Beyond GDP

Abstract Gross Domestic Product and Gross National Income remain essential measures of economic activity, but the internationalisation of ownership, employment, corporate structures and taxation raises a wider question: do these measures by themselves adequately describe the economic capacity ultimately controlled by the residents and companies of a country? A ship may be beneficially owned in one country, registered in another, crewed by people from several others, operate almost entirely in international trade and generate income through companies incorporated in still further jurisdictions. Similar divisions occur in multinational retail, finance, manufacturing, intellectual property and investment. This paper proposes that conventional national accounts should therefore be supplemented by an Economic Capacity Statement examining beneficial ownership of internationally controlled productive assets, international income flows, employment, effective taxation, tax concessions and household prosperity. The argument is not against international investment, legitimate tax competition or wealth creation. Neither does it assume wrongdoing merely because an asset is registered abroad. Its underlying principle is simpler: economic arrangements should be assessed according to their substance, legality and transparency, using comparable standards regardless of the size or political importance of the jurisdiction concerned.