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Hidden in Plain Sight: Unpaid Household Services and the Politics of GDP Measurement

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Gross domestic product (GDP) is one of the world’s most influential and widely cited economic indicators. However, outside of the industrialised, market-based context in which the indicator was first designed, GDP measurement suffers from a number of biases and blind spots. The article zooms in on one of these: the exclusion of unpaid household services from the production boundary of the System of National Accounts, the international standard underpinning GDP methodology. While GDP has expanded over time to include activities as diverse as financial services and the informal sector, the treatment of unpaid household services has remained unchanged. Why is this? I find that staff in the statistical departments of international organisations such the United Nations, International Monetary Fund and World Bank have a tremendous degree of agency in the governance of GDP. While these statisticians are aware of and engage with criticisms, they reject the inclusion of unpaid household services based on shared professional norms and economic ideas.
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New Political Economy
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Hidden in Plain Sight: Unpaid Household Services
and the Politics of GDP Measurement
Daniel DeRock
To cite this article: Daniel DeRock (2019): Hidden in Plain Sight: Unpaid Household Services and
the Politics of GDP Measurement, New Political Economy
To link to this article: https://doi.org/10.1080/13563467.2019.1680964
© 2019 The Author(s). Published by Informa
UK Limited, trading as Taylor & Francis
Group
Published online: 24 Oct 2019.
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Hidden in Plain Sight: Unpaid Household Services and the Politics
of GDP Measurement
Daniel DeRock
Department of Political Science, University of Amsterdam, Amsterdam, Netherlands
ABSTRACT
Gross domestic product (GDP) is one of the worlds most inuential and
widely cited economic indicators. However, outside of the industrialised,
market-based context in which the indicator was rst designed, GDP
measurement suers from a number of biases and blind spots. The
article zooms in on one of these: the exclusion of unpaid household
services from the production boundary of the System of National
Accounts, the international standard underpinning GDP methodology.
While GDP has expanded over time to include activities as diverse as
nancial services and the informal sector, the treatment of unpaid
household services has remained unchanged. Why is this? I nd that
stain the statistical departments of international organisations such
the United Nations, International Monetary Fund and World Bank have a
tremendous degree of agency in the governance of GDP. While these
statisticians are aware of and engage with criticisms, they reject the
inclusion of unpaid household services based on shared professional
norms and economic ideas.
KEYWORDS
International standards;
international organisations;
gender; expertise; unpaid
work
Introduction
Few numbers are as ubiquitous in political and economic analysis as gross domestic product (GDP).
This powerful indicator is enlisted to rank and compare national economies, it inuences lending
and investment decisions, and is often taken as a proxy for well-being (Stiglitz et al.2009).
Because they are produced by governments and based on internationally harmonised guidelines,
GDP and other economic indicators appear to be objective and unbiased. But statistical concepts
originally designed for industrialised market economies do not travel seamlessly to other kinds
of socioeconomic settings for example, low-income areas with high levels of subsistence and
informal activity.
The result is that certain economic activities are captured while others are rendered invisible in
GDP gures (Morgan 2009, Mügge 2019). One topic in particular has been a thorn in the side of econ-
omic statistics for decades: the measurement of unpaid household services
1
(or unpaid services, for
conciseness). These services largely overlap with care work and domestic labour and are dispropor-
tionately performed by women. While GDP has expanded over time to include other forms of unpaid
work such as subsistence agriculture, the exclusion of unpaid household services has only become
more concrete in international statistical standards. This exclusion has persisted alongside consider-
able contestation and deliberation among economists, statisticians and feminist scholars. What
explains the persistent exclusion of unpaid household services from GDP?
© 2019 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group
This is an Open Access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives License (http://
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original work is properly cited, and is not altered, transformed, or built upon in any way.
CONTACT Daniel DeRock d.j.derock@uva.nl
NEW POLITICAL ECONOMY
https://doi.org/10.1080/13563467.2019.1680964
Two competing perspectives have dominated debates about this exclusion. One is rooted in fem-
inist and, to some extent, postcolonial critiques of the microeconomic theories underlying GDP
methodology. The other is the pragmatic and seemingly depoliticised perspective advanced by stat-
isticians themselves. Feminist scholars have demonstrated that the exclusion of unpaid household
services from ocial statistics introduces a major bias into economic analysis and policy (Benería
1992, Waring 1999,2003). The implicit argument is that this oversight is a result of institutionalised
gender bias. Economic statisticians, on the other hand, contend that this kind of work is dicult to
quantify and falls outside of the market dynamics that GDP gures should capture. Thus, including
these activities would compromise the reliability and cross-national comparability of GDP. The inter-
national political economy (IPE) literature has paid little attention to these debates (cf. Hoskyns and
Rai 2007). Yet IPE approaches are well suited to address two key characteristics of GDP that have
largely been ignored: the global governance of GDP measurement and the agency of the experts
who shape it.
This article demonstrates that economic statisticians, specically those working as stain the stat-
istical departments of international organisations such as the International Monetary Fund (IMF) and
the United Nations (UN), have a high degree of agency to determine the concepts and method-
ologies underlying GDP. Contrary to what would be anticipated by interest-based approaches, the
preferences of member states, and of any other external actors, have little impact on the governance
of GDP. Rather, the authority that statisticians derive from their positions as specialised experts leaves
them largely immune from formal constraints. Rather than ignoring the problem, statisticians are well
aware of criticisms but reject the inclusion of unpaid services on the basis of shared ideas about the
limits of the economyand the policy applications of ocial statistics.
