A few weeks ago, The Economist published an article on economic governance that discussed the importance of public sector accounting. It recognized the importance of maintaining existing public-sector assets and investment in new ones. These assets, according to an IMF study, account for a significant portion of GDP. But, the article asserts, filling potholes and repairing bridges are not as politically appealing as flashy new infrastructure, and few economies engage in robust public-sector accounting that demonstrates the net worth of these assets.
Maybe if governments and citizens understood the value of their public assets, they’d be inclined to invest in their maintenance – avoiding waste and even catastrophic accidents when poor infrastructure fails?