## 1. Adoption of Double-Entry Bookkeeping by Selected European Governments

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---

### Major themes and chapter structure
- Chapter title: "1. Adoption of Double-Entry Bookkeeping by Selected European Governments" (page 15).
- Related chapter listed: "2. Early Publication of Budgets or Accounts" (page 29).
- Figures referenced:
  - Figure 1: "England: Index of the Real Price of Books, 1300–1860"
  - Figure 2: "United Kingdom: Public Debt, 1692–2010"

### Overview: purpose, scope, and definitional points
- Purpose:
  - Explain how fiscal transparency evolved over time and how modern openness about public finances emerged from earlier fiscal secrecy.
- Scope:
  - Considers Western Europe as defined by the IMF.
- Key definitional points:
  - Fiscal transparency requires that a government publish clear, relevant, and reliable information on public finances (past, present, and future) but does not require public discussion of every policy detail or every financial transaction.
  - Fiscal transparency also requires that clear, relevant, and reliable information exist (quality matters), including practices such as double-entry bookkeeping that link operating statements to preceding and succeeding balance sheets.
- Three determinants of fiscal transparency:
  - The technology of information and communication (writing, paper, printing, the Internet).
  - The sharing of power (democracies or broad oligarchies versus concentrated monarchical power).
  - Prevailing political theories (e.g., Enlightenment ideas favoring accountable government).
- Historical pattern note:
  - The history of fiscal transparency has not been continual increase; periods of transparency have been followed by opacity.

### Historical evidence of fiscal accountability practices
- Ancient Greece and Rome:
  - Athens (fifth and fourth centuries BCE):
    - Direct democracy with public debate and voting on public spending.
    - Public officials subject to a two-part public audit: a financial audit by ten accountants (logos) and a general conduct review by ten “straighteners” (euthyna).
    - Public accounts were sometimes set in stone in public places.
  - Intellectual legacies:
    - Aristotle advocated duplication and independent audit: “the transfer of revenue should be made at a general assembly of the citizens, and duplicates of the accounts deposited with the different brotherhoods, companies, and tribes . . .” and “there must of necessity be another office which examines and audits them, and has no other functions.”
    - Plato allowed arguments for concealing information (rulers might lie for the benefit of the city).
  - Rome:
    - During the Republic, spending decisions approved by the senate; imperial period saw some public disclosure (Augustus’s will, Caligula’s published accounts) and audits, but concentration of power in the emperor reduced accountability.

- Medieval Northern Italian city-states (from c.1100):
  - Cities such as Florence, Genoa, Milan, Modena, Pisa, and Siena governed by councils and short-term administrators who underwent audits before leaving office; in some cases final salary payment withheld until acquittal at audit.
  - Modena: records including accounts stored where they could be viewed and copied by the public.
  - Institutional innovations and diffusion:
    - Adoption of Hindu-Arabic numerals (Leonardo of Pisa, c.1170–1250) improved mathematical operations for fiscal analysis.
    - Development and government adoption of double-entry bookkeeping:
      - Genoa: decree in 1327 to make a ledger “after the manner of banks”; surviving double-entry records from c.1340.
      - Governments required prenumbered pages and forbade erasure to combat fraud.

### Parliamentary scrutiny, absolutism, and secrecy (1200s–1700s)
- Medieval parliamentary scrutiny of royal accounts:
  - Parliaments could insist that no new taxes be levied without their consent and sought rights to inspect royal accounts.
  - Examples:
    - England: Magna Carta (1215) established principle that certain taxes could not be imposed without “the common counsel” of the realm.
    - Spain (Castile and Catalonia) in the 1200s–1400s: parliaments scrutinized accounts; Castile removed a finance minister in 1329 for abuses; Catalonia in 1359 appointed 12 deputies and 12 auditors (4 from each of the 3 orders) to administer spending while parliament was not in session.
  - Result: where parliaments were strong they advanced fiscal scrutiny and administrative supervision.
- Absolutism and fiscal secrecy in the 1600s and 1700s:
  - Political doctrine and practice:
    - Monarchs claimed absolute power and exemption from accountability (examples and quotations preserved verbatim: James I’s “God’s lieutenants on earth”; royal law of Denmark 1665; Louis XV declaration in 1766: “It is in my person alone that sovereign power resides . . .”).
    - Political theorists (Bodin, Bossuet, Filmer, Hobbes) often supported absolutism; some qualified (Bodin) and some uncompromising.
    - Advice to conceal affairs of state was common (Machiavelli, Filmer’s “Such arcana imperii [secrets of state], or cabinet councils, the vulgar may not pry into.”).
  - Institutional consequences:
    - Decline of parliaments’ powers in many countries; extensive secrecy about royal finances (examples include Spain, Portugal, Lombardy, Piedmont-Sardinia, Tuscany, France).
    - Explicit prohibitions on public discussion of finances: Louis XV’s 1764 prohibition against publishing anything about reform or administration of royal finances.
  - Accounting practice:
    - Double-entry bookkeeping spread but was often applied mainly to tax collection and sometimes abandoned; barriers to adoption included opposition due to its control-enhancing effects, lack of trained accountants, and perceived complexity or cost.

