Financial management for public administrations: developments and tools

For many years there has been a lack of scholarly interest in how financial management works in public administrations. Possible explanations for this may be found in the rules and working practices that have marked the dynamics of finance in public administration. In the present chapter, the evolution towards the development of a financial management tools and skills are presented and discussed. In particular, paragraph 2.1 reviews the evolution of financial management for public administrations. Paragraph 2.2 describes the determinants of financial needs for public administrations, drawing a distinction between “core/characteristic” financial-operation management and “non-core/ancillary” financial operation management. Paragraph 2.3 discusses the “traditional” public financing strategies (taxation, price and tariffs, funds transfer, borrowing, issuing bonds, loans). Paragraph 2.4 presents the “innovative” public funding strategies (active debt management, leasing, securitization, mutual funds).