In all countries, and at all levels of government, performance seems to lie in the eyes of the beholder. Different individuals looking at the same set of facts come to widely different conclusions. Divergent views and opinions about appropriate policies and their related programmes and projects are not only understandable, but a sine qua non of a healthy democratic system. However, divergent views about the performance of a government – implementation of policies, programmes and projects – are much harder to reconcile for lack of a fact-based consensus.
The private sector, on the other hand, does not face this problem. If a private sector company presents its financial statement and claims that it has made US$350 million profit, we accept it on its face value – not because we trust them blindly, but because those financial statements are prepared using the Generally Accepted Accounting Principles (GAAP). These statements, in turn, are audited by an external auditor to ensure that the statements were indeed prepared using those principles. If they do not stand up to an audit, then there are consequences, such as a loss of confidence by investors, often expressed as a sharp drop in the price of publicly traded shares.
The private sector, on the other hand, does not face this problem. If a private sector company presents its financial statement and claims that it has made US$350 million profit, we accept it on its face value – not because we trust them blindly, but because those financial statements are prepared using the Generally Accepted Accounting Principles (GAAP). These statements, in turn, are audited by an external auditor to ensure that the statements were indeed prepared using those principles. If they do not stand up to an audit, then there are consequences, such as a loss of confidence by investors, often expressed as a sharp drop in the price of publicly traded shares.
