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HANDBOOK OF THE INTERNATIONAL COMPARISON PROGRAMME
Annex I - HISTORY AND ORGNNIZATION OF THE ICP
A. Antecedents of the ICP
- Systematic international comparisons based on purchasing-power parities
that are antecedents of the ICP consist of:
- Comparisons carried out in the 1950s under the auspices of the Organisation
for Economic Co-operation and Development (OECD) (then the Organisation
for European Economic Co-operation (OEEC); a/
- Comparisons carried out since 1959 within the framework of the Council
for Mutual Economic Assistance (CMEA); b/
- Comparisons carried out in the early 1960s in the Latin American
region; c/
- Comparisons between centrally planned and market economies, carried
out in the 1960s under the auspices of the Conference of European
Statisticians. d/
These earlier studies helped contribute to the methodology of ICP work
and to demonstrate the feasibility of international comparisons based
on purchasing-power parities. The study of Paige and Bombach (1959)
on the production side pointed out the very large data requirements
if a full-scale approach is to be adopted.
- The idea of moving from these limited comparisons to regular and more
extensive comparisons, perhaps at the world level, first emerged at
the thirteenth session of the United Nations Statistical Commission,
held in 1965. The Commission recommended, as a first step, that a study
be made of available experience and data in the field at the international,
regional and national levels, with a view to formulating more specific
proposals for this work.
- The recommended study was undertaken in 1967, and a report entitled
"International comparison of production, income and expenditure aggregates''
(E/CN.3/364) was submitted to the Statistical Commission at its fifteenth
session, in 1968. The purpose of the report was to outline a project,
to carry out comparisons for a selected number of countries for the
years 1968 to 1971 and to develop, test and describe suitable techniques
for more comprehensive comparisons to be carried out later. Because
of the limited resources available in the United Nations budget for
statistical purposes, members of the Commission considered that the
project might be organized on the basis of participation by additional
international organizations and with considerable assistance from Member
States.
B. Recent history of the ICP
- The United Nations International Comparison Project, which began its
activities in 1968, indeed became a cooperative undertaking. The central
project staff were organized into two units, one located at United Nations
Headquarters and the other at the University of Pennsylvania, in Philadelphia.
To enable the creation of the latter unit, the Ford Foundation made
a major contribution in the form of a grant to the University. The World
Bank provided substantial financial aid, and the statistical offices
of the participating countries made substantial contributions in real
terms. The first project director was Professor Irving B. Kravis of
the University of Pennsylvania.
- The first report on the ICP was published in 1975. e/ This publication
contains a detailed description and discussion of the methods applied
and presents the results of the comparison for 10 countries (Colombia,
France, the Federal Republic of Germany, Hungary, India, Italy, Japan,
Kenya, the United Kingdom of Great Britain and Northern Ireland and
the United States of America) for both 1967 and 1970. This phase I report
is far from being a world comparison; nevertheless, countries from almost
all continents, at many levels of development and with different economic
systems were represented in this small sample. Further, this pilot study
implemented a methodology for multilateral comparisons that worked within
a framework that provided for expanding the number of participating
countries on a systematic basis.
- The first phase was followed shortly by a second one, in which results
for the reference years 1970 and 1973 were presented for 16 countries.
Beginning with phase III, the ICP was planned as a regular exercise,
to be conducted at five-year intervals, with 34 countries in 1975 (phase
III), f/ 60 countries in 1980 (phase IV) g/ and 64 countries in 1985
(phase V). At the twenty-fifth session of the Statistical Commission,
in 1989, the ICP was renamed. The letter "P" in the abbreviation now
stands for Programme, not for Project, as before.
- In addition to the impressive increase in the number of participating
countries, several other important changes took place between phase
I and phase IV of the ICP. After phase III, the role of the University
of Pennsylvania, which had until then been the main engine of the ICP,
was gradually transformed into that of adviser on methodological issues.
Another notable change in ICP responsibility was the increasing role
of the Statistical Office of the European Communities (EUROSTAT). EUROSTAT,
in fact, became not only the organizer of the European Community comparison,
but also, with its experienced staff, it has provided substantial technical
assistance to a number of regional comparisons and to the work on establishing
links among the various regions.