These conclusions are based on an extensive literature review, ocial reports and minutes of
meetings, and in-depth interviews. 29 interviews (some with multiple participants, for a total of 36
interviewees) were conducted between 2017 and 2019 with current and former staand directors
of statistical agencies including the IMF, World Bank, United Nations Statistics Division, UN ESCAP,
private development consultants, and national statistical oces in Laos, Thailand, and Ghana. Docu-
ment analysis focuses on the two most relevant international bodies, namely the United Nations Stat-
istical Commission and the Intersecretariat Working Group on National Accounts. The latter is
composed of experts from the IMF, World Bank, United Nations, OECD and the European
Commission.
There are two main contributions. First, the article adds historical and institutional context to
ongoing debates about the limitations of GDP (Fioramonti 2013, Philipsen 2015, Masood 2016,
Pilling 2018). On the whole, scholars have taken aim at GDP without recognising how and by
whom it is governed. By taking the criticisms seriously but taking a step back from the debates, I
show why there is a gap between aspirations (of critics and advocates alike) and actual outcomes.
This approach takes up Mügges(2016, p. 422) call to study indicators as powerful, institutionalised
ideas. Second, the ndings contribute to the wider IPE literature, particularly constructivist perspec-
tives on IO behaviour (e.g. Barnett and Finnemore 2004, Vetterlein 2014, Enns 2015, Broad 2006) and
expert-centred theoretical approaches (e.g. Sending 2015, Seabrooke and Tsingou 2016, Leander and
Waever 2018, Dersnah 2019,Kunz et al.2019).
The article proceeds with a review of literature on the politics of GDP, unpaid work and plausible
theoretical approaches. The third section describes the global governance of GDP measurement and
explains why it is largely insulated from formal constraints. The main body is an empirical analysis of
the GDP revision process. This section rst demonstrates the resistance of economic statisticians to
the inclusion of unpaid household services in the GDP production boundary, and then closely ana-
lyses expert deliberation in the revision process leading up to the 1993 System of National Accounts.
This revision process, which spanned approximately ten years, was a decisive period for the treat-
ment of unpaid services. A fth section concludes and discusses the limits and possibilities of funda-
mental changes to GDP measurement in the future.
2D. DEROCK
GDP Through the Looking-Glass: Debates and Theoretical Approaches
Contested Perspectives on Unpaid Work and GDP
The measurement of GDP has come under increased academic scrutiny in recent years. Several
authors have argued that GDP is a misguided and potentially harmful benchmark for policymaking
(Fioramonti 2013, Philipsen 2015, Hoekstra 2019), while others have argued that it is simply too
narrow of a measurement from which to draw any conclusions about the well-being of societies (Sti-
glitz et al.2009, Coyle 2014). Yet others have echoed these criticisms and shed light on the historical
rise of GDP from a little-known statistic to, arguably, the worlds most powerful number (Lepenies
2016, Masood 2016, Schmelzer 2016). The criticisms span a wide range of issues, from environmental
depletion to the impact of free digital services on well-being.
Another cluster of literature focuses on one crucial aspect of GDP measurement, namely the pro-
duction boundary a conceptual line drawn between economic and non-economic activity. As Coyle
(2017, p. 7) describes it, the production boundary distinguishes paid-for activities in the market
economy from unpaid activities, which are considered outside the productive sector. In GDP,
what is dened as economic activity is, literally, anything deemed to sit inside a designated pro-
duction boundary”’ (Christophers 2011, p. 115). With some notable exceptions such as the inclusion
of nancial services (Christophers 2011,2013), the production boundary has been one of the most
consistent features of GDP methodology (Bos 2009, p. 40). This is certainly true for unpaid household
services, which have been excluded for as long as GDP has been in existence. This continuity should
not be mistaken for a lack of controversy. On the contrary, the measurement of unpaid work has long
been a contentious issue in debates about national accounting, both among economic statisticians as
well as in academia and social movements.
The category of unpaid household services corresponds to own-account servicesin the terminol-
ogy of the SNA. We might think of many of these services alternatively as housework, care work, or
domestic labour. This includes activities such as childcare, cleaning, cooking and care for the sick and
elderly. Hoskyns and Rai (2007, p. 297) maintain that [w]ithout unpaid services and their depletion
being measured and valued, predictions are likely to be faulty, models inaccurate and development
policies awed. Folbre (2014, p. i130) attributes the lack of eort to measure unpaid services to biases
in mainstream economic theory, which in turn shaped the assumptions embedded in national cen-
suses and income accounts. Since unpaid household services are disproportionately carried out by
women (International Labour Organization 2016), failing to measure them introduces a gender bias
into economic data and analysis (Waring 1999, Elson 2005, Miranda 2011, Folbre 2014). The problem
is particularly acute in developing countries, where the overall amount of time spent on unpaid ser-
vices is higher (International Labour Organization 2016, p. 20).
According to the International Labour Organization (2018, p. 43), based on time-use data from
various years for 64 countries, women spend an estimated three times longer than men per day in
unpaid care work. The amount of time spent by women on unpaid care work varies from a
maximum of 5 h and 45 min (Iraq) to a low of 2 h and 48 min (Taiwan) with a median of 4 h and
29 min (Austria and Germany) (ibid.). Typically, as countries industrialise, a large part of household
production shifts to the market (Miranda 2011, p. 6). This shift from non-market to market ‘…trans-
lates into a rise in income as measured by income and production aggregates and gives a false
impression of an improvement in living standards(ibid.). A classic example of this phenomenon,
which has been variously attributed to several late economists, is that marrying ones (ostensibly
female) cook or housekeeper would lead to a reduction in GDP (Lequiller and Blades 2014, p. 121).
This is the case even if, as a wife, her household activities might not have changed or might even
have increased(Benería 1992, p. 1548).
