Th is chapter describes the purpose and evolution of this
Manual, the uses of government fi nance statistics, the
structure of the government fi nance statistics frame-
work, major methodological changes from the previ-
ous editions of this Manual, the implementation of the
methodology, and the structure of this Manual.
Purpose of the Manual.
1.1 Th e Government Finance Statistics Manual 2014
(GFSM 2014)—the third edition of this Manual^1 —
describes a specialized macroeconomic statistical
framework, the government fi nance statistics (GFS)
framework, designed to support fi scal analysis. Th e
Manual (i) provides the economic and statistical re-
porting principles to be used in compiling the sta-
tistics; (ii) describes guidelines for presenting fi scal
statistics within an analytic framework that includes
appropriate balancing items;^2 and (iii) is harmonized
with other macroeconomic statistical guidelines. Th e
Manual does not treat systematically the practical as-
pects of compiling the statistics.^3
1.2 Fiscal policy is the use of the level and compo-
sition of the general government and public sectors’
spending and revenue—and the related accumulation
of government assets and liabilities—to achieve such
goals as the stabilization of the economy, the reallo-
cation of resources, and the redistribution of income.
(^1) Th e fi rst edition was published in 1986 with the title A Manual
on Government Finance Statistics. It is referred to as the GFSM
1986. Th e second edition was published in 2001 with the title
Government Finance Statistics Manual 2001. It is referred to as the
GFSM 2001.
(^2) Balancing items summarize the net value of the activities
covered by a set of reporting entries, such as the net value of total
revenue minus total expense. Chapter 4 provides details on the
GFS analytic framework and its balancing items.
(^3) Guidance on compilation practices can be found in Government
Finance Statistics: Compilation Guide for Developing Countries,
2011, Quarterly Government Finance Statistics: Guide for Compil-
ers and Users, and other related material.
Th e primary purpose of the GFSM 2014 is to provide a
comprehensive conceptual and reporting framework
suitable for analyzing and evaluating fi scal policy, es-
pecially the performance of the general government
sector and the broader public sector of any economy.
Th ese concepts of sectors are described in Chapter 2.
In short, the general government sector consists of
resident institutional units that fulfi ll the functions
of government as their primary activity. Th is sector
includes all government units and all nonmarket,
nonprofi t institutional units (NPIs) that are con-
trolled by government units. Th e function of govern-
ment units, broadly described, is to implement public
policy through the provision of primarily nonmarket
goods and services and the redistribution of income
and wealth, with both activities supported mainly by
compulsory levies on other sectors. Th e public sector
consists of all resident institutional units controlled
directly, or indirectly, by resident government units—
that is, all units of the general government sector and
resident public corporations.
1.3 Fiscal statistics have traditionally been used to
analyze the size of government; its contribution to ag-
gregate demand, investment, and saving; the impact
of fi scal policy on the economy, including resource
use, monetary conditions, and national indebtedness;
the tax burden; tariff protection; and the social safety
net. In addition, analysts have become increasingly
interested in fi scal rules, structural defi cits, assess-
ing the eff ectiveness of spending on poverty allevia-
tion, the sustainability of fi scal policies, net debt, net
wealth, and contingent claims against government,
including the obligations for social security pensions.
See the annex to Chapter 4 for the description of the
use of GFS in fi scal analysis.
1.4 Th e GFSM 2014 supports the compilation of in-
ternationally comparable statistics for the general gov-
ernment sector, the public sector, and their subsectors.