- British parliamentary demands for information in the 1600s:
  - Context: resistance to taxation without representation and theoretical critiques of absolutism (Locke, Milton).
  - Parliamentary assertions and statutes (verbatim preserved dates and acts):
    - 1610: House of Commons claimed right to discuss revenue from certain taxes the king could levy without parliamentary approval (Petition of Right, 1610).
    - 1624: Subsidy Act required spending to be approved by a commission accountable to parliament.
    - 1628: Petition of Right asserted king could levy no taxes or forced loans without its consent.
    - 1665: Act required the king to keep accounts in a specified manner and gave lenders right to view accounts during business hours.
    - 1667 and post-Glorious Revolution (1688): commissions to investigate the king’s accounts and strengthened parliamentary auditing rights; Bill of Rights (1689) declared levying money for the Crown without grant of Parliament illegal.
  - Role of creditors: loan designs and creditor rights increased demand for account scrutiny.
  - Limits on public transparency:
    - Parliamentary proceedings often secret under parliamentary privilege; Votes and Proceedings printed from the 1680s but in practice not available to public.
    - Government did not present a full statement of receipts and payments until 1802; only in the 1850s were gross government spending and revenue shown.

### The French case: Necker’s 1781 report and consequences
- Drivers of change in the late 1700s:
  - Falling costs of information dissemination (paper, printing), rising literacy, growth of newspapers and coffee-houses, improved roads.
  - Growing public debt burdens and governments’ need to borrow from creditors and taxpayers.
  - Enlightenment-era political thought favoring publicity and accountability (Rousseau, Condorcet, Turgot; Hume emphasized institutional checks including inspection of public accounts).
- Necker’s 1781 publication:
  - Jacques Necker, former banker and French finance minister, published a report on “normal revenues and spending” in 1781; the publication was intended to improve the government’s ability to borrow.
  - Key preserved quotations from Necker:
    - “another cause of England’s great credit is, without doubt, the publicity to which the state of its finances is submitted. Each year, the accounts are presented to parliament and then printed . . .”
    - “I acknowledge that we have sometimes profited from the veil spread over public finances . . . But this passing advantage . . . has soon been followed by unhappy transactions . . .”
  - Effects and reception:
    - Necker’s report was a best seller in French and translated into Danish, Dutch, English, German, and Italian.
    - It inspired publication of further fiscal information (including historical data) in France.
    - It faced opposition within government; Necker resigned and the next year’s budget was not published.
    - Continued pressure led to publication of accounts later: in 1787 notables demanded to “see the accounts of revenues and expenditures”; the king ultimately agreed that “a statement of revenues and expenditures” would be published every year.
  - Constitutional outcome:
    - In 1789, the Declaration of the Rights of Man and of the Citizen incorporated principles touching on the publicity of government finances.

### Expansion of fiscal transparency, 1760s–1850 (rights and practice)
- Acceptance of transparency principle in the late 1700s:
  - Sweden:
    - Tradition of parliamentary scrutiny of taxes and, from 1719, of government spending.
    - 1766 law relaxed censorship and gave citizens a right to official information of all kinds; stated that no taxes could be levied and no laws passed except by the authority of the parliament and that councilors of state were always accountable to the parliament for the advice that they gave to the king.
    - Law repealed in 1772, but the principle of openness about public finances continued to be influential.
    - Six months before the French declaration of the rights of man, a Swedish constitutional amendment proclaimed that “The Swedish people have the incontestable right to discuss and reach agreements with the king on all things concerning subsidies to the state.”
  - Other examples:
    - 1770: Danish government briefly introduced the world’s most radical freedom of the press (applied to Iceland, Norway, and the Faroes).
    - 1783: Joseph II wrote he had to “account to the state as a whole and to each individual” for his use of taxes.
    - Leopold I, Grand Duke of Tuscany (ruled 1765–90) proposed a constitution requiring the minister of finance to submit annual accounts to a parliament.
  - United States:
    - U.S. Constitution (drafted 1787) required publication of government accounts: “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.”
    - “From time to time” was a compromise; George Mason had proposed “annually,” James Madison suggested “from time to time.”
  - Philosophical support:
    - Bentham, Kant and others defended open government; Bentham criticized opponents of openness as a “malefactor,” a “tyrant,” or a “timid or indolent man, who complains of the general incapacity in order to screen his own.”
    - Cultural recognition: German poem: “The magic word before whose power / Even the people’s masters cower … the word—it is publicity.”
- An “avalanche of data,” 1820–1850:
  - France:
    - Routine publication of budgets and accounts began with the restoration of the monarchy after Napoleon’s overthrow in 1814.
    - A finance minister affirmed that “the administration of finances should be so transparent that each taxpayer can, in a sense, judge it like his own finances and observe the journey of his taxes up until the destination for which he paid them.”
  - Europe more broadly:
    - Constitutions introduced in the early or mid-1800s required or implied publicity of budgets and accounts; actual publication often followed, sometimes with long lags.
    - Spain: liberal constitution of 1812 required presentation of budgets and accounts to parliament annually and specified that accounts were to be “printed, published, and circulated”; budgets not actually published until the 1820s and accounts not until the 1850s.
    - Portugal: liberal reforms of the 1820s established principle of fiscal transparency; regular publication occurred in the 1830s.
    - Kingdom of Piedmont-Sardinia: king’s accounts first published in 1848; 1848 constitution provided for budgets and accounts to be presented to parliament (constitution became Italy’s in 1861).
  - By the twentieth century:
    - Even dictatorships published information on finances (examples cited: Portugal and Spain statistical yearbooks from the 1950s and 1960s; Portuguese government budgets from the 1950s; fiscal data in East Germany in the 1970s).
    - Reliability concerns: military spending concealed in East Germany; in Mussolini’s Italy court of auditors’ reports used to advertise successes while accurate information kept confidential.

