removed;
b)
the transfer of the roads’ ownership from the State to ANAS;
c)
the necessity to operate in a competition market, together with other private and public operators in
the field of road management and of transportation in general;
19
STD/NAES(2003)16
d)
the need to increase the return of the activity both improving the efficiency of the core business and
diversifying the sources of income by enlarging its field of activity to other forms of business.
More in detail, it has been announced that:
-
-
tolls will be introduced in some of the roads managed by ANAS, that are currently free of charge,
any income deriving from the use of the roads (concessions for advertising on the roads, royalties for
petrol stations, fees for the laying of telecommunication cables along the roads, etc.) will be fixed
according to market criteria,
services will be furnished to companies operating in the transportation and infrastructure sector.
According to the plan the receipts from market activities, currently negligible, will increase up to 250
millions of euro in 2005.
In some recent documents on public finance the Ministry of Economy and Finance has classified
ANAS outside the General government sector, on the basis of its change of legal status. This
reclassification implied a reduction of the expenditure for non financial transactions of 2,5 billions in 2003,
due to the exclusion of ANAS Gross fixed capital formation and to the transformation of most of the
capital transfers by the State to ANAS into a financial transaction (a capital injection to the new joint stock
company), classified “below the line”.
In NA the classification of an institutional unit must not be based only on its legal form. In the case of
ANAS the relevant criterion fixed by the System of NA is the above recalled “50% rule”.
Compared to the expected revenues, the production costs borne by ANAS currently calculated in NA
are significant: this is mostly due to Consumption of fixed capital (coded K.1 in ESA95) that ISTAT
calculates according to the Perpetual Inventory Method. This method estimates K.1 on the basis of the time
series of Gross fixed capital formation: due to ANAS significant investment activity, Consumption of fixed
capital represents the main component of the production costs.
The foreseen pattern of receipts seems at present not sufficient to induce a reclassification in the near
future. This will be possible only when the 50% threshold will actually be exceeded with a strong
likelihood that it will regularly happen in the future.
20
STD/NAES(2003)16
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