Moreover, the categories of globally harmonised ocial statistics such as formal versus informal,
or productive versus unproductive often make little sense in local contexts that do not resemble
developed market economies. Waring (2003, p. 36) demonstrates this point with an example:
NEW POLITICAL ECONOMY 3
The woman goes to collect water. She uses some to wash dishes from the family evening meal (unproductive
work) and the pots in which she previously cooked a little food for sale (informal work). Next, she goes to the
nearby grove to collect bark for dye for materials to be woven for sale (informal work), which she mixes with
half a bucket of water (informal work). She also collects some roots and leaves to make a herbal medicine for
her child (inactivity). She will also collect some dry wood to build the re to boil the water to make both
the medicine and the dye (active and inactive labour). All this time she will carry the baby on her back (inactive
work).
These concerns are nothing new. In fact, they were matters of fundamental concern among early
debates over national accounting principles. Reid (1934, p. v), more than eighty years ago, warned
that a singular focus on that part of our economic system which is organised on a price basishad
blinded economists to productive work of the household, our most important economic institution.
Pigou (1920, p. 11), in contrast, argued that national accounts should only include those things that
can be brought directly or indirectly into relation with the measuring rod of money. In the postwar
period during which national income accounting rose to prominence, some economists argued that
it would be impossible to meaningfully compare the economies of industrialised and non-industrial-
ised countries (Dominguez 1947, Frankel 1953).
One of the most prominent issues in these debates was a distinction between the so-called
money economy(Ady 1962, p. 52), which can be relatively easily captured in statistics, and more
elusive non-monetary or non-market activity (Kuznets 1949, Frankel 1953, pp. 1656, Rao 1953,
pp. 17987, Samuels 1962, p. 170). This countability bias(Mügge 2019, pp. 912) still persists in
that goods and services with monetary values (or for which values can easily be imputed) are
more readily quantied. Kuznets (1949, p. 206) widely considered the founding intellectual of
GDP insisted in 1949 that applying the statistical conventions designed for industrialised countries
to non-industrialised countries would lead to unacceptable distortions (ibid., p. 211). He argued that
if national income is to be merely a measure of goods exchanged for money, an estimate had
better not be attempted for pre-industrial countries at all(ibid.).
Although the status of unpaid household services in GDP has remained unchanged, the issue has
not been ignored entirely. The Social and Gender Statistics section of the UN Statistics Division, for
example, has taken a leading role in designing and implementing time-use surveys. Between 2005
and 2015, 75 countries collected time-use statistics through a time-use survey or have included a
time-use module in a multipurpose household survey(United Nations 2015, p. 88). The increased rec-
ognition of unpaid household services and time poverty(Bardasi and Wodon 2010) is due in large
part to decades of research, theorising and advocacy by feminist economists in response to dominant
microeconomic theories about the household and labour markets (e.g. Goetz 1997, Folbre 2009,
2014). Importantly, there is by no means a consensus among feminist scholars that inclusion in
GDP is the most desirable way forward for measuring unpaid household services. Esquivel (2011),
for example, argues that an overemphasis on the GDP production boundary may be in fact be hin-
dering progress on time-use surveys and other forms of data collection for gender-sensitive policy.
Theorising Change and Continuity in GDP Measurement
The exclusion of unpaid household services is important to understand in its own right. As a case
study, it also adds to a broader understanding of the origins and governance of global statistical stan-
dards. The most relevant actors are international organisations (IOs) such as the World Bank, IMF, and
UN, as well as expert groups comprised of staof these IOs. Two strands of literature in particular
illuminate how GDP methodology has been shaped by these actors over time. The rst is a path-
dependency approach that emphasises institutional change or continuity in statistical standards.
The other is a constructivist approach that highlights the role of expertise in global governance.
Considering the question from a path-dependency angle highlights the potential for change or
continuity in global statistical standards. Hall and Taylor (1996, pp. 93940) distinguish two broad ten-
dencies within historical institutionalism: a calculus approach and a cultural approach. The calculus
4D. DEROCK
approach assumes that actors adhere to institutions because deviation would lead to worse out-
comes than adherence (ibid.). A cultural approach emphasises the taken-for-granted nature of
some institutions, which allows them to avoid scrutiny (ibid.). In other words, Institutions are resistant
to redesign ultimately because they structure the very choices about reform that an individual is likely
to make(ibid.). This is consistent with Hays(2006, p. 65) description of ideational path-dependency,
in which it is not just institutions, but the very ideas on which they are predicated and which inform
their design and development, that exert constraints on political autonomy. The focus on shared
ideas and norms of statisticians moves the analysis from the relatively rigid assumptions of historical
institutionalism (e.g. Mahoney 2000) to a more agent-centred constructivist institutionalism (Hay
2006,2016; see also Schmidt 2008,2010 on discursive institutionalism).
Constructivist and expert-centred approaches direct attention to questions of ideas, agency and
global governance. Several constructivist studies of IOs (Barnett and Finnemore 2004, Vetterlein 2014,
Enns 2015, Broad 2006) demonstrate that IOs are not unitary actors with xed interests. Rather, indi-
vidual staand departments shape IO behaviour (Momani 2007, Ban 2015, Kentikelenis and Seab-
rooke 2017, Reinold 2017). Statisticians have received little attention as agents within IOs. The
statistical departments of IOs are best understood as analytic institutions(Broome and Seabrooke
2012). These are the specialist units, departments, committees, adjudicatory bodies and others
housed by or linked to IOs that develop the cognitive framework for understanding and solving
policy problems(ibid.). Analytic institutions dier from epistemic communities (Haas 1992)inat
least one important respect: they are not free-oating or autonomous , but institutions
endowed with analytical capacities for a programmatic purpose(ibid., p. 4).
