1 In most countries in the world, the legitimacy of decision-making in public finance relies on democratic principles. Indeed, in this domain, Parliament is appointed as the ultimate centre of power, given the observation that throughout the history of parliamentary democracy, parliamentary control in budgetary matters has been identified with Parliament being able to freely define financial policy. Such an approach seems perfectly logical if we accept the principle that the people hold the power that they exercise via their elected representatives.

2 A careful look at contemporary developments in public-finance systems shows, however, that the facts do not always agree with an account of this sort. This is the case to the extent that public finance is at the avant-garde of a process of transformation of the State and perhaps of the democratic tradition. Indeed, public finance today is developing and shaping organizational forms which oscillate between two types of governance : a political version, drawing its legitimacy from the people’s vote, and a managerial version, the legitimacy of which is based on the effectiveness of action or performance.

3 This second dimension, which originates from interest in controlling public spending in relation to the successive economic crises of the last thirty-five years, is currently booming. There has thus, on the back of globalization, been a noticeable connection between political decision-makers and experts in the control of finance management, which cannot be without consequences on the future development of parliamentary democracy.

4 The process is not recent and can be detected retrospectively in the changes undergone by the public finance system over more than thirty years. These changes have developed, in a spectacular manner at times, all over the world since the late 1970s and include, to mention only the strongest characteristics of the movement : internalization and decentralization of public-finance networks ; methods of management and evaluation of results borrowed from corporate management and adapted for use in the public sector; generalization of the idea that the State needs to withdraw to make way for the economic and financial market. This period has also witnessed the birth of new private and public, local and international decision-making centres, the practices, rules and conceptual frameworks of which have become more and more similar; they have led to a displacement of the frontiers between public and private sectors and even to difficulties in defining the former whether economically or legally.

5 Today, the factors behind such developments go way beyond State borders. The transformations as well as the future of public-finance institutions are decided, to a great extent, at global level in a complex interplay of strategies which are taking shape in the context of new regulations.

6 Thus, the reform of public finance and, therefore, of the State, today no longer takes place simply from a national perspective. An approach limited to this single dimension would be incomplete and fail to acknowledge the imperatives stemming from globalization. Quite different regulations are being established in this new context. The reorganization of the international financial system in fact implies a reorganization of national financial institutions and vice versa. And it is indeed through this joint evolution that the issue of the transformation of democracy and the future of political power is raised.

7 In the international framework that is henceforth the common law framework in which the problems of public governance unfold, the rise of a new alliance between experts and politicians is obvious for all to see and needs to be addressed. It is particularly present in the field of public finance and touches an essential area, that of the legitimacy of the institutions which create standards. For several years, we have witnessed a boom in the production of financial standards by independent international bodies which are external to both States and national Parliaments. The phenomenon stems from the idea that it is indispensable for States to adopt standards and to share the same management rationale, which must be completely interiorized and integrated into the way they work to instil self-discipline and enable comparisons.

8 This direction was one of the options followed by international multilateral monitoring at first, [1] with States invited to adhere to codes of good behaviour, the general objective being to ensure obedience of a certain number of universal rules and international references, all of which were more or less quite rightly focussed on an indispensable transparency of public finance.

9 Budgetary standards were the first concerned, leading to a number of States becoming involved in setting up a nomenclature based on programmes. Now it is the turn of public accounting standards to come under discussion and be subject to proposals within the framework of an independent international organization, the IPSAS [2] Board, which was created by the International Federation of Accountants (IFAC). IPSAS take a lot of their inspiration from the standards applicable to the private sector (IFRS), which raises a number of difficulties due to the particular nature of the State and public management.

