Designing a methodology for public finances in a world in transition
In today’s world in transition, public finance is now more than ever characterised by an unprecedented entanglement of multiple structures and actors both on a national and international scope.1 While they have never been as complex, the ways of understanding them remains however one-dimensional, previously based on a legal approach, today on an economic and management basis. As a result, and as is easily illustrated, the decision to spend and to tax is neither absolutely sure nor under control. It is determined by variables that are largely random
in nature, such as economic growth or the responsiveness of society to measures implemented or simply announced, all of which is amplified by the uncertainties of an international society undergoing profound change and generating risks.
Such a context requires instruments for understanding and action adapted to the variety and dynamics of the public financial system; instruments which we lack today despite significant progress in scientific tools used in economics, sociology and management science. Thus it is crucial for the reasons stated to work on a methodology for public financial governance adapted to contemporary societies. It would clearly cover the control of the system but even more so the quality of life of future generations. We therefore have a tremendous responsibility to help develop a way of thinking about public finance that is both coherent and operational beyond the proliferation of false certainties and empty answers that support them and which were supposed to address the turmoil over the past 40 years of a world undergoing transition.
During the past 40 years, and except to adopt a specific prejudice or reassuring ideology, the concepts have been blurred, the words do not always have the same meaning from one person to the next, and no formula has truly succeeded in proving its worth. Surely, there is a multitude of economic, legal, political, management concepts, etc. but none of which take into account the big picture, in a substantive manner, encompassing all components that are in play with the aim of developing a project, a direction for contemporary public finance. The focus should accordingly turn to original, multi-disciplinary scientific work in order understand, guide and manage public finance. Silo thinking juxtaposed for legal, economic, management and even sociological or political areas must cease. Thinking must focus on complexity and uncertainties. It is important to adopt a transversal intellectual attitude otherwise known as systemic2 taking into account the network approach at the foundation of public financial choices. Choices, make no mistake, that are not purely technical but firstly political and structural. It is worth adhering to the idea, altogether very simple, that the budget is fundamentally a political act reflecting values or ideologies, in addition to constraints imposed on everyone. For example, we are well aware that healthcare and pension spending will grow, as will education and research which
are investments for the future and even security which is a concern that is expected to last and which will be costly. For the rest, increasingly difficult choices will have to be made, and this will be essential for all countries across the world. Hence the need and urgency to develop a methodology providing institutions with decision-making help to present to political leaders a consistent image that mirrors as closely as possible the public finance reality enabling them to rely on credible forecasts.
The methodological imperative is furthermore all the more important as public finance constitutes a field where the number culture reigns, rational calculation with, once again, false certainties that the latter is likely to provide them with when the intellectual approach used fails
to take into account their complexity. We are accordingly dealing with an appearance of rationality and objectivity, even a scientific approach that is merely an illusion masking the multi-rationality of the public financial system.
Finally budgets and accounts reflect related actions, as stated, of political choices and answers to these choices can only be relative. There is therefore no absolute objectivity in this case but rather only a meaning shared by a majority of individuals.3 In other words we are at a place that is if not undecidable than certainly at least falsifiable.4 We are accordingly confronted with meanings that may vary from one country to another, from one period to another, from one context to another and moreover subject to multiple interactions. Consequently it is necessary to stabilise a reading grid of the public financial system rooted in the quasi-dogmas5 likely to change over time. By doing so, we provisionally define a certain dynamic balance between concepts that characterise this system and its environment. It would furthermore be relevant and operational to borrow from Chinese philosophy a concept that lacks an appropriate, acceptable or even suitable definition.6 In other words an approach that takes into account the fact that reality is unstable and that it is only valid in a given moment and in a given context. Any other approach leads to getting lost either through sterile simplification or through infinite interpretations, and therefore in the paradox of relativity implicitly established as an absolute the consequence of which results in analyses leading to ill-considered public financial decisions, lacking any real consistency
In the end, it is important to accept that any social reality is polymorphous and polysemous. Regardless of the efforts that we may take to observe the world in the most neutral way as possible, we are still the authors of this reality. In other words, we perceive the world and act on this through the way we are. It is certainly the case for the reality of public finance as it is a human production. It is accordingly the result of our ability to develop complex intelligence as well as meaning that we manage to share on the subject. Admittedly such a reality is not solely the condition of relevant information. It is also the condition of the trust of citizens in their institutions.
1. See Bouvier M., Esclassan M.-C., Lassale J.-P., Manuel de finances publiques (Public finance manual), LGDJ-Lextenso, 15e éd., 2016.
2. See Bouvier M., Les finances locales (Local finance), LGDJ-Lextenso, 16e éd., 2015, p. 260. Also see Bouvier M., L’État sans politique (The State without politics), LGDJ, 1986, preface by Dean Georges Vedel.
3. For example the need to control public spending is currently an idea shared by the majority even though it is contested by certain intellectuals and politicians.
4. See Popper K., La société ouverte et ses ennemis, (Open society and its enemies) Éditions du Seuil, 1979 (2 tomes). See by the same author, La logique de la découverte scientifique (The logic of scientific discovery), éd. Payot, 1973.
5. See Jorion P., Comment la vérité et la réalité furent inventées (How the truth and reality were invented), Éditions Gallimard, 2009.
6. See the works by Jullien F. on Chinese thinking, notably: Le détour et l’accès (Detour and access), Éditions du Seuil, 2010.