PPPs were first calculated on an experimental basis in the 1960s by the University of Pennsylvania, which was working on the ICP jointly with the United Nations Statistics Division. The ICP output was benchmark PPPs for various years, with 1970 being the first year of the ongoing, or production, series. The benchmarks were produced for 1975, 1980, 1985 and 1993, with the World Bank assuming the role of global coordinator for non-OECD countries in 1993; 118 countries were covered in the 1993 round, compared with 10 in 1970. In 1980 the OECD, in collaboration with the statistical office of the European Union (Eurostat), commenced a PPP program for its member countries. The OECD-Eurostat PPP Program was integrated within the ICP for those years in which the two overlapped. However, the OECD-Eurostat Program has been run more frequently, providing benchmark data for Western European countries and the non-European OECD countries for 1980, 1985, 1990, 1993, 1996 and 1999. (In 1999, Eastern European non-OECD countries were also included).
The last round of the ICP, conducted in respect of 1993, was dogged by problems. The funding available was insufficient to handle a project of the scope envisaged, the data supplied was often of poor quality, there was little understanding by many countries of the statistical implications of the data they were supplying, quality control of the data was poor, and the results took many years to compile. Major reviews (see footnote 4) of the OECD-Eurostat PPP Program and of the ICP were carried out in the late 1990s. Following these reviews and discussions within the United Nations Statistical Commission, the World Bank has been planning to revitalise the ICP, with a new round covering 117 countries being planned for reference year 2003. The Australian Bureau of Statistics has participated actively in the planning for a revitalised ICP through a ‘Friends of the Chair’ group which has provided advice to the United Nations Statistical Commission and the World Bank on planning for the 2003 round. The Statistical Commission has given strong support to the 2003 ICP.
4 Review of the OECD-Eurostat PPP Program, 1997 - Report commissioned by the OECD and produced by Ian Castles; Evaluation of the International Comparison Programme (ICP), 1998 - Report commissioned by the United Nations Statistical Division, produced by Jacob Ryten, and presented to the 1999 meeting of the United Nations Statistical Commission.
The World Bank is currently raising the funds required to run a 2003 round designed to avoid the pitfalls of the 1993 round. It has also been planning how to strengthen the round. Broadly, the overall 2003 ICP will be conducted by a team at the World Bank, and run on a regional basis with a coordinator being located in each of five major regions around the world. The OECD and Eurostat, in conjunction with the Economic Commission for Europe, will be responsible for about 45 countries which currently participate in their PPP Program. The ICP will be overseen by a high-level Executive Board which will be responsible for ensuring the project remains on track and that high quality results are delivered. It is expected that the Australian Statistician will be a member of the Executive Board.
Apart from the cost associated with establishing the international team to conduct the ICP, there will also be costs associated with providing technical assistance to countries to enable them to improve the quality of their national accounts and/or prices statistics, as well as the costs of collecting the necessary additional prices, which some less developed countries cannot afford. The World Bank is preparing a handbook for participating countries and software that will assist countries in collecting and editing prices. Therefore, an important spin-off to the 2003 ICP will be an improvement in the underlying statistical infrastructure in many less developed countries. The World Bank has also initiated a number of research projects to establish the conceptual approaches to be adopted in areas such as the survey framework, the lists of products to be priced, the index number formula to be used in aggregation and the method(s) to be used in linking countries and regions. The ABS is likely to be providing technical assistance to countries in the Asia-Pacific region, as well as contributing to the overall coordination of the ICP within the region.