The regional socioeconomic balance sheet: Design of the database

Abstract

THE BASIC idea and use of a regional balance sheet is similar to a balance sheet for a private enterprise; it is an attempt to measure the capital stock and to give a statement of the financial condition of the region. The asset side of the balance sheet provides a picture of the region’s assets, while the other side shows the claims or liabilities against these assets. From a managerial or decision-making viewpoint, the asset side of the balance sheet summarizes net fund uses, while the liability (and net worth) side shows net fund sources [l]. The decision-maker or public policy analyst uses the regional balance sheet to compare accounts at the beginning and ending of relevant periods. Differences in accounts in successive balance sheets are indicative of the public policy decisions over the period in question, for example, the use of vital resources. Pro forma balance sheets can be developed to forecast future activity and to reflect possible future alternative policies. Although the concept and use of balance sheets has been widely accepted for many years in private enterprise, it is only recently that the concept has been applied to accounting in the public sector [2]. The socioeconomic balance sheet includes a labor inventory to account for human assets and some items of intangible capital such as education and water resources which contribute directly to the total assets of the region. The term “socioeconomic” is used to distinguish between the expanded concept of a public sector balance sheet and a typical balance sheet in a firm which would measure only material wealth. A system of offsetting entries is used in balancing accounts of the socioeconomic balance sheet so that more precise measures of material wealth are separated from human assets and intangible wealth [3]. As stated above, the socioeconomic balance sheet is an attempt to measure the capital stock or total cumulative wealth of a region. In Table 1 the summary accounts are intended to reflect the “real” wealth rather than “financial” wealth. If one takes a “systems” view of the region, the socioeconomic balance sheet provides a useful descriptive model of a complex structural whole, including many sub-elements in the region [4]. Productive elements in the region (i.e. government, business, labor, edu-