- The most important change that took place between phase III and phase
IV was the regionalization of the ICP. In the first three phases, some
results were presented by region, but the valuation of each country's
quantities was carried out at average prices of all participating countries.
In phase IV and onward, countries participated through regions or country
groups; first regional (e.g., African, OECD etc.) comparisons were carried
out and then the world comparison was built up by linking across these
groups.
- Regionalization came into effect for several reasons. One very important
reason has already been mentioned, namely, the strong support for regional
comparisons by the European Communities, and other sponsors. A related
reason was that the growing number of participating countries presented
obstacles to maintaining a highly centralized organization scheme and,
at the time, no international organization was in a position to take
on the task of a direct world comparison of all countries.
- For the most part, participating countries have provided domestic
resources for the data collection for ICP, while the Statistical Division
of the Department of Economic and Social Development of the United Nations
Secretariat, EUROSTAT, OECD and the Austrian Central Statistical Office,
in its capacity as organizer of the Eastern European comparison, have
units concerned with ICP-type work. Early sponsors of the ICP, such
as the Ford Foundation and a consortium of contributing countries organized
by the World Bank, provided resources that allowed coordination of the
benchmark comparisons, particularly among developing countries. In phases
IV and V, EUROSTAT became the financial supporter of the African and
Caribbean comparisons. In phase IV, the Inter-American Development Bank
(IADB) provided a major contribution to the Latin American regional
comparison; however, this effort was organized through a group of experts
visiting countries and little experience was gained by country statistical
offices, so that when IADB support was unavailable in phase V, no Latin
American regional comparisons took place. The ESCAP regional comparison
in phase V was assisted by the Government of Japan, the United Nations
Development Programme (UNDP), the World Bank, and the Asian Development
Bank.
- The table below gives an overview of the participation by various
countries in the first five phases of the ICP, presented by geographical
distribution of the countries. The composition of ICP regions, however,
does not necessarily correspond to geographically contiguous areas.
Participation in the phases of the ICP
|
Phases
|
|
I
|
II
|
III
|
IV
|
V
|
|
Benchmark year
|
Country/area
|
1970 aa/
|
1973 bb/
|
1975
|
1980
|
1985
|
Africa
|
Benin
|
|
|
|
|
x
|
Botswana
|
|
|
|
x
|
x
|
Cameroon
|
|
|
|
x
|
x
|
Congo
|
|
|
|
|
x
|
Cote d'Ivoire
|
|
|
|
x
|
x
|
Egypt
|
|
|
|
|
x
|
Ethiopia
|
|
|
|
x
|
x
|
Kenya
|
x
|
x
|
x
|
x
|
x
|
Madagascar
|
|
|
|
x
|
x
|
Malawi
|
|
|
x
|
x
|
x
|
Mali
|
|
|
|
x
|
x
|
Mauritius
|
|
|
|
|
x
|
Morocco
|
|
|
|
x
|
x
|
Nigeria
|
|
|
|
x
|
x
|
Rwanda
|
|
|
|
|
x
|
Senegal
|
|
|
|
x
|
x
|
Sierra Leone
|
|
|
|
|
x
|
Swaziland
|
|
|
|
|
x
|
Tunisia
|
|
|
|
x
|
x
|
United Republic of Tanzania
|
|
|
|
x
|
x
|
Zambia
|
|
|
x
|
x
|
x
|
Zimbabwe
|
|
|
|
x
|
x
|
|
|
|
|
|
|
Asia and Oceania
|
|
|
|
|
|
|
Bangladesh
|
|
|
|
|
x
|
Hong Kong
|
|
|
|
x
|
x
|
India
|
x
|
x
|
x
|
x
|
x
|
Indonesia
|
|
|
|
x
|
|
