Public Net Worth

Accounting, Government and Democracy

“This important book… a call 
for sensible change. It should be answered” – Martin Wolf

An opportunity to improve long-term public finances
without cutting public services or increasing taxes.

Through better asset and liability management, government revenues can be increased significantly – by several per cent of GDP per annum

Accrual-based metrics also enable and encourage reduced costs, such as reduced interest costs through better debtor and creditor management.

“Just as a company or a household would look at their balance sheet when making investment decisions, so should a government.” – Andy Haldane

What is the opportunity?

1. Adopting accounting-driven, Net Worth-based fiscal rules/targets creates major opportunities to improve long-term public finances without cutting public services or increasing taxes.

2. With a focus solely on debt and cash metrics, governments overlook the value of public assets and the full extent of liabilities. This narrow perspective leaves politicians without the necessary insight or accountability, leading to suboptimal use of resources and potential unfairness across generations.

Foreword by Martin Wolf

Chief Economics Commentator, Financial Times

“An excessively narrow focus on deficits can lead to bad decisions” ….

“The invention of modern accounting is among the most important advances in human history. Without it, today’s complex economies would be impossible.”

….”Government is a complex activity.”

Read the first chapter or order the book here!

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How accountants can help save public finances

How accountants can help save public finances

Debt-based fiscal rules as employed by most G7 countries do little to describe the problem, and even less to manage it. Understanding the true state of public finances requires a full balance sheet, driven by accrual-based accounting. This in turn will open up opportunities for better management of assets and liabilities, which will greatly assist in meeting the challenges faced by graying G7 countries and their overstretched public finances.

Meet the authors

Ian Ball

Willem Buiter

John Crompton

Dag Detter

Jacob Soll

Simon Nixon, on his new blog ‘The Wealth of Nations’

“Public Net Worth is a book with a mission: to get governments to overhaul their approach to public finance and accounting….focusing on net worth would at least force the government to ask the right questions about how best to improve the wealth of the nation –
and not further immiserate the next generation”