Experts can gain leverage, and even moral authority, from their specialised knowledge and experi-
ence (Davis, Kingsbury and Merry 2012, Tsingou 2015, Seabrooke and Tsingou 2016, Seabrooke and
Wigan 2016, Ban and Patenaude 2018). Expert knowledge endows IOs with authority over issue areas
and allows them to dominate the framing of issues, such as the World Bank on hunger (Sridhar 2007)
and poverty (Vetterlein 2012). Enlisting the help of external experts can also enable mission creep
into new areas of governance (Littoz-Monnet 2017). Expertise and knowledge are sources of
power largely because they are perceived as technical, and thus non-political (Haas 1992). But this
perception obscures the deeply political nature of expertise in governance (Sending 2015, Leander
and Waever, 2018, Dersnah 2019, Kunz et al.2019). As Desrosières (2000) pointed out, the profession
of ocial statistics is at one and the same time, scienticdirected at the production of knowledge
and social directed at the production of a common language as a foundation for debate on social
issues(ibid., p. 173). The choices made by experts have distributive consequences and are inspired by
normative orientations, even if these are not made explicit.
Knowledge is crucial in the constitution of objects in international politics, including the economy
itself (Allan 2018). The emergence of the economy as a distinct object, separate from the social and
natural world, owes a great deal to the emergence of statistical indicators (Mitchell 2002,2005,
Breslau 2003). In Breslaus(2003, p. 380) words, No one has ever seen the economy or touched it
except through statistical reports and the conceptual armature of macroeconomics. Polanyi (2016,
p. 400) proposed a similar ontology of economic statistics in the 1922 article Socialist Accounting
(Sozialistische Rechnungslegung):
History in fact directly points to the inverse relationship of dependence between accounting and economic
theory: accounting is historically not a practical application of economic theory; on the contrary, economic
theory developed historically through the interpretation, analysis, and systematizing of accounting concepts.
The ambition of statisticians to remain objective in their work does not imply ignorance of the social
implications. Ocial statistics are valuable public goods and there is nothing inherently malicious
about them. Ideally, at the domestic level, national statistical systems are independent from
central governments in order to prevent manipulation. In this light, the goal of objectivity is laudable.
With that said, the potential danger of depoliticisation is that it can mask uneven power relations. By
framing problems and solutions as politically neutral, technocratic actors camouage the
NEW POLITICAL ECONOMY 5
antagonisms and structural inequalities inherent in development issues (Telleria 2017, Petiteville
2018, Rajão and Duarte 2018). Ideas originating from the Global South, including inuential ideas
related to human development and sustainable development, are deeply inuenced by the local con-
texts and origins of the actors who advocate for them (Acharya 2016). Governance arrangements that
remain insulated from ideas originating from a Southern context might ignore local particularities
such as structures of work, care and production that dier from those in highly developed countries.
The theoretical approach followed in the analysis below draws from the constructivist institution-
alism and expertise literatures as a basis for explaining non-change in the production boundary.
Expertise endows statisticians with a high level of autonomy. Yet, the agency of economic statis-
ticians is not distributed equally those employed by or associated with IOs such as the World
Bank and IMF, or with experience working in European and North American bureaucracies, have
the most inuence. This claim is supported in the following section. The unique governance structure
has allowed for a relatively undisturbed path-dependency. In the absence of strong constraints and
explicit demands from member states or IO executives, the most important explanatory factor is the
consistency over time of ideas about the measurement of unpaid household services.
The Global Governors of GDP
Much of the intellectual groundwork of modern national accounting was laid in the period following
World War I (Studenski 1958, Kendrick 1970). Gross National Product (GNP), the predecessor to GDP,
rst emerged in a small number of industrialised countries in the 1930s and 1940s and attracted the
attention of policymakers in part through its role in economic planning during the Second World War
(Kendrick 1970). Since then, GDP has become a global institution. Although GDP grabs the most
attention, it is only one of many indicators derived from the System of National Accounts (SNA).
The SNA is an internationally harmonised set of recommendations on how to compile measures
of economic activity in accordance with strict accounting conventions based on economic principles
(ISWGNA 2008, p. 1). In other words, it is a framework for measuring the total economic activity of a
country.
The SNA was rst published in 1953, followed by revisions in 1968, 1993, and 2008, with a new
revision currently in progress. The length and detail of the SNA has grown substantially over time.
Since the disappearance of alternative national accounting systems in post-communist states, it is
now the only internationally accepted standard (Herrera 2010, p. 18). The development and revision
of the SNA is now carried out by an intersecretariat working group composed of statisticians from ve
international organisations. Prior to the 1980s, it was carried out by one of these, the United Nations
Statistical Oce (UNSO, later renamed the United Nations Statistics Division, UNSD).
The UNSO (now UNSD) was formed at the Nuclear Session of the UN Statistical Commission in
1946 (Ward 2004a, pp. 378). It emerged out of the League of Nations, and was created in large
part to establish harmonised economic statistics in support of Marshall Plan reconstruction (ibid.,
pp. 439). One of the earliest projects of the newly formed Statistical Commission carried out
chiey by the UNSO was to draft the rst version of the SNA (ibid.). At that time, there were only
46 UN member states, most of which were industrialised countries (ibid., p. 6). Over the following
decades, the number of member states increased along with the wave of independence and deco-
lonisation in the 1960s. It became more dicult to balance dierent policy aims in the international
statistical system (ibid.). Nonetheless, GDP quickly gained a solid foothold in development policy
(Speich 2008, pp. 1421). According to Ward (2004a, p. 7), in the early decades of the UN and the
Bretton Woods Institutions, an emerging consensus soon began to drive the development
debate. The concept of full employment was a central goal of all industrial countries and was
written into the mandates of the UN, IMF and World Bank. For the developed industrial countries,
this objective was viewed as synonymous with poverty reduction, and it accounts for the statistical
preoccupation with GNP, growth, and the national accounts(ibid.).