### Early publication table highlights (constitutional provision vs. actual publication)
- Austria: Constitutional date listed as 1849? Actual publication 1848?
- Belgium: 1831; actual publication 1831?
- Denmark: 1849; actual publication 1830s
- Finland: 1919; actual publication 1862
- France: 1791 (constitutional provision); actual publication 1781
- Germany (Prussia): 1848; actual publication 1848
- Greece: 1822?; actual publication 1835
- Iceland: 1874; actual publication 1850s
- Italy (Piedmont-Sardinia): 1848; actual publication 1848
- Netherlands: 1814; actual publication 1814?
- Norway: 1814; actual publication 1824
- Portugal: 1822; actual publication 1830s
- Spain: 1812; actual publication 1820
- Sweden: 1809; actual publication 1821
- Switzerland: 1849; actual publication 1849
- Notes: Table includes only states in existence now or two major predecessors for Germany and Italy; Ireland and the United Kingdom excluded due to gradual transparency increases; Cyprus, Luxembourg, Malta, and San Marino excluded for lack of information.

### Debates about accounting method and institutional coverage
- Accounting method (commercial vs. other public accounting):
  - Bentham objected to adoption of commercial accounting for governments in the 1820s, criticizing its “abstruse terminology” as “utterly unintelligible” to most.
  - Thomas Jefferson wished “the finances of the Union [were] as clear and intelligible as a merchant’s books, so that every member of Congress, and every man of any mind in the Union, should be able to comprehend them, to investigate abuses, and consequently to control them.”
  - Since the 1990s several European governments (Austria, Denmark, Finland, France, Iceland, Spain, Sweden, Switzerland, and the United Kingdom) began adopting accrual accounting similar to firms.
- Institutional coverage of fiscal information:
  - Alexis de Tocqueville (1830s) lamented absence of data for local governments preventing compilation of total government figures.
  - Modern macroeconomic statistics divide the economy into sectors including the government sector (central, local, and provincial governments), enabling consolidated government-sector data—important for Europe, especially since the late 1990s for EU debt and deficit rules.

### Conclusions: current state, shortcomings, and prospects
- Present situation:
  - Public fiscal reporting in Western Europe is “impressively extensive”: budgets published, execution reported during the year, and audited end-of-year accounts published.
  - Fiscal statistics provide a comprehensive picture of the government sector; medium- and long-term fiscal forecasts and narrative discussions of public finances are commonly available.
- Shortcomings relative to Enlightenment hopes:
  - Need for plain-language summaries of public finances remains unmet in some cases.
  - Technical gaps: some European governments do not publish financial statements that include both accrual- and cash-based statements of fiscal flows and a balance sheet of fiscal stocks, making it difficult or impossible to find information on nonfinancial assets, pension liabilities, or derivatives.
  - Lack of data on consolidated finances of the public sector (which includes government-owned businesses) in most European countries; governments can use such businesses to carry out spending without it showing up in government accounts.
- Prospects for improvement:
  - Evidence suggests further improvements in fiscal transparency are likely due to:
    - Continued prominence of accountability and transparency in political discourse.
    - Fiscal pressures on many Western European states creating pressure for improved budgets, accounts, and fiscal statistics.
    - Falling costs of storing, analyzing, and transmitting information (computerized accounting systems and Internet publication) which may:
      - Eliminate some costs that historically favored summarized annual presentations.
      - Lead eventually to real-time estimates of deficits and debts.
      - Enable publication of much more detailed information that users can organize and summarize as they choose.

*Source: _wp13219 - 1. Adoption of Double-Entry Bookkeeping by Selected European Governments*

### 1. Adoption of Double-Entry Bookkeeping by Selected European Governments ..................15

### 1. Adoption of Double-Entry Bookkeeping by Selected European Governments

### Major themes and chapter structure
- Chapter title: "1. Adoption of Double-Entry Bookkeeping by Selected European Governments" (page 15).
- Related chapter listed: "2. Early Publication of Budgets or Accounts" (page 29).

### Figures referenced in the unit
- Figure 1: "England: Index of the Real Price of Books, 1300–1860".
- Figure 2: "United Kingdom: Public Debt, 1692–2010".

*Source: _wp13219 - 1. Adoption of Double-Entry Bookkeeping by Selected European Governments ..................15*

### References .............................................................................................................

### _wp13219 - References .............................................................................................................

### Overview
- Purpose: explain how fiscal transparency evolved over time and how modern openness about public finances emerged from earlier fiscal secrecy.
- Scope: considers Western Europe as defined by the IMF.
- Key definitional points:
  - Fiscal transparency requires that a government publish clear, relevant, and reliable information on public finances (past, present, and future) but does not require public discussion of every policy detail or every financial transaction.
  - Fiscal transparency also requires that clear, relevant, and reliable information exist (quality matters), including practices such as double-entry bookkeeping that link operating statements to preceding and succeeding balance sheets.
- Three factors identified as determinants of fiscal transparency:
  - The technology of information and communication (writing, paper, printing, the Internet).
  - The sharing of power (democracies or broad oligarchies versus concentrated monarchical power).
  - Prevailing political theories (e.g., Enlightenment ideas favoring accountable government).
- Historical pattern note: the history of fiscal transparency has not been continual increase; periods of transparency have been followed by opacity.

### Fiscal transparency in Ancient Greece and Rome
- Athens (fifth and fourth centuries BCE):
  - Direct democracy with public debate and voting on public spending.
  - Public officials subject to a two-part public audit: a financial audit by ten accountants (logos) and a general conduct review by ten “straighteners” (euthyna).
  - Public accounts were sometimes set in stone in public places.
- Intellectual legacies:
  - Aristotle advocated duplication and independent audit: “the transfer of revenue should be made at a general assembly of the citizens, and duplicates of the accounts deposited with the different brotherhoods, companies, and tribes . . .” and “there must of necessity be another office which examines and audits them, and has no other functions.”
  - Plato allowed arguments for concealing information (rulers might lie for the benefit of the city).
- Rome:
  - During the Republic, spending decisions approved by the senate; imperial period saw some public disclosure (Augustus’s will, Caligula’s published accounts) and audits, but concentration of power in the emperor reduced accountability.

