5 - History (IV): Public Finance in the Modern State

Summary

This chapter explains the further development throughout the twentieth century of public finance law and its impact on the distribution of financial authority between parliaments, executives and judiciaries. It accounts for the delegation of ever-greater financial authority to executive governments as a result of a number of major events: the world wars, the growth of the welfare state, the development of central banking and the influence of private-sector managerial philosophies on public administration. Taking a broad sample of Australia, Canadian, New Zealand and UK legislation and judicial doctrine, the chapter describes how and why sovereign borrowing was severed from parliamentary processes, the preponderance of public expenditure came to be authorised by standing (rather than annual) appropriation legislation, central banks acquired independent authority to provide monetary finance to treasuries and how public auditing functions became more concerned with the efficient (rather than lawful) use of public money. The manner in which judiciaries' jettisoned their private-property protecting attitude to taxation legislation is also explained.