6D. DEROCK
Since the early 1980s, responsibility for the SNA has been shared between ve international
agencies in the Intersecretariat Working Group on National Accounts (ISWGNA). The participating
agencies are the UNSD, the IMF, the World Bank, the Organisation for Economic Cooperation and
Development (OECD) and Eurostat. The ISWGNA was established in part because the costs were
becoming too high for the UN alone (Interview with Chief of UNSD Economic Statistics Branch,
New York, 2019). The ISWGNA and its members are overseen by the United Nations Statistical Com-
mission, the apex entity of the international community of ocial statistics(ibid.). Despite the impor-
tance of collaboration between the ve IOs, the SNA is still widely seen as a UN initiative. This is due to
the proximity of UNSD to the Statistical Commission and the fact that the SNA was long referred to as
the UN System of National Accounts (ibid.).
The ISWGNA is responsible, among other things, for bureaucratic tasks such as planning meetings
and deciding who will attend. The meetings, which include a rotating group of country experts in
addition to ISWGNA members, are referred to as Expert Group meetings. However, the country
experts present at Expert Group meetings have less inuence over the content of the SNA than
the permanent members for several reasons. For one thing, many of the background documents
that are considered during meetings are written by members of the ISWGNA. These members
have more time to write these documents compared to country experts, who are typically in
charge of national accounts in their own countries (Interview with former ISWGNA member, Edin-
burgh, 2017). Another reason for this imbalance has to do with language and training.
Theres a bit of a problem, in that eorts are made to make sure its regionally diverse. And so youre trying to
include people from Asia, from Africa, from Latin America. That can sometimes be problematic on two counts.
The rst thing is whether someone would have the same depth of knowledge as some of the others. And
there can be a bit of a problem about language. All of this is done in English. And the people who go to meetings
in OECD and Eurostat, whether theyre English mother tongue or not, are used to working in that sort of environ-
ment. If you have somebody from [another region], they are not quite as comfortable working in English as
others. So, for both of those reasons, it tends to be the developed countries in the ISWGNA that tend to dom-
inate the discussions. Not exclusively, but to some extent that happens. (ibid.)
The ease of communication for statisticians comfortable with the working language, and the privilege
given to a specic body of knowledge namely, the national accounting practices that originated in
the US and UK and evolved in close connection to the UN system contribute to an uneven distri-
bution of inuence. Expert Group meetings do indeed include regionally diverse country experts, and
statisticians from developing countries are by no means excluded from these meetings, nor from the
international statistical system more broadly. Yet, the permanent members of the ISWGNA and those
with experience in European and North American bureaucracies and international organisations do
have more agency in the SNA revision process. According to a former ISWGNA member, It is largely,
not exclusively, but largely up to the UN, the World Bank and the IMF to speak up for developing
countries, to the extent they dont speak up for themselves(Interview with former ISWGNA
member, Edinburgh, 2017).
There are very few formal constraints on the ISWGNA. The most straightforward constraint is the
mandate of the Statistical Commission, which was not enforced until after the 1993 SNA. After the
1993 revision, which took longer and resulted in much more substantial change than initially
planned (Ward 2004b), the Statistical Commission increased its oversight. Now the ISWGNA submits
a list of priority issues to the Commission prior to the start of the revision. Once agreed upon, the
ISWGNA is mandated to deal only with these issues (Interview with current ISWGNA member,
New York, 2019). In the SNA revision process, ISWGNA members work collectively toward producing
an updated manual, not as representatives of the missions of their respective organisations. According
to a former ISWGNA member, any instances of conict stemmed from personal convictions rather than
pressure to act on behalf of international organisations. For instance, in both the 1993 and 2008 revi-
sions, a representative of Eurostat the organisation with the most funding of the ve pressured the
other members into accepting a change in the SNA by threatening to not approve the nal version
(Interview with former ISWGNA member, Edinburgh, 2017). In this example,
NEW POLITICAL ECONOMY 7
Its not that theres somebody in Brussels leaning on them to say something. Its basically they want to rule the
statistical world –‘we think its good, therefore its good for everybody else. (ibid.)
Nor do the statistical departments of the constituent IOs face any prohibitive external constraints
from member states or other actors. According to a former acting director of UNSD, Apart from
having to comply with all the millions of UN rules, we were pretty independent in our work. Ive
never noticed any political pressure of any kind. I mean they were just not interfering in contents
of handbooks or publications apart from the regular editing process of course(Interview with
former Acting Director of UNSD, Amsterdam, 2017). In this environment of expertise-based auton-
omy, the ISWGNA has a high degree of latitude to make or at the very least submit to the Statistical
Commission for approval changes to GDP methodology as its members see t. The following
section traces the choices they made in the 1993 revision with respect to unpaid services.
Ideational Path Dependency in the SNA Production Boundary
Between publications of the SNA, the ISWGNA takes up the complex job of revising the international
standards. Out of the three ocial revisions, the revision process of the 1993 SNA was the period
during which unpaid household services was most prominently on the agenda. The topic was not
discussed at all in the 2008 revision, and the relevant sections of the 1993 and 2008 SNA manuals
are nearly identical. During the revision, which began in 1982 (Vanoli 2005, p. 104), the production
boundary was discussed several times in both Expert Group meetings and within the UN Statistical
Commission. Ultimately, changes were made to the production boundary. Yet, the changes that were
made had the eect of reinforcing the exclusion of unpaid household services while including other
activities. The 1993 SNA made these exclusions explicit for the rst time, formally cementing this his-
torical idea into the international standards.