### Accountability in the medieval city-states of Northern Italy
- Timeframe: starting around 1100 in cities such as Florence, Genoa, Milan, Modena, Pisa, and Siena.
- Political arrangements:
  - Cities governed by councils and short-term administrators who underwent audits before leaving office; in some cases final salary payment withheld until acquittal at audit.
  - Modena: records including accounts stored where they could be viewed and copied by the public.
- Institutional innovations and diffusion:
  - Adoption of Hindu-Arabic numerals (Leonardo of Pisa, c.1170–1250) improved mathematical operations for fiscal analysis.
  - Development and government adoption of double-entry bookkeeping:
    - Genoa: decree in 1327 to make a ledger “after the manner of banks”; surviving double-entry records from c.1340.
    - Governments required prenumbered pages and forbade erasure to combat fraud.

### Medieval parliamentary scrutiny of royal accounts
- Parliaments (clergy, nobles, and others) could insist that no new taxes be levied without their consent and sought rights to inspect royal accounts.
- Examples:
  - England: Magna Carta (1215) established principle that certain taxes could not be imposed without “the common counsel” of the realm.
  - Spain (Castile and Catalonia) in the 1200s–1400s: parliaments scrutinized accounts; Castile removed a finance minister in 1329 for abuses; Catalonia in 1359 appointed 12 deputies and 12 auditors (4 from each of the 3 orders) to administer spending while parliament was not in session.
- Result: where parliaments were strong they advanced fiscal scrutiny and administrative supervision.

### Absolutism and fiscal secrecy in the 1600s and 1700s
- Political doctrine and practice:
  - Monarchs claimed absolute power and exemption from accountability (examples and quotations preserved verbatim: James I’s “God’s lieutenants on earth”; royal law of Denmark 1665; Louis XV declaration in 1766: “It is in my person alone that sovereign power resides . . .”).
  - Political theorists (Bodin, Bossuet, Filmer, Hobbes) often supported absolutism; some qualified (Bodin) and some uncompromising.
  - Advice to conceal affairs of state was common (Machiavelli, Filmer’s “Such arcana imperii [secrets of state], or cabinet councils, the vulgar may not pry into.”).
- Institutional consequences:
  - Decline of parliaments’ powers in many countries; extensive secrecy about royal finances (examples include Spain, Portugal, Lombardy, Piedmont-Sardinia, Tuscany, France).
  - Explicit prohibitions on public discussion of finances: Louis XV’s 1764 prohibition against publishing anything about reform or administration of royal finances.
- Accounting practice:
  - Double-entry bookkeeping spread but was often applied mainly to tax collection and sometimes abandoned; adoption timeline (as presented in table form) preserves institutional and date entries verbatim:
    - Italy, Government of Genoa, Introduction c. 1340
    - Italy, Government of Venice, Introduction c. 1400
    - Spain, Royal Treasury, Introduction 1592, Interruption 1621
    - Netherlands, Royal Finances, Introduction 1604, Interruption ?
    - Sweden, General Ledger of Kingdom, Introduction 1623, Interruption 1654, Reintroduction 1659
    - Germany/Austria, Imperial Treasury, Introduction 1703, Interruption 1715, Reintroduction 1760
    - France, Royal Treasury, Introduction 1716, Interruption 1726, Reintroduction 1808
    - Portugal, Royal Treasury, Introduction 1761
    - United Kingdom, Central government, Introduction c. 1829
  - Barriers to adoption included opposition due to its control-enhancing effects, lack of trained accountants, and perceived complexity or cost.

### British parliamentary demands for information in the 1600s
- Context: resistance to taxation without representation and theoretical critiques of absolutism (Locke, Milton).
- Parliamentary assertions and statutes:
  - 1610: House of Commons claimed right to discuss revenue from certain taxes the king could levy without parliamentary approval (Petition of Right, 1610).
  - 1624: Subsidy Act required spending to be approved by a commission accountable to parliament.
  - 1628: Petition of Right asserted king could levy no taxes or forced loans without its consent.
  - 1665: Act required the king to keep accounts in a specified manner and gave lenders right to view accounts during business hours.
  - 1667 and post-Glorious Revolution (1688): commissions to investigate the king’s accounts and strengthened parliamentary auditing rights; Bill of Rights (1689) declared levying money for the Crown without grant of Parliament illegal.
- Role of creditors: loan designs and creditor rights increased demand for account scrutiny.
- Limits on public transparency:
  - Parliamentary proceedings often secret under parliamentary privilege; Votes and Proceedings printed from the 1680s but in practice not available to public.
  - Government did not present a full statement of receipts and payments until 1802; only in the 1850s were gross government spending and revenue shown.