Iran, Islamic Republic of
|
|
x
|
x
|
|
x
|
Israel
|
|
|
|
x
|
|
Japan
|
x
|
x
|
x
|
x
|
x
|
Malaysia
|
|
x
|
x
|
|
|
Nepal
|
|
|
|
|
x
|
Pakistan
|
|
|
x
|
x
|
x
|
Philippines
|
|
x
|
x
|
x
|
x
|
Republic of Korea
|
|
x
|
x
|
x
|
x
|
Sri Lanka
|
|
|
x
|
x
|
x
|
Syrian Arab Republic
|
|
|
x
|
|
|
Thailand
|
|
|
x
|
|
x
|
Australia
|
|
|
|
|
x
|
New Zealand
|
|
|
|
|
x
|
|
|
|
|
|
|
Canada and United States of America
|
|
|
|
|
|
|
Canada
|
|
|
|
x
|
x
|
United States of America
|
x
|
x
|
x
|
x
|
x
|
|
|
|
|
|
|
Central and South America
|
|
|
|
|
|
|
Argentina
|
|
|
|
x
|
|
Bahamas
|
|
|
|
|
x
|
Barbados
|
|
|
|
|
x
|
Bolivia
|
|
|
|
x
|
|
Brazil
|
|
|
x
|
x
|
|
Chile
|
|
|
|
x
|
|
Colombia
|
x
|
x
|
x
|
x
|
|
Costa Rica
|
|
|
|
x
|
|
Dominican Republic
|
|
|
|
x
|
|
Ecuador
|
|
|
|
x
|
|
El Salvador
|
|
|
|
x
|
|
Grenada
|
|
|
|
|
x
|
Guatemala
|
|
|
|
x
|
|
Honduras
|
|
|
|
x
|
|
Jamaica
|
|
|
x
|
|
x
|
Mexico
|
|
|
x
|
|
|
Panama
|
|
|
|
x
|
|
Paraguay
|
|
|
|
x
|
|
Peru
|
|
|
|
x
|
|
Saint Lucia
|
|
|
|
|
x
|
Suriname
|
|
|
|
|
x
|
Trinidad and Tobago
|
|
|
|
|
x
|
Uruguay
|
|
|
x
|
x
|
|
Venezuela
|
|
|
|
x
|
|
|
|
|
|
|
|
Europe
|
|
|
|
|
|
|
Austria
|
|
|
x
|
x
|
x
|
Belgium
|
|
x
|
x
|
x
|
x
|
Denmark
|
|
|
x
|
x
|
x
|
Finland
|
|
|
|
x
|
x
|
France
|
x
|
x
|
x
|
x
|
x
|
Germany, Federal Republic of
|
x
|
x
|
x
|
x
|
x
|
Greece
|
|
|
|
x
|
x
|
Hungary
|
x
|
x
|
x
|
x
|
x
|
Ireland
|
|
|
x
|
x
|
x
|
Italy
|
x
|
x
|
x
|
x
|
x
|
Luxembourg
|
|
|
x
|
x
|
x
|
Netherlands
|
|
x
|
x
|
x
|
x
|
Norway
|
|
|
|
x
|
x
|
Poland
|
|
|
x
|
x
|
x
|
Portugal
|
|
|
|
x
|
x
|
Romania
|
|
|
x
|
|
|
Spain
|
|
|
x
|
x
|
x
|
Sweden
|
|
|
|
|
x
|
Turkey
|
|
|
|
|
x
|
United Kingdom of Great Britain and Northern Ireland
|
x
|
x
|
x
|
x
|
x
|
Yugoslavia
|
|
|
x
|
x
|
x
|
C. Present organization of
the ICP
- Since regionalization is the
basic approach to obtaining internationally comparable results, the
ICP is built up of individual regional comparisons which are, at the
same time, components of the global comparison covering all participating
countries. Consequently, related operational tasks and responsibility
for carrying out ICP work is shared between the world centre of ICP
and a number of regional organizing centres.
- It is not the role of this Handbook
to go into evolving details of organization of ICP work, which may be
subjecttochange from phase to phase owing to changing circumstances.
In the following paragraphs, a few broad indications of the approach
to organization are provided, as so far envisaged, to guide forthcoming
ICP activities.
- Serving as the world centre
of the ICP, the Statistical Division of the Department of Economic and
Social Development of the United Nations Secretariat promotes central
coordination in the implementation of the global ICP programme. The
major task of the world centre is to foster the required degree of consistency
among regional comparisons and the integrity of the global comparison
so that regional results can ultimately be linked to generate as reliable,
timely and useful world comparisons as possible. This activity also
involves coordination of efforts by groups of countries, international
organizations associated with them and prospective sponsors so that
it can lead to methodologically sound regional comparisons on a timely
basis. The central unit maintains close contact with the organizers
of the regional comparisons and is only indirectly related to participating
countries.
