How does government meet growing demands with, at best, unchanged resources? The most important task here is to increase the efficiency of government performance. The international Handbook on Public Sector Efficiency, now appearing with the renowned publisher Edward Elgar, covers the entire scope of this dynamic research field. The handbook is aimed at researchers, practitioners and policy-makers who want to understand and improve value for money in the public sector. In his chapter, Michael Thöne explains the central function of high and increasing quality of public finances.

The Saxon state parliament is debating a proposed bill to amend the constitution and establish a "special fund for social balance". In the expert hearing of the Committee on Constitution and Law, Democracy, Europe and Equality, Michael Thöne explains why this proposal would rather aggravate the generation conflict instead of moderating it. Here, the unspecified social consequences of possible crises are to be met with 5 billion euros of additional debt. Such a low-threshold ancillary budget would not only not contribute anything to the major generational tasks of climate, demography, digitalisation and infrastructure. What is more, the present generation would - once again - seek to cushion its present problems with a lot of borrowed money. This would mean one more burden that would be placed on the young and future generations. Watch the livestream of the hearing.

For almost 100 years, the transdisciplinary Arbeitsgemeinschaft für wirtschaftliche Verwaltung e.V. (AWV) has been helping the government and the economy to successfully cope with the demands of continuous changes in tasks and technology in the public sector. With the AWV working group "Public Finances and Sustainability", Michael Thöne discussed the options and problems of linking the German sustainability goals more visibly and authoritatively with the federal budget. In addition to institutional and compliance issues, the focus is on the growing shortage of skilled personnel, as better and more sustainable management of public expenditures must remain readily implementable even with fewer staff.

The Constitutional Court of Schleswig-Holstein has declared the Land's municipal financial equalisation scheme (KFA) unconstitutional in one important respect. Schleswig-Holstein had fundamentally reformed its KFA, which had previously been unconstitutional in many parts, in 2020 on the basis of a FiFo-GGR report. The reform was needed in order to meet the high standard of actual needs-based funding. However, in the financing of central functions, the KFA 2020 resorted to the old solution instead of taking into account the empirical results of FiFo and GGR. According to the current decision, the legislator ought not to have ignored this new scientific "standard of comparison". Here, legal amendments have to be implemented. "Of course, parliaments do not have to adhere to expert recommendations in every detail," states Michael Thöne, "but in the fair allocation of scarce resources according to actual needs, there is little room for political manoeuvring.“

In acute emergency situations such as the corona pandemic or the current energy crisis, the focus of economic policy is on support and rescue. This is primarily the task of the central state. The Länder must support these measures and implement them locally. At the centre of a visionary, evidence-based economic policy of the Länder, however, must lie structural measures aimed at increased immigration, higher productivity and climate neutrality. In this context, as Michael Thöne writes in a statement for the North Rhine-Westphalian parliament, fiscal restrictions and the state's own shortage of skilled staff are forcing the states to also modernise ambitiously.

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