This section highlights the choices made with regard to unpaid services and the justications for
these choices given by the ISWGNA. Throughout the process, the problem is clearly recognised by
statisticians but changes are rejected. The rst part of the section demonstrates the reluctance of
national accountants to include unpaid household services in the production boundary. The
second part is an analysis of ocial reports from the 1993 revision process with a focus on the argu-
ments made for the exclusion. These arguments, which ultimately rely upon historical precedent,
reect an undisturbed part-dependency made possible by the autonomy of the ISWGNA (and the
UNSO before that).
Outside the Market, Out of Mind: Expert Views on Unpaid Household Services
The 1993 SNA states that the reluctance of the ISWGNA to include unpaid household services in the
SNA production boundary is explained by a combination of factors: the isolation of these activities
from markets, the diculty of estimating monetary values, and adverse eects on the usefulness
of the accounts for policy purposes and the analysis of markets and market disequilibria(ISWGNA
1993, p. 149). A former ISWGNA member echoed these concerns about valuation, comparability
and isolation from markets:
It is an issue that is very topical at the moment. But its actually been there for decades, lurking around. On the
whole and by and large, most national accountants say, we recognise that unpaid housework is really important,
but my lord itsdicult to put a value on it. And if we put a value on it, and we added it into GDP, how would you
know whether youre doing it consistently over time or making comparisons across countries? Its okay to do it,
but could you do it a little bit apart from the main national accounts? (Interview with former ISWGNA member,
Edinburgh, 2017)
Not all economic statisticians and data users agree on whether or not GDP should be expanded to
include unpaid services. Data users who are interested in national accounts data for administrative
purposes tend to prefer a more narrow production boundary for the sake of maximising reliability
8D. DEROCK
and comparability. Those who use the data for economic analysis tend to prefer a more inclusive pro-
duction boundary.
If youre really xated by administrative purposes, especially on a cross-country basis, you might prefer to leave
out the informal part, so that you can more strictly compare one country to another. But if youre interested in a
time series then, in the sense of doing economic policy analysis, you might well say, well Id sooner have a bad
estimate of something than no estimate. So, this trade-obetween the two is quite problematic. And I think that
is fundamental of where were at at the moment. (Interview with former ISWGNA member, Edinburgh, 2017)
A national accounting expert at the Economic Statistics Branch of UNSD made similar remarks.
According to the interviewee, debates about potential revisions to GDP measurement often come
down to the question of whats the purpose?.
My view, and it may be a bit of a conservative view or a narrow view, is that theres one key reason why nation
states invest in something like the national accounts. And to me thats primarily because they care about employ-
ment and they care about taxation. And the national accounts allows them to model and forecast and, you know,
look at the relationships that lead to both of those. So, volume growth in GDP is strongly tied to employment
outcomes. Current price GDP, probably tied to taxation. The informal economy, the household sector,
theyre important to understand for other reasons, but youre not going to be designing your monetary or
scal policy to impact on those, and in fact theres going to be very little government policy that is directly tar-
geted at changing those. (Interview with UNSD statistician, New York, 2019)
This divide was also apparent at a 2015 conference in Paris, hosted by the OECD and the International
Association for Research in Income and Wealth, called W(h)ither the SNA?. While most participants
supported an expansion of GDP, a signicant minority of peopleemphasised the diculty of imple-
menting such changes and the increased demands it would place on national accountants (Interview
with former ISWGNA member, Edinburgh, 2017). The latter were those concerned with the policy
applications of the data.
If youre the Ministry of Finance, for example, it doesnt matter what youre doing with housework. You cant tax
housework, and so, and so there was quite a tension there. But a lot of, mostly the people who were defending
the status quo were people who were concerned with administrative uses. And the people who wanted the
massive expansion were the ones who wanted to do analysis. Thats a bit simplied, but not much. (ibid.)
These practical arguments which include isolation from markets, data collection and valuation chal-
lenges, reliability and comparability, and policy applications reect professional norms that place
high value on the reliability and comparability of ocial statistics. Yet, they also coincide with
state interests in employment, scal and monetary policies. Because household services and care
work are not imagined as productive work, they are not considered relevant for these policy areas.
In contrast, feminist economists have convincingly demonstrated that gender gaps including in
unpaid work have far-reaching eects on macroeconomic outcomes (Seguino 2019). Furthermore,
whereas attempts have been made to incorporate other sectors and activities that are hard to
measure, no such eort was made for unpaid household services. The informal sector, for
example, is dicult to measure directly and current data rely heavily on estimates (International
Labour Organization 2013, p. 244), yet it has been inside the SNA production boundary since
1993. And imputations are applied in other areas of the SNA, notably nancial services and owner-
occupied housing. In contrast, recent innovations toward measuring and valuing unpaid household
services (such as time-use surveys) have primarily gone on outside of national accounting and on a
comparatively limited scale.
The Household Sector in the 1993 SNA Revision
The report of the 1981 Statistical Commission session recognises the need to reconsider the house-
hold sector, as the following passage indicates:
For most developed countries, [imputations for non-market activity] are of relatively minor signicance in present
estimates of the gross domestic product (GDP). For developing countries, however, they may be much more
NEW POLITICAL ECONOMY 9
important. For both developed and developing countries, furthermore, there are demands for new kinds of impu-
tations beyond those presently included in the gross domestic product. (UNSC 1981, p. 12)
But a cautious attitude prevailed, as several delegates expressed a strong resistance to losing sight of
the transactions-oriented base [of the SNA], not only because its data are likely to be relatively much
rmer but also because market transactions are often the vehicle for government actions(UNSC
1981, pp. 1213).