- The world centre focuses attention
on the development of the general methodological framework of ICP. Activities
carried out by the centre include, in particular, the following:
- Ensuring that the basic principles,
concepts and definitions applied are the same in all comparisons;
- Preparing the central breakdown
of GDP expenditures and promoting the harmonization of regional expenditure
classifications;
- Requiring that the methods
used by the regions are compatible and produce consistent results;
- Coordinating methodological
work to establish links among the regional comparisons;
- Developing and maintaining
descriptions of core commodities and promoting their inclusion into
regional lists of specifications;
- Facilitating the dissemination
of technical knowledge on ICP and serving as a centre for exchanging
technical information; making available to interested participants,
for reference purposes, documents used in previous phases or materials
prepared in a different region. For this reason it is essential that
the world centre be informed about all regional operations concerning
ICP.
- Countries interested in participating
in ICP join one (or, if they wish, parallelly more than one) of the
regional comparisons. Regional organizers usually contact and invite
countries to participate in the next benchmark comparison. However,
information on the country composition of regions and agencies acting
as regional coordinators can be obtained from the world centre.
- Country participation in ICP
is performed through interaction and cooperation with a designated regional
centre. ICP inputs, mainly basic price and expenditure data, are submitted
by the countries to the regional centre according to rules and an organizational
framework set by the region itself. For better orientation of work at
the country level, regional coordinators distribute technical instructions,
worksheets, questionnaires, a timetable with detailed schedules of operations
etc. They may invite countries to comment on the methodology and to
participate in eventual workshops or consultations. At any rate, active
involvement of countries in the methodological work, and in checking
and evaluating results is desirable.
- It rests with the regional organizers
to define procedures for organizational as well as methodological arrangements
at the regional level. Typical activities carried out by the regional
centres include the following:
- Adopting a regional expenditure
classification, taking into account the central classification considered
asthe minimum required breakdown. Regions may apply more detailed
categories provided they permit arriving at the breakdown of the central
classification;
- Developing a regional list
of specifications in collaboration with the countries, drawing on
their national practices to the extent possible. The list has to cover
the core commodities that are common in all regions;
- Processing basic data collected
from the countries. Methods used in generating regional results need
not be uniform across regions, as long as they remain compatible with
the world comparison methodology;
- Preparing the report on the
regional comparison.
- Once regional comparisons are
completed, the same data that countries had provided for regional comparison
purposes are used in the global comparison. Thus, the Statistical Division
makes arrangements for generating world comparison results and prepares
the report of the global comparison.
a/ See Gilbert and Kravis (1954)
and M. Gilbert and others, Comparative National Products and Price Levels
(Paris, 1958). Some earlier studies are also cited in Kravis (1984).
b/ For a description of this
programme, see Gyorgy Szilagyi, "An intercountry comparison of the national
income of planned economies", The Review of Income and Wealth, No. 2 (1962),
pp. 169-173.
c/ See "The measurement of
Latin American real income in US dollars", Economic Bulletin for Latin
Americaf vol. XII (October 1967). In addition, a major comparison was
undertaken for Latin America in 1968; see Jorge Salazar-Carrillo, "Latin
American real product comparisons", Economic Journal (December 1977).
d/ See Conference of European
Statisticians, Comparison of Levels of Consumption in Austria and Poland
(New York, 1968).
e/ Kravis, Kenessey, Heston
and Summers (1975).
f/ Kravis, Heston and Summers
(1982).
g/ The phase IV report World
Comparisons of Purchasing Power and Real Product for 1980, was published
jointly by the United Nations and the Statistical Office of the European
Communities (EUROSTAT), in 1986 (part I) and 1987 (part II).
aa/ In phase I, there were
six countries, which also provided benchmark data for 1967.
bb/ In phase II, six additional
countries provided benchmark data for 1970, which was combined with revised
data for the original 10 benchmark countries; in addition, all estimates
were also made for 1973 based on some original and some updated price
data.
United Nations Statistics Division - Time Use
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