Does The World Bank Double Count?
Interestingly, while world Gross Domestic Product (GDP) and world Gross National Product (GNP, now known as Gross National Income or GNI) are conceptually identical values for social accountants (because, by definition, the total net positive international factor income receipts included in GNP exactly cancel out the corresponding total net negative receipts), the World Bank valuation of GNP and GDP differs by about one trillion US dollars, and the difference grows year by year.
The reason here however is not a double-counting error, but that different valuations of national currencies are used. Thus, the World Bank applies "ppp" (purchasing power parity) valuations to GDP, but an "Atlas Method" to estimate GNI. The argument is apparently that if world GDP is treated as an income, it will shrink (the World Bank cites 2004 world GNI of $39.8 trillion and a world GDP of $40.9 trillion, a discrepancy of $1.1 trillion).
One result of these different valuation methods, critics point out, is that it becomes impossible to compare GDP and GNI internationally with respect to the net international transfer of factor-income (mainly profit income), which is excluded from national GDP, but included in national GNI.
Read more about this topic: Double Counting (accounting)
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