The SNA states that the biggest problem in determining the activities included in the production
account is deciding how to treat ‘…activities that produce goods or services that could have been
supplied to others on the market but are actually retained by their producers for their own use
(ISWGNA 2008, p. 6). One of these grey areas is own-account production, which includes activities
such as subsistence farming. Another is own-account services, a category that includes the prep-
aration of meals, care and training of children, cleaning, repairs, etc. (ibid.). The 1993 SNA
conrmed the inclusion of own-account goods and added some activities (including water collection
and repairs to buildings) inside the production boundary on these grounds (Harrison 2005, p. 150
2
).
Services, in contrast, were explicitly excluded.
Two main discursive justications for this exclusion emerge from reports of the ISWGNA and the
UN Statistical Commission during the 1993 revision process. The rst justication can be labelled the
market criterion. The second is a distinction between non-market goods and non-market services a
distinction that is in many respects arbitrary but leaves no ambiguity about the status of these ser-
vices. These two lines of defenceare both applied sometimes quite explicitly in expert delibera-
tion during the revision process leading to the 1993 SNA.
The rst line of defence is the market criterion. The market criterion is equivalent to what is often
called the third party criterion. The third party criterion is derived from Margaret Reidsdenition of
household production as consisting of unpaid activities that could conceivably be delegated to a paid
worker or replaced by market goods (Reid 1934, p. 11). Along similar lines, Benham (1953, p. 173)
reasoned that if we ‘…can nd another economy, with markets, where consumption patterns are
very similar, why not price the goods and services at the prices ruling in the latter?. This position
had become a professional consensus among economic statisticians by the early 1970s (Sakuma
2013, p. 5F56). To the third party criterion, Wood (1997) adds an additional rst world criterion.
Wood argues that a nonmarket activity is only considered productive if it is bought and sold in devel-
oped market economies. The market criterion in this analysis comprises both the third party and rst
world criteria.
3
The market criterion is evident in the report of the 1981 Statistical Commission. The report
acknowledges that [t]he distinction between what is considered to be subsistence output and
what is not is essentially an arbitrary one. It reects mainly the traditional limits of marketed
output in developed countries(UNSC 1981, p. 14). The market criterion is also implied in the
SNAsdenition of production:
All goods and services produced as outputs must be such that they can be sold on markets or at least be capable
of being provided by one unit to another, with or without charge. The SNA includes within the production bound-
ary all production actually destined for the market, whether for sale or barter. (ISWGNA 1993, p. 5, ISWGNA 2008,
p. 6)
The second justication is the distinction between household goods and household services. The
production boundary of the 1968 SNA included some primary products for own consumption,
such as the goods processed from agricultural or mining products, but excluded services (except
for housing repairs by owner-occupiers) (Chadeau 1992, p. 87). In the 1993 SNA, it expanded to
include all goods produced by households for their own consumption but continued to exclude ser-
vices, except for housing services produced by owner-occupiers of dwellings, and storage which is
considered as an extension of the goods production process(ibid.).
In a 1987 Expert Group meeting, the ISWGNA discussed several possible changes to the pro-
duction boundary. These include the issues of how to value subsistence agricultural goods, how to
10 D. DEROCK
classify repairs to buildings, how to treat water collection, and the activities of midwives and funerals
(Harrison 2005, pp. 1501). The discussion resulted in a few changes to the production boundary. Two
of these in particular water collection and midwives and funerals (discussed as a single topic) illus-
trate the goods-services distinction. Water collection was moved inside the production boundary
based on the argument that it should be treated as the production of a good (that is making the
water available where it is needed)(ibid.). Regarding midwives and funerals, the expert group
decided that, as services, neither should be moved within the production boundary.
These choices were based on convention rather than strict criteria. In general it was not felt poss-
ible to have a single succinct denition of the production boundary that would explain why some
items were included and some excluded …’ (Harrison 2005, p. 148). To get around this ambiguity,
the ISWGNA decided to give fairly general indications followed by specic lists of examples that
would make clear where the boundary should be drawn(ibid.). Such a list appears in the SNA
(ISWGNA 1993, p. 149):
(1) The cleaning, decoration and maintenance of the dwelling occupied by the household including
small repairs of a kind usually carried out by tenants as well as owners;
(2) The cleaning, servicing and repair of household durables or other goods, including vehicles used
for household purposes;
(3) The preparation and serving of meals;
(4) The care, training and instruction of children;
(5) The care of sick, inrm or old people;
(6) The transportation of members of the household or their goods
These activities were explicitly excluded, and remain so in the most recent version of the SNA. In
making these choices, statisticians relied on historical precedent, noting that the only extensions to
the production boundary previously accepted are for the production of goods(Harrison 2005,
p. 150). Services provided within the household, on the other hand, are always immediately con-
sumed by those producing them and therefore do not add to the pool of goods and services available
for redistribution(ibid.).
As several scholars have pointed out (e.g. Wood 1997, Waring 2003), neither of these lines of
reasoning the market criterion nor the goods-services distinction are consistently applied. For
instance, washing clothes or taking care of children can be (and frequently are) done by paid dom-
estic workers and day care centres (Wood 1997, p. 51). Likewise, there is nothing inherent in services
that makes them any less productive than goods. It was not until the 1993 SNA that services were
given a strict statistical denition (ISWGNA 1993, p. 148, Broussolle 2015, p. 574). Services were a
major topic in the 2008 SNA, given the growing importance of, among others, digital services,
nancial services and intellectual property. The 2008 SNA introduced several clarications to the
denition of services, which had the paradoxical eect of further blurring the goods-services distinc-
tion
4
(Broussole 2015). The distinction between non-market goods and services is especially arbitrary
in the context of a subsistence household (Waring 2003, p. 36).