### The French government’s 1781 report on public finances
- Drivers of change in the late 1700s:
  - Falling costs of information dissemination (paper, printing), rising literacy, growth of newspapers and coffee-houses, improved roads.
  - Growing public debt burdens and governments’ need to borrow from creditors and taxpayers.
  - Enlightenment-era political thought favoring publicity and accountability (Rousseau, Condorcet, Turgot; Hume emphasized institutional checks including inspection of public accounts).
- Necker’s 1781 publication:
  - Jacques Necker, former banker and French finance minister, published a report on “normal revenues and spending” in 1781; the publication was intended to improve the government’s ability to borrow.
  - Key preserved quotations from Necker:
    - “another cause of England’s great credit is, without doubt, the publicity to which the state of its finances is submitted. Each year, the accounts are presented to parliament and then printed . . .”
    - “I acknowledge that we have sometimes profited from the veil spread over public finances . . . But this passing advantage . . . has soon been followed by unhappy transactions . . .”
  - Effects and reception:
    - Necker’s report was a best seller in French and translated into Danish, Dutch, English, German, and Italian.
    - It inspired publication of further fiscal information (including historical data) in France.
    - It faced opposition within government; Necker resigned and the next year’s budget was not published.
    - Continued pressure led to publication of accounts later: in 1787 notables demanded to “see the accounts of revenues and expenditures”; the king ultimately agreed that “a statement of revenues and expenditures” would be published every year.
- Constitutional outcome:
  - In 1789, the Declaration of the Rights of Man and of the Citizen incorporated principles touching on the publicity of government finances.

*Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2013/_wp13219.pdf*

### 14. All citizens have the right to ascertain, personally or though their representatives,

### 14. All citizens have the right to ascertain, personally or though their representatives,

### Enumerated rights
- "the necessity of the public tax"
- "to consent to it freely"
- "to know how it is spent"
- "to determine its amount, basis, mode of collection, and duration"

### Structure of entitlement
- Right applies "personally or though their representatives"
- Rights cover both approval ("to consent to it freely") and oversight ("to know how it is spent")
- Rights extend to specification of tax characteristics: "amount, basis, mode of collection, and duration"

*Source: _wp13219 - 14. All citizens have the right to ascertain, personally or though their representatives,*

### 15. Society has the right to demand that every public agent give an account of his

### 15. Society has the right to demand that every public agent give an account of his

### Acceptance of the principle of transparency in the late 1700s
- Late 1700s saw strong support for the principle of fiscal transparency across much of Europe and beyond.
- Sweden:
  - Tradition of parliamentary scrutiny of taxes and, from 1719, of government spending.
  - 1766 law relaxed censorship and gave citizens a right to official information of all kinds; stated that no taxes could be levied and no laws passed except by the authority of the parliament and that councilors of state were always accountable to the parliament for the advice that they gave to the king.
  - Law repealed in 1772, but the principle of openness about public finances continued to be influential.
  - Six months before the French declaration of the rights of man, a Swedish constitutional amendment proclaimed that “The Swedish people have the incontestable right to discuss and reach agreements with the king on all things concerning subsidies to the state.”
- Absolutist governments and enlightened despots showed influence:
  - 1770: Danish government briefly introduced the world’s most radical freedom of the press (applied to Iceland, Norway, and the Faroes).
  - 1783: Joseph II wrote he had to “account to the state as a whole and to each individual” for his use of taxes.
  - Leopold I, Grand Duke of Tuscany (ruled 1765–90) proposed a constitution requiring the minister of finance to submit annual accounts to a parliament.
- United States:
  - U.S. Constitution (drafted 1787) specifically required publication of government accounts: “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time.”
  - “From time to time” was a compromise; George Mason had proposed “annually,” James Madison suggested “from time to time.”
- Philosophical support:
  - Bentham (1748–1832) defended open government despite criticizing some revolutionary rhetoric; characterized opponents of openness as a “malefactor,” a “tyrant,” or a “timid or indolent man, who complains of the general incapacity in order to screen his own.”
  - Kant (1724–1804) defended citizens’ freedom to discuss taxation and suggested policies were just only if they could withstand publicity.
- Cultural recognition:
  - A circulated German poem summarized the perceived power: “The magic word before whose power / Even the people’s masters cower … the word—it is publicity.”

### An “avalanche of data,” 1820–1850
- Fiscal transparency broadened in practice between about 1820 and 1850, an “avalanche” of fiscal data.
- France:
  - Routine publication of budgets and accounts began with the restoration of the monarchy after Napoleon’s overthrow in 1814.
  - A finance minister affirmed that “the administration of finances should be so transparent that each taxpayer can, in a sense, judge it like his own finances and observe the journey of his taxes up until the destination for which he paid them.”
- Europe more broadly:
  - Constitutions introduced in the early or mid-1800s required or implied publicity of budgets and accounts; actual publication often followed, sometimes with long lags.
  - Spain: liberal constitution of 1812 required presentation of budgets and accounts to parliament annually and specified that accounts were to be “printed, published, and circulated”; budgets not actually published until the 1820s and accounts not until the 1850s.
  - Portugal: liberal reforms of the 1820s established principle of fiscal transparency; regular publication occurred in the 1830s.
  - Kingdom of Piedmont-Sardinia: king’s accounts first published in 1848; 1848 constitution provided for budgets and accounts to be presented to parliament (constitution became Italy’s in 1861).
- By the twentieth century:
  - Even dictatorships published information on finances (examples cited: Portugal and Spain statistical yearbooks from the 1950s and 1960s; Portuguese government budgets from the 1950s; fiscal data in East Germany in the 1970s).
  - Reliability concerns: military spending concealed in East Germany; in Mussolini’s Italy court of auditors’ reports used to advertise successes while accurate information kept confidential.

