OECD Journal on Budgeting

The OECD Journal on Budgeting is published three times per year. It draws on the best of the recent work of the OECD Working Party of Senior Budget Officials (SBO), as well as special contributions from finance ministries, academics and experts in the field and makes it available to a wider community in an accessible format. The journal provides insight on leading-edge institutional arrangements, systems and instruments for the allocation and management of resources in the public sector.

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The whole elephant

A proposal for integrating cash, accrual, and sustainability-gap accounts

Although the budget deficit is much discussed in political debate and economic research, there is no agreement on how it should be measured. There are at least four options, which can be called the cash deficit, the financial deficit, the full-accrual deficit, and the comprehensive deficit. Each is informative, but each has problems of relevance or reliability. Some are more vulnerable to manipulation involving assets and liabilities that are unrecognised in the underlying accounting, others to manipulation involving the mismeasurement of recognised assets and liabilities. Governments should publish all four in a form that reveals their interrelationships.

JEL classification: H6, H61, H62

Keywords: Accrual accounts, comprehensive accounts, liabilities, budget deficit


JEL: H6: Public Economics / National Budget, Deficit, and Debt; H62: Public Economics / National Budget, Deficit, and Debt / National Deficit; Surplus; H61: Public Economics / National Budget, Deficit, and Debt / National Budget; Budget Systems
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