4. Measuring Social Well-Being: GDP Is Neither Accurate Nor Fair

Governance at every level should aim to improve the well-being of all citizens within its span of concern. But present GDP measures, based primarily on commercial financial transactions rather than social well-being, significantly limit the power of economic theory to explain or justify broad social policy. The chapter reviews major international reform programs including adoption of accrual basis accounts by many governments, and recent work on Integrated Reporting (hereafter, <IR>) by the International Integrated Reporting Council (IIRC) that significantly broadens the concepts of capital and value creation or diminution for both corporations and government entities. The chapter proposes systematic introduction of an integrated standards-based program to establish government balance sheet approaches and to introduce <IR> standards, combined with a revised and coordinated international program on government and enterprise accountability and risk management.