### Early publication table highlights (constitutional requirement vs. actual publication)
- Austria: Constitutional date listed as 1849? Actual publication 1848?
- Belgium: 1831; actual publication 1831?
- Denmark: 1849; actual publication 1830s
- Finland: 1919; actual publication 1862
- France: 1791 (constitutional provision); actual publication 1781
- Germany (Prussia): 1848; actual publication 1848
- Greece: 1822?; actual publication 1835
- Iceland: 1874; actual publication 1850s
- Italy (Piedmont-Sardinia): 1848; actual publication 1848
- Netherlands: 1814; actual publication 1814?
- Norway: 1814; actual publication 1824
- Portugal: 1822; actual publication 1830s
- Spain: 1812; actual publication 1820
- Sweden: 1809; actual publication 1821
- Switzerland: 1849; actual publication 1849
- Notes: Table includes only states in existence now or two major predecessors for Germany and Italy; Ireland and the United Kingdom excluded due to gradual transparency increases; Cyprus, Luxembourg, Malta, and San Marino excluded for lack of information.

### Debates about the details
- As secrecy declined, fiscal transparency lost some political salience but technical and scope debates intensified.
- Two illustrative debates:
  1. Accounting method (commercial vs. other public accounting):
     - Bentham objected to adoption of commercial accounting for governments in the 1820s, criticizing its “abstruse terminology” as “utterly unintelligible” to most.
     - Thomas Jefferson wished “the finances of the Union [were] as clear and intelligible as a merchant’s books, so that every member of Congress, and every man of any mind in the Union, should be able to comprehend them, to investigate abuses, and consequently to control them.”
     - Over time, improvements in corporate reporting, investor pressure, government regulation, and accounting standards led to more reliable and uniform reporting by firms; since the 1990s several European governments (Austria, Denmark, Finland, France, Iceland, Spain, Sweden, Switzerland, and the United Kingdom) began adopting accrual accounting similar to firms.
  2. Institutional coverage of fiscal information:
     - Alexis de Tocqueville (1830s) sought to compare tax burdens in France and America and lamented absence of data for U.S. towns and counties and for French communes, preventing compilation of total government figures.
     - Modern macroeconomic statistics divide the economy into sectors including the government sector (central, local, and provincial governments), enabling consolidated government-sector data—important for Europe, especially since the late 1990s for EU debt and deficit rules.

### Conclusions: current state and prospects
- Present situation:
  - Public fiscal reporting in Western Europe is “impressively extensive”: budgets published, execution reported during the year, and audited end-of-year accounts published.
  - Fiscal statistics provide a comprehensive picture of the government sector; medium- and long-term fiscal forecasts and narrative discussions of public finances are commonly available.
- Shortcomings relative to Enlightenment hopes:
  - Need for plain-language summaries of public finances remains unmet in some cases.
  - Technical gaps: some European governments do not publish financial statements that include both accrual- and cash-based statements of fiscal flows and a balance sheet of fiscal stocks, making it difficult or impossible to find information on nonfinancial assets, pension liabilities, or derivatives.
  - Lack of data on consolidated finances of the public sector (which includes government-owned businesses) in most European countries; governments can use such businesses to carry out spending without it showing up in government accounts.
- Prospects for improvement:
  - Evidence suggests further improvements in fiscal transparency are likely due to:
    - Continued prominence of accountability and transparency in political discourse.
    - Fiscal pressures on many Western European states creating pressure for improved budgets, accounts, and fiscal statistics.
    - Falling costs of storing, analyzing, and transmitting information (computerized accounting systems and Internet publication) which may:
      - Eliminate some costs that historically favored summarized annual presentations.
      - Lead eventually to real-time estimates of deficits and debts.
      - Enable publication of much more detailed information that users can organize and summarize as they choose.

*Source: _wp13219 - 15. Society has the right to demand that every public agent give an account of his*

### References

### _wp13219 - References

### Political theory, constitutionalism, and public discourse
- Aristotle, 1996, The Politics and the Constitution of Athens, ed. Stephen Everson, (Cambridge: Cambridge University Press).
- Bentham, Jeremy, 1843 (ed. John Bowring), The Works of Jeremy Bentham (Edinburgh: William Tate).
- Bentham, Jeremy, 1999, Political Tactics, ed. Michael James, Cyprian Blamires, and Catherine Pease-Watkin (Oxford: Clarendon Press).
- Burke, Edmund, 1987, Reflections on the Revolution in France, ed. J. G. A. Pocock (Indianapolis: Hackett).
- Condorcet, 1847, “Fragments sur la Liberté de la Presse, 1776” in Œuvres de Condorcet, Vol. 11, ed. A. Condorcet O’Connor and M. F. Arago (Paris: Firmin Didot Frères), pp. 255–314.
- Constant, Benjamin, 1988, Political Writings (Cambridge: Cambridge University Press).
- Hume, David, 1983, The History of England from the Invasion of Julius Caesar to the Revolution in 1688 (Indianapolis: Liberty Classics).
- Hume, David, 1987, Essays Moral, Political, and Literary, ed. by Eugene F. Miller (Indianapolis: Liberty Classics).
- Jefferson, Thomas, 1859, The Writings of Thomas Jefferson, ed. H. A. Washington, Vol. 4, (New York: Derby and Jackson).
- Kant, Immanuel, 1999, Political Writings, ed. H. S. Reiss (Cambridge: Cambridge University Press).
- Locke, John, 1988, Two Treatises of Government, ed. Peter Laslett (Cambridge: Cambridge University Press).
- Machiavelli, 1998, The Prince, ed. Quentin Skinner and Russell Price (Cambridge: Cambridge University Press).
- Montesquieu, 1989, The Spirit of the Laws, ed. Anne M. Cohler, Basia C. Miller, and Harold S. Stone (Cambridge: Cambridge University Press).
- Rousseau, Jean-Jacques, 1997, The Social Contract and other Later Political Writings, ed. Victor Gourevitch (Cambridge: Cambridge University Press).
- Tocqueville, Alexis de, 2004, Democracy in America (New York: The Library of America).
- Sidney, Algernon, 1990, Discourses Concerning Government, ed. Thomas G. West (Indianapolis: Liberty Classics).
- Skinner, Quentin, 1998, The Foundations of Modern Political Thought, two volumes (Cambridge: Cambridge University Press).
- Maistre, Joseph de, 2012, The Generative Principle of Political Constitutions: Studies on Sovereignty, Religion, and Enlightenment, ed. Jack Lively (New Brunswick: Transaction Publishers).
- Marsilius of Padua, 2005, The Defender of the Peace, translated and edited by Annabel Brett (Cambridge: Cambridge University Press).
- James I (King of England), 1918, The Political Works of James I, with an introduction by Charles Howard McIlwain (Cambridge: Harvard University Press).
- Jefferson, Thomas, 1859, The Writings of Thomas Jefferson, ed. H. A. Washington, Vol. 4, (New York: Derby and Jackson).
- Hacking, Ian, 1990, The Taming of Chance (Cambridge: Cambridge University Press).
- Habermas, Jürgen, 1989, The Structural Transformation of the Public Sphere: An Inquiry into a Category of Bourgeois Society (Cambridge, MA: MIT Press).
- Kraus, Wolfgang H., 1959, “The Democratic Community and the Problem of Publicity,” in Community (ed. Carl J. Friedrich), Nomos, Vol. 2 (New York: The Liberal Arts Press), pp. 225–55.