Summary
The rst part of this section shows that not all statisticians and users of national accounts data agree
on the exclusion of unpaid household services from the SNA production boundary. The arguments
given by national accountants with direct involvement in standard-setting are grounded in practical
concerns such as data collection challenges, international comparability, and policy applications. Yet,
the decades-long history of contestation surrounding the issue makes clear that even a practical and
technocratic framing is deeply political. And, because nearly all of the excluded activities are per-
formed by women, the technocratic framing covers up deeply gendered ideas regarding what con-
stitutes productive work and what does not. When the exclusion was claried in the 1993 SNA, it was
NEW POLITICAL ECONOMY 11
justied with reference to the choices that had been made in the previous SNA manuals starting in
1953. This ideational path-dependency is only possible because of the hands-oglobal governance
of the SNA.
Concluding Remarks
Throughout its history, from the UNSO to the ISWGNA, GDP has been the domain of a small group of
economic statisticians. The technical nature of international statistical standards is a source of power
for statisticians employed by IOs and those with experience in international bureaucracies originating
in the Global North even if these statisticians do not perceive their work as political. This form of
governance is largely insulated both from interests of outside actors and from competing ideas, par-
ticularly ideas from the eld of feminist economics. This leaves decisions about GDP methodology in
the hands of experts with shared norms (about the quality of ocial statistics) and ideas (about the
boundaries of markets).
Although the treatment of unpaid household services in the SNA has been unchanged until now,
this does not mean that change is impossible in the future. As indicated in the interview passages
and commentary above, statisticians are aware of the criticisms and tend to be sympathetic. Increased
public debate about GDP could reduce the insulation of exper ts from competing ideas. Moreover, inno-
vations in data collection, such as the use of big data, could oer solutions to some of the practical bar-
riers. The current SNA revision began with the 50th session of the UN Statistical Commission in March
2019. The key issues, which make up the mandate for the next manual, are globalisation, digitalisation,
well-being, and sustainability (ISWGNA 2018, p. 3). Whether or not unpaid household services is
deemed to fall under the category of well-being remains to be seen. Considering that the topic was
not on the agenda of the previous revision, it is not likely to return in the near future. In the longer
term, however, there are no immovable barriers to major changes. It is also conceivable that GDP
will become less inuential as alternative indicators receive more attention (Fioramonti 2017).
From GDP gures to the Sustainable Development Goals and corruption indices, numbers and
rankings shape global politics in important ways. The origins of these numbers and the governance
of the international statistical system have largely been neglected. The example of unpaid services in
GDP shows that statisticians, due to their expertise, possess a great deal of agency over global stan-
dards for economic measurement. While this agency allows for institutional change, continuity often
prevails. Professional norms and shared ideas remain important drivers of stability in the way econ-
omies are quantied. As Ward (2004b, p. 300) observed, The adoption of the SNA assumes there is a
standard underlying economic model that serves all countries equally. This assumption has eec-
tively marginalised large amounts of womens work, as feminist scholars have shown. GDP has far
outgrown its role as an indicator of physical output in mid-twentieth century North America and
Western Europe. As such, it is often expected to tell us a great deal more about social and economic
progress and performance than it is capable of doing. Yet, as long as this gure remains so important
in public life, its biases and shortcomings will lead to distortions in the way we see the economy.
Notes
1. I use the term unpaid household servicesthroughout to refer a range of activities (specied on p. 14 of this article)
performed by households for their own use. While other terms with clear political connotations are available, these
alternatives are either too broad or too restrictive. For example, unpaid workand unpaid labourare unsuitable in
this context because several forms of unpaid work are included in GDP. Domestic labourand care workboth have
the advantage of emphasising the gendered character of the work, but arguably leave out some of the activities in
question, such as transportation and minor home repairs. The term unpaid workis used occasionally in the article
in reference to a broader category of activities including, for example, subsistence agriculture.
2. From ISWGNA Expert Group meeting on the Household Sector, September 1987, Florence, Italy. The document
The Background to the 1993 Revision of the System of National Accounts, edited by Anne Harrison (2005), is an anno-
tated collection of all reports from the 13 Expert Group meetings of the ISWGNA between 1986 and 1983.
12 D. DEROCK
3. While the third party criterion is accepted among statisticians, the third world criterion is a critique made by Wood
(1997) and not acknowledged by statisticians. The third world criterion is useful in this context because it high-
lights the persistence of neo-colonial modernisation theory in development policy.
4. Among the changes to the denitions of services in the 2008 SNA is the distinction between change-eecting
services and margin-services (ISWGNA 2008, pp. 967, Broussolle 2015, pp. 5756). The 2008 SNA (ISWGNA
2008, pp. 967) lists several examples of change-eecting services, including: transportation, cleaning, repairs,
healthcare, providing accommodation, improving ones appearance, education, entertainment, and providing
advice and information. Notably, all of these activities are excluded from GDP when no money is exchanged,
but are explicitly listed as examples of productive services.
Acknowledgements
This research is part of the FICKLEFORMS project at the University of Amsterdam. I am grateful to the team members,
department colleagues and anonymous reviewers for their close reading and insightful comments.
Disclosure Statement
No potential conict of interest was reported by the author.
Funding
This work was supported by the European Research Council under the European Unions Seventh Framework Pro-
gramme [FP/2007-2013]/H2020 European Research Council (ERC) [Grant Agreement number 637683].
Notes on Contributor
Daniel DeRock is a PhD candidate in the political science department of the University of Amsterdam. He is currently
researching the global governance of economic and social indicators.
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16 D. DEROCK
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