Fallible yet effective

Dr. Jana Marleen Walter is a Deputy Head and Senior Policy Advisor at the Federal Ministry for Family Affairs, Senior Citizens, Women, and Youth (Germany) in the field of Public Finance. She also holds a teaching position at the Management School of the University of Kassel (UNIKIMS). She completed her PhD at the Chair of Public Management at the University of Kassel in administrative sciences and continues to explore issues related to the politicization of public administration. As a practitioner, her mission is to modernize, digitize, and digitalize bureaucracy within the process of policy-making.

Abstract

Moving away from rigid structures toward more flexibility, honesty, and humility – this is the new mindset proposed by the so-called Humble Government approach in fiscal and financial policy. In a world marked by crises and uncertainties, public administrations need to be open to learning from mistakes and innovating creatively. Instead of pretending to have all the answers, this approach fosters collaboration, transparency, and innovation, which can build societal trust in government and create long-term solutions that meet the needs of society, economy, and democracy. Applying this concept to public finance aims at enabling a forward-looking and authentic financial policy that courageously adapts to the ever-changing challenges of our times. Sincere gratitude is extended to Demos Helsinki in collaboration with the Prime Minister’s Office of Finland, and Prof. Charles Sabel from Columbia Law School, for originally introducing Humble Governance as a contemporary framework for policymaking. The concepts and reflections on Humble Government in the context of public finance are grounded in their foundational principles.

Keywords: Humble Government, Humble Public Finance, Public Finance, Modern Government, Fiscal Policy, Financial Policy

Humble Government: New paths for public finance? 

Our world is rapidly changing, presenting unprecedented challenges: for instance pandemics, climate change, and global economic disruptions, all impacting not only our daily lives but also the way governments manage finances. What if we rethink how we approach fiscal policy? What if we viewed mistakes not as failures but as opportunities for innovation? This is the heart of the Humble Government approach, which also envisions a new humility in public finance. Instead of adhering to rigid, technocratic systems that penalize trial and error, this approach suggests policies that are open to learning from past errors and adapting to new conditions. Humble Government encourages us to embrace both humility and boldness, acknowledging that we may not always have immediate answers but remaining open to new perspectives. This attitude of admitting fallibility enhances government credibility and societal acceptance. Public finance plays a crucial role here, as it represents the collective resources of society, used for essential investments and shaping our future. Flexibility in managing these finances is key. Recognizing that we do not always have the perfect plan allows for genuine creativity and experimentation, both of which are urgently needed.

Overcoming today’s challenges

One of the biggest barriers in fiscal policy is the rigidity of budgets, often tied to outdated programs that fail to address current challenges. A prime example of this inefficiency is the so-called december fever, where unused budget funds are spent hastily at the year's end to avoid cuts in the next budget cycle. This behavior reflects how inflexible and inefficient traditional fiscal planning can be. By rethinking how we manage public finances, we can directly influence societal trust in public administration. Trust is vital for democracy's stability, and how a government manages common resources impacts the public's confidence. When citizens believe that their government handles public finances transparently, responsibly, and flexibly, they feel more connected to and supportive of the political system. Public finances are crucial for people's daily lives, whether in education, infrastructure, healthcare, or social services. Ensuring that public funds are used effectively strengthens democratic legitimacy. Long-term reforms in public finance, such as sustainable investments or comprehensive restructuring of the budgetary system, must be built on a foundation of trust. People are more willing to accept short-term sacrifices when they trust that reforms serve their long-term interests.

The four pillars of Humble Government in public finance

The Humble Government approach, when applied to public finance, is based on four key pillars: sustainability, mindset and management, an obligatory culture of experimentation, and methodological competence. These pillars lay the foundation for a modern and flexible fiscal policy rooted in transparency, openness, and collaboration