public finances

from Wikipedia, the free encyclopedia

With public finance all the economic activities of the state and its governmental subdivisions are referred to revenue and expenditure lead.

This is also used to designate a university subject that is an essential part of economics and business studies.


The attribute “public” indicates that the term only covers those financial activities that can be assigned to the public sector . This includes the state with its public finances and its subdivisions down to public companies . In the case of legal entities under public law - in the cameral system - income and expenditure in a public budget are compared. The public budget represents the central element of public finances at all government levels. The top level is made up of government finances.

Scope of terms

In the narrow sense, public finance includes all dispositions of funds (i.e. payment transactions) in which one or both partners belong to the public sector because of budget management. In a broader sense, it includes their disposal of other economic assets (land, public holdings) and personnel ( public service ) (business management). With such dispositions, the state fulfills its diverse supply, protection or development tasks of services of general interest , but by influencing them, other non-state actors also pursue their particular goals.

The public sector includes the federal government federal , states , municipalities and associations of municipalities as local authorities. There are also communal purpose associations and public companies (communal municipal enterprises , publicly owned enterprises and special funds that are made independent organizational and budgetary unincorporated) as well as state and federal direct corporations and public institutions . Public finances also include social insurance as a public corporation, whose budget volume makes up around 50% of the budget volume of all regional authorities. Some public companies are run under private law (such as Deutsche Bahn AG ). Added to this are the financial activities of supranational bodies (especially the EU) and other organizations.

State influence through public finances

The public sector's ability to act and influence is largely determined today by its power of disposal over money , because it represents - alongside the law - the most important control medium of a state. The state budget is the most important instrument for the implementation of political goals because it is the greatest economic and political instrument Influence on one's own economy. Its expenses determine the extent to which political goals ( social security , internal security , national defense ) are to be financially implemented. This also decides which inhibiting, neutral or promoting effects on the economy and economic growth will emanate from the budget. This is especially true in the case of budget consolidation . As a “tax state”, it absorbs a large part of the economic purchasing power without any direct consideration , usually with the help of its sovereign state , and uses it for the production of goods and services (“general interest”) as well as for transfer payments to companies and private households. These redistribution processes are also an integral part of public finance. This also applies to financial equalization as a system of redistribution within state subdivisions.

The majority or full participation of the state and its subdivisions in public companies organized under private law ensures it has public influence there through a majority of capital and votes. This public participation is expressly affirmed by federal and state laws; however, it must serve a public purpose (Section 63 BHO). Public influence ensures control over the economic decisions of these companies, which means that they can be included in public finances in the broader sense. Overall, public finances are thus a major influencing factor in the economy.

State quota

How large the volume of public finances is in relation to the total economic power of a state is expressed by the state quota . Statistically, the aggregated total expenditure of all state breakdowns is set in relation to the gross domestic product (GDP). According to this, the government quota of the European countries is lowest in Switzerland with 34.6% and highest in Denmark with 58.3%. Germany ranks in the middle with 47.6% (2009). The list of countries by government debt- to-GDP ratio provides information about government debt as part of public finances as a percentage of GDP.

The overall size of the government quota and the structure of income and expenditure are important for the welfare position of citizens and for the international competitive position of companies. A low government quota shows that the government has little financial influence on an economy and vice versa. A government quota of 0% makes it unlikely that the government would intervene financially in the event of a market failure, and thus make government rescue operations in the event of corporate crises; a quota of 100% equates to despotism . The great importance of public finances in Germany as the basis for economic, financial and monetary policy decisions is evident from the high share of public expenditure in GDP (47.6%). The government quota thus reflects the influence of public finances on the economy as a whole.

Financial statistics

Public finances play an essential role for statistical purposes. The term public finances can be quantified more precisely by summarizing and comparing certain aggregates .

On the basis of the Finance and Personnel Statistics Act of December 21, 1992, the Federal Statistical Office also aggregates the Bundesbank, state and municipal funds and companies in public and private legal form (with more than 50% public participation) when collecting public finances. It is explained that public funds, institutions and companies are created through the outsourcing of tasks from the core budgets of the regional authorities (federal, state, municipal / municipal associations) through start-ups or through the acquisition of shares.

The Deutsche Bundesbank uses the term public finances in its statistics to summarize the general government budget, the state budgets, the budgets of the regional authorities and the social security funds. It examines the revenue, expenditure and deficit ratios of public budgets (as a percentage of GDP) and the aggregates on which they are based (tax revenue and expenditure structures at all levels). The Bundesbank is based on the narrower term, which does not extend to public companies.

Swiss and Austria

In Switzerland, too, public finances are statistically subdivided into the state, federal government, cantons , communes and social insurance and broken down according to income, expenditure, financing result and debt ratio (Maastricht definition).

In Austria, public finances cover the management statistics and parts of the national accounts. In the management statistics, income, expenditure, staff numbers and balance sheet data of the regional authorities (federal, state, municipal and municipal associations), social security agencies and numerous extra-budgetary units are processed. In Austria, management is the term for the estimate or preparation of a budget .


  • Charles B. Blankart: Public Finances in Democracy. An introduction to finance . November 2005, Vahlen, ISBN 3-8006-3251-9
  • Ralf Kronberger: Public Finances in Austria - How Does the State Operate? , 2005, in: Current Documents, Economy and Society, No. 49/2005, Vienna: Working Group for Economy and School

Web links

Individual evidence

  1. Herbert Wiesner / Bodo Leibinger / Reinhard Müller, Public Finance , 2008, p. 44
  2. ^ Rudolf Goldscheid, Staatssozialismus und Staatskapitalismus , 1917, pp. 40 ff .; demanded decidedly to break with the system of the tax state
  3. Law on Statistics of Public Finances and Public Service Personnel (Finance and Personnel Statistics Act - (FPStatG)) (PDF file; 43 kB)
  4. Page no longer available , search in web archives: Deutsche Bundesbank, Monthly Report February 2012 , p. 59 ff.@1@ 2Template: Toter Link /
  5. Swiss Statistics, Swiss Financial Statistics 2010, Interim Report of April 27, 2012 ( Memento of the original of November 16, 2012 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. @1@ 2Template: Webachiv / IABot /
  6. ^ Statistics Austria, Public Finances