10 In fact, management of the State and the public sector in general cannot, as we know, be wholly assimilated with that of a business. [3] It is differentiated from the latter notably with regard to the attributes of sovereignty which are expressed by the right to raise taxes, but also by the duty to perform numerous functions which are in the interest of all. These aspects do not slot easily into a private accounting rationale including, as its highpoint, a balance sheet where the assets and liabilities are often of a different nature than those in the public sector. On the other hand, it is absolutely necessary for government offices to achieve transparent and efficient management. Such a goal therefore means we need to examine not only the standards and methods to be employed, but also the definition of the public domain and what lies within it. This links to a second necessity, that of managing to restore a global, integrated and honest image of public accounts as a whole, or in other words of consolidating the data. [4] The Council of the European Union was thinking along the same lines when it adopted a directive on 8 November 2011 defining the requirements applicable to the budgetary frameworks of Member States. [5]

11 The subject has moreover become a hot topic since the publication of the directive. According to the text, by 31 December 2013, Member States need to establish “appropriate mechanisms of coordination across sub-sectors of general government to provide for comprehensive and consistent coverage of all sub-sectors of general government in fiscal planning, country-specific numerical fiscal rules, and in the preparation of budgetary forecasts”.

12 These new requirements necessarily lead to needing to revise the boundaries of the public sector and therefore examining what the public sphere is or should be and defining a new common meaning. The accounting issue thus constitutes an essential mooring point for the redefinition of the State’s sphere of action and, more broadly, of that area which, today, we hesitate in calling the public sector, or public services, or the public service.

13 Make no mistake : by way of questions relative to accounting techniques, it is a real social and political choice which lies beneath. This is why beginning by limiting ourselves to an enquiry focussed purely on legal modalities or those of accounting techniques enabling the adaptation of private-sector standards to public management would amount to thinking backwards. Indeed, it would be pointless to want to ask public administrative or financial law or economic theories to help resolve an issue which is primarily of a political order, since it concerns the configuration of a social relationship. This approach can only remain sterile given that over the last few years public law itself has, without cease, been examining its future and the pertinence of its interpretations and standards, which have been clouded by the rise in the power of the private sector and the withdrawal of the State over the last thirty-five years. Economy and management, for their part, by progressively imposing their concepts on politics, [6] also reveal their limitations in resolving the crises which are now following one after the other at an accelerated rhythm.

14 In my view, what is needed first is a global enquiry. We are faced not only with an economic and financial crisis, but also with a crisis in public law, the translation of which is the withdrawal of institutions and the spread in the domain of contractual practices. [7] Public finance and public finance law in particular are at the forefront of this development.

15 As I remarked in an earlier article of this Revue, [8] barely ten years ago, what needs developing, first and foremost, is a political enquiry in the fullest sense of the word. The recent remarks made by the First President of the Court of Accounts, Didier Migaud, at his Senate hearing on 22 May last, seem to head in the same direction when he considers, in relation to the IPSAS, [9] that it is “(his) duty to alert national Representatives to (a) subject, the implications of which are both political and technical… I hope that the politicians in charge do not wake up too late”. [10]

16 Indeed, without watchful attention from the outside, the phenomenon might pass by completely unobserved. Exactly ten years ago this Revue also alerted readers to the phenomenon of delocalization of financial standards and the ensuing risks for democracy. [11] It was emphasized at the time that the phenomenon “does not display any fundamental change as far as political decision-making is concerned; the façade stays the same and Parliament is still, in everyone’s eyes, the centre of the process. In practice, public-finance standards, which are not simple techniques but reflect and create a type of social relationship, or in other words a way of organizing society, are nevertheless being created within a framework that is external to the political system. What we are witnessing here is a delocalization of the production of standards as well as a confusion of the levels of power, which raises the issue of the legitimacy of the origins of these new standards.”

17 The future of public finance and of the State is currently at stake within a context of trade globalization as well as a risk of eventually doing away with politics in the sense we understand it today. Everyone can see the gradual gestation of a different way of understanding politics, as part of “the fact of transcribing everything that belonged to the imagination, dreams, ideals and utopia into technical and operational reality”. [12] This evolution is only, however, in its early stages. That is why it can be considered still to depend on the choice of political decision-makers. Nevertheless, the options they have before them are few : either they can follow the path of a predominantly technical approach to public finance and will therefore be led to leave it to experts in financial matters; or they can turn to a combination of technical and political approaches by seeking to develop new parliamentary control of public finance, as if returning to the origins of democracy. This path, although difficult, is certainly the only one able to protect us from the risk of doing away with politics.