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History

The ICP was established in 1968 as a joint venture of the United Nations Statistical Division (UNSD) and the International Comparisons Unit of the University of Pennsylvania with financial contributions from the Ford Foundation and the World Bank. It started as a modest research project but the ultimate goal was to set up a regular program of worldwide PPP-based comparisons of GDP.

 

The initial intention was to cover GDP from both the expenditure side and the production side of the national accounts. To date, comparisons have only been made from the expenditure side because they are less difficult to implement in practice. They involve only one set of final expenditures, whereas comparisons from the production side involve both outputs and inputs and have the added complexity of double deflation.

 

Comparisons of final expenditure on GDP have been completed for 1970, 1973, 1975, 1980, 1985, 1993 and 2005. They covered 10, 16, 34, 60, 64, 117 and 146 countries respectively.

 

After the 1975 comparison, the ICP discarded its research status and became a regular part of the UNSD work program. It was also regionalized. UN regional commissions would organize regional comparisons which the UNSD at the centre would oversee and coordinated to ensure that they could be combined in a world comparison.

 

With regionalization came the emergence of the Eurostat-OECD PPP Program in the early 1980s. To begin with, the program followed the same five-year cycle as the ICP and covered only EU member states and OECD member countries. Since 1990, the program has operated on a three-year survey cycle and coverage has been extended to European countries that are not members of either the European Union or the OECD. Eurostat makes benchmark comparisons annually for EU member states and EU associated countries. The OECD makes benchmark comparisons every three years covering all countries participating in the program.

 

1993 was the first time that all regions of the world were covered, but no world comparison was made. As a result, the United Nations Statistical Commission (UNSC) decided that the ICP should be thoroughly reviewed before any more comparisons were attempted. The review concluded that, among other weaknesses, the ICP suffered from poor management and insufficient resources at all levels – central, regional and national. The UNSC response was to ask the World Bank, which since 1993 had assumed the role of ICP global coordinator, to propose a strategy to overcome these and other deficiencies identified by the review.

 

The Bank proposed mobilizing funds from a variety of sources, establishing a governance structure to provide effective management and coordination both at and between the three levels of operation, preparing complete and clearly-written documentation on technical and procedural matters, and linking participation in the ICP with national statistical capacity building. The UNSC approved these proposals but remained concerned about securing adequate funding. It was only in 2002, after the Bank had embarked on a successful major fund raising exercise, that the UNSC agreed to the 2005 comparison.

 

Following its successful completion of 2005 Round, the United Nations Statistical Commission (UNSC) in its 39th session requested the World Bank to host the Global Office and take on the global program coordination of the 2011 Round, which the World Bank accepted.  Following the Friends of Chair evaluation of the ICP, the UNSC at its 40th session gave the final go ahead for the ICP 2011 Round.