Public Finance – An Essential Condition for Sustainable Development

A functioning public finance system is vital to allow the state to provide its citizens with public services. Citizens and companies profit from efficient, fair public revenue collection and the targeted, sustainable use of these funds.

External financial auditing by parliaments and supreme audit institutions enables abuses, improper and inappropriate conduct and cases of fraud to be identified, thus allowing governments to be called to account for the use of funds. This creates the basis for a viable relationship between citizens and the state.

In close collaboration with finance ministries, parliaments and supreme audit institutions, we assist our partner countries on behalf of the Federal Ministry for Economic Cooperation and Development (BMZ) in reforming their state finances both at national and subnational level. In doing so, we take our lead from the principles of Good Financial Governance (GFG).

GFG means that state action in the field of public finances – both revenue collection and the use of funds – is transparent, legitimate and development oriented. This includes efficient, accountable state institutions and financial administrations acting within the rule of law, functioning supreme audit institutions and control mechanisms enshrined in policy and society.