allowing a more robust comparison of living standards. Adequate measurement of living standards has long underpinned the frequent surveys of consumer goods prices and less frequent microeconomic surveys of household expenditure, which in turn have allowed calculation of poverty and inequality measures themselves often based on an elaborate and sophisticated axiomatic framework (Atkinson and Bourguignon, 2000).

When it comes to micro analysis of individual firms, including financial institutions, conventional business accounts – increasingly harmonized worldwide -- provide a unifying format. To take the case of banks, by simply assembling published financial accounts of the major banks worldwide (and not requiring any special survey effort), a commercial firm (Bureau van Dijk) has produced the large _Bankscope_ database that has been extensively used for analyzing international differences in banking conditions and performance. (More systematic cross-country compilations for various national aggregates of banking institutions are included in the OECD _Profitability of Banks_ publication – though only for 30 industrial countries).

The hallmark of these systems is the attempt to cut through inessential or superficial differences in national concepts by define a reduced set of primitive concepts and provide guidance as to how to map national measures onto the primitive concepts. It is in this spirit that the proposed development of national basic financial access indicators should be seen.

The task of assembling data on financial access and microfinance still awaits its guiding conceptual framework. It is not enough to measure financial service usage. We also need to understand it. To do so, what could be more natural than to distinguish between the demand and supply side of the question? First, of what benefit is financial access; second, what hinders access?

# _The demand side: Benefits of access_

In principle, and given enough knowledge, poor and low income households should be willing to pay for financial services up to the cash equivalent of the services value to them. There will be external benefits also, but the direct benefits are likely to dominate. This is why, although private and public sector perspectives on the benefits of access might initially seem far apart, in reality there is considerable overlap. The commercial financial service provider is primarily concerned to assess willingness to pay. But this in turn depends on the value placed by the household on the financial service in helping its overall welfare – which may often be measured in terms of money income equivalent, especially recognizing that this includes the effects on enhancing household members’ productivity as producers.

The public policymaker might at first sight seem to have a wider perspective. For example, it might seem natural to the public policymaker to organize any discussion of benefits around the Millennium Development Goals (MDGs).<sup>4</sup> Indeed, as has been

> 4 The eight MDGs are in brief: 1. Eradicate extreme poverty and hunger; 2. Achieve universal primary education; 3. Promote gender equality and empower women; 4. Reduce child mortality; 5. Improve

5