Statistics for Measuring Statistics for Measuring Growth Growth

and Structural Change and Structural Change

International Forum on Monitoring National Development27-29 September 2011

Beijing, PRC

Douglas H. BrooksAsian Development Bank

Traditional measures of growth and Traditional measures of growth and structural changestructural change

National income

gross domestic productgross national income

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Employment and GDP shares of industry

agriculturemanufacturing

services

But there are inherent limitations in these But there are inherent limitations in these measures measures

Growth: National income(Stiglitz and Sen 2009)

• Sustainability• Quality of products • Market development • Inequality

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Structural Change: Employment or GDP by sector share

•Factor endowments•Factor specificity•Informal sector•Competition

These limitations translate to inadequate These limitations translate to inadequate understanding of the process of structural understanding of the process of structural change and growth change and growth

• How endowments influence the optimal structure of an economy and its growth pattern

• Channels through which binding constraints affect structural change and growth

• The role of the informal sector in structural change and growth

• The role of the government in structural change and growth

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Wish list:Wish list:

• Disaggregated accounting of factors of production • Balance sheet of a country’s wealth

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Channels through which binding constraints affect structural change and growth. • Market structure information of industries• Regular firm and enterprise surveys

How endowments influence the optimal structure and growth pattern.

Wish list: Wish list:

• Regular Informality surveys (folded into LFS)• Informality by industry

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The role of the informal sector in structural change and growth

The role of the government in structural change• Addressing market failures

o Time use surveys o Addressing information asymmetry o Market structure o Policy coordination o Risk protection (insurance, safety nets)

• Active industrial policy?

Meanwhile, conventional measures can Meanwhile, conventional measures can be complemented with other existing be complemented with other existing indicators indicators

• Focus on households (Stiglitz and Sen 2009)o Wealth and disposable income o Per capita vs. median income

• Information from household surveys• Other indexes (ex. HDI)

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Inclusive Growth

Growth

•productive jobs and economic

opportunity

Governance and Institutions

Access to

education, health, and other social services

Social safety nets

The FIGI is one such effort The FIGI is one such effort

ADB’s “Framework for Inclusive Growth Indicators” presents 35 indicators of inclusive growth http://www.adb.org/Documents/Books/Key_Indicators/2011/pdf/KI2011-Special-Supplement.pdf

Other issues that can be addressed in the Other issues that can be addressed in the short term are…short term are…

• Regularity of household surveys • Expansion of existing household surveys• Institutional quality indicators

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In the medium and longer horizon…In the medium and longer horizon…

• IOs and SUTs• Balance sheet approach to the wealth of nations• Disaggregated information on factors of

production • Time use surveys

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dbrooks@adb.org