The Accounting Blind Spot in Public Infrastructure and Public Goods

Roshan Ghadamian
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Roshan Ghadamian: Institute for Regenerative Systems Architecture

IRSA Working Papers from Institute for Regenerative Systems Architecture

Abstract: Public infrastructure is increasingly delivered through financialised models despite extensive evidence of higher long-term cost, rigidity and fiscal risk. This paper argues their persistence is driven less by economic performance than by how public-sector accounting classifies capital, obligations and time. Public accounting frameworks are built to enforce annual fiscal discipline and control debt. They are not built to represent capital continuity or mission-aligned renewal. So a delivery model that defers recognition of obligations, smooths expenditure across reporting periods, or moves commitments off balance sheet appears fiscally responsible while embedding greater long-term fragility — and the appearance is what gets compared. â­ The claim is causal rather than descriptive. Accounting does not merely record infrastructure choices; it structures them, by rendering capital continuity, mission cycles and deferred fragility invisible. On that account the persistence of financialised delivery is an accounting outcome rather than a policy anomaly — the model is selected by the classification system, not by evidence of superiority. âš ï¸ And the paper's own conclusion is that its layer cannot fix this. Standards operationalise priorities; they do not set them. Without a conceptual expansion of public finance that recognises capital continuity as an object in its own right, accounting reform can only rearrange the surface of the problem.

Keywords: public accounting; off-balance-sheet; capital continuity; deferred fragility; accounting selection; public--private partnerships; fiscal classification (search for similar items in EconPapers)
JEL-codes: H54 H61 H83 M41 (search for similar items in EconPapers)
Date: 2026-01
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