### Fiscal history, public finance, and state-building
- Acemoglu, Daron, and James A. Robinson, 2012, Why Nations Fail: The Origins of Power, Prosperity, and Poverty (New York: Crown).
- Allen, Robert C., 2011, Global Economic History: A Very Short Introduction (Oxford: Oxford University Press).
- Braddick, Michael J., 1996, The Nerves of State: Taxation and the Financing of the English State, 1558‒1714 (Manchester: Manchester University Press).
- Brewer, John, 1989, The Sinews of Power: War, Money, and the English State, 1688‒1783 (New York: Alfred Knopf).
- Dincecco, Mark, 2011, Political Transformations and Public Finances: Europe, 1650–1913 (Cambridge: Cambridge University Press).
- Musgrave, Richard A, 1985, “A Brief History of Fiscal Doctrine,” chap. 1 in Handbook of Public Economics, vol. 1, ed. Alan J. Auerbach and Martin Feldstein (Amsterdam: North-Holland).
- Stasavage, David, 2011, States of Credit: Size, Power, and the Development of European Politics (Princeton: Princeton University Press).
- Webber, Carolyn, and Aaron Wildavsky, 1986, A History of Taxation and Expenditure in the Western World (New York: Simon Schuster).
- Pomfret-style and national studies and sources included: INE Spain (Instituto Nacional de Estadistica), 1954, Annuario Estadistico de España Año XXVIII, 1953; INE Portugal (Instituto Nacional de Estatistica), 1955, Anuário Estatístico 1954 (Lisbon: Tipografia Portuguesa).
- Cangiano, Marco, 2002, “The Role of the IMF in Promoting Fiscal Transparency,” chap. 11 of Current Developments in Monetary and Financial Law, Vol. 2 (Washington DC: IMF).
- IMF, 2011, Regional Economic Outlook: Europe—Navigating Stormy Waters, October (Washington: IMF).
- IMF, 2012, Fiscal Transparency, Accountability, and Risk, August 7 (Washington: IMF).
- NAO (National Audit Office), 2012, State Audit in the European Union.
- Tiihonen, Seppo, 2012, The Ministry of Finance: Two Hundred Years of State-Building, Nation-Building, and Crisis Management in Finland (Helsinki: Suomalaisen Kirjallisuuden Seura).
- Wehner, Joachim H. G., 2010, Legislatures and the Budget Process: The Myth of Fiscal Control (Basingstoke, U.K.: Palgrave Macmillan)

### Accounting, audit institutions, and financial reporting
- Blondy, Guilhem, Julie Cooper, Timothy Irwin, Kris Kaufmann, and Abdul Khan, 2013, “The Role of Fiscal Reporting in Public Financial Management,” chap. 8 in Marco Cangiano, Teresa Curristine, and Michel Lazare (eds.), Public Financial Management and its Emerging Architecture (Washington D.C.: IMF).
- Durhum, John W., 1992, “The Introduction of ‘Arabic’ Numerals in European Accounting,” The Accounting Historians Journal, Vol. 19, No. 2, pp. 25‒56.
- Gomes, Delfina, Garry D. Carnegie, and Lúcia Lima Rodrigues, 2008, “Accounting Change in Central Government: The Adoption of Double Entry Bookkeeping at the Portuguese Royal Treasury (1761),” Accounting, Auditing, and Accountability Journal, Vol. 21, No. 8, pp. 1144‒1184.
- Nikitin, Marc, 2001, “The Birth of a Modern Public Sector Accounting System in France and Britain and the Influence of Count Mollien,” Accounting History Vol. 6, No. 1, pp. 75‒101.
- Lemarchand, Yannick, 1999, “Introducing Double-Entry Bookkeeping in Public Finance: A French Experiment at the Beginning of the Eighteenth Century,” Accounting, Business, and Financial History, Vol. 9, No. 2, pp. 225–54.
- Forte, Francesco, and Giuseppe Eusepi, 1994, “A Profile of the Italian State Audit Court: An Agent in Search of a Resolute Principal,” European Journal of Law and Economics, vol. 1, pp. 151–60.
- NAO (National Audit Office), 2012, State Audit in the European Union.
- Ste Croix, G. E. M. de, 1956, “Greek and Roman Accounting,” in A. C. Littleton and B. S. Yamey (eds.), Studies in the History of Accounting (Homewood, Illinois: Richard D. Irwin).
- Giroux, Gary, 1998, “Annual Reports of the Minehill and Schuykill Haven Railroad Company,” The Accounting Historians Notebook, April, pp. 9‒10 and 30‒33.
- Hernández Esteve, Esteban, 1985, “Pedro Luis de Torregrosa, Primer Contador del Libro de Caxa de Felipe II. Introducción de la Contabilidad por Partida Doble en la Real Hacienda de Castilla (1592),” Revista de Historia Económica, Vol. 3, No. 2, pp. 221‒245.

### Institutional histories, case studies, and regional accounts
- Blanning, Tim, 2007, The Pursuit of Glory: The Five Revolutions that Made Modern Europe, 1648–1815 (New York: Penguin).
- Bowsky, William M., 1981, A Medieval Italian Commune: Siena Under the Nine, 1287–1355 (Berkeley: University of California Press).
- Chambers, David, and Brian Pullan (eds.), 2001, Venice: A Documentary History, 1450‒1630 (Toronto: The Toronto University Press).
- Duggan, Christopher, 2007, The Force of Destiny: A History of Italy since 1796 (New York: Houghton Mifflin).
- Clough, Richard, 2002, A Concise History of Greece, second edition (Cambridge: Cambridge University Press).
- Woodhouse, C. M., 1998, Modern Greece: A Short History, sixth edition (London: Faber and Faber).
- Nordstrom, Byron J., 2000, Scandinavia since 1500 (Minneapolis: University of Minnesota Press).
- Meneses, Felipe Rebeiro de, 2009, Salazar: A Political Biography (New York: Enigma Books).
- Gomes, Delfina, Garry D. Carnegie, and Lúcia Lima Rodrigues, 2008, “Accounting Change in Central Government: The Adoption of Double Entry Bookkeeping at the Portuguese Royal Treasury (1761),” Accounting, Auditing, and Accountability Journal, Vol. 21, No. 8, pp. 1144‒1184.
- Cardoso, José Luís, and Pedro Lains, 2010, “Public Finance in Portugal, 1796–1910,” chap. 9 in Cardoso and Lains (eds.), Paying for the Liberal State: The Rise of Public Finance in Nineteenth-Century Europe (Cambridge: Cambridge University Press).

### Histories of the French Revolution and Enlightenment-era finance
- Baker, Keith Michael, 1987, The Old Regime and the French Revolution, University of Chicago Readings in the History of Western Civilization 7 (Chicago: University of Chicago Press).
- Baker, Keith Michael, 1990, Inventing the French Revolution: Essays on French Political Culture in the Eighteenth Century (Cambridge: Cambridge University Press).
- Beales, Derek, 2005, Enlightenment and Reform in Eighteenth-Century Europe (London: I. B. Taurus).
- Doyle, William, 1999, Origins of the French Revolution, third edition (Oxford: Oxford University Press).
- Doyle, William, 2002, The Oxford History of the French Revolution, second edition (Oxford and New York: Oxford University Press).
- Félix, Joël, 1999, Finances et Politique au Siècle des Lumières: Le Ministère L’Averdy, 1763–1768 (Paris: Comité pour l’histoire économique et financière de la France).
- Félix, Joël, 2013, “The Problem of Necker’s Compte Rendu au Roi (1781),” chap. 6 in The Crisis of the Absolute Monarchy: France from Old Regime to Revolution, ed. Julian Swann and Joël Félix (New York: Oxford University Press).
- Necker, Jacques, 1781, Compte Rendu au Roi (Paris: Imprimerie Royale).
- Morellet, l’Abbé André, 1814, Réflexions sur les Avantages de la Liberté d’Écrire et d’Imprimer sur les Matières de l’Administration (Paris: Magimel and Delaunay).
- Montcloux, Henrie de, 1840, De la Comptabilité Publique en France (Paris: Bossange).
- Schama, Simon, 1989, Citizens: A Chronicle of the French Revolution (New York: Alfred A. Knopf).
- Soll, Jacob, 2009, The Information Master: Jean-Baptiste Colbert’s Secret State Intelligence System (Ann Arbor: University of Michigan Press).

### Classical, medieval, and early modern foundational texts
- Plato, 2000, The Republic, ed. G. R. F. Ferrari and translated by Tom Griffith (Cambridge: Cambridge University Press).
- Plato, 2004, The Laws, translated with an introduction and notes by Trevor J. Saunders (London: Penguin).
- Thucydides, 1998, The Peloponnesian War, translated by Steven Lattimore (Indianapolis: Hackett).
- Polybius, 2010, The Histories, translated by Robin Waterfield (Oxford: Oxford University Press).
- Suetonius, 1998, The Lives of the Cesars—Julius, Augustus, Tiberius, Caligula, translated by J. C. Rolfe, Loeb Classical Library, No. 31 (Cambridge, MA: Harvard University Press).
- Kagan, Donald, 2003, The Peloponnesian War (New York: Penguin).
- Botero, Giovanni, 1956, The Reason of State, translated by P. J. and D. W. Waley (New Haven: Yale University Press).
- Fortescue, Sir John, 1997, On the Laws and Governance of England, ed. Shelley Lockwood (Cambridge: Cambridge University Press).
- Filmer, Sir Robert, 1984, Patriarcha and Other Political Works, ed. Peter Laslett (New York: Garland).
- Walker, Clement, 1648, “The Mystery of the Two Iuntos, Presbyterian and Independent,” in Relations and Observations, Historical and Politick, upon the Parliament Begun Anno Dom. 1640.

*References compiled from the _wp13219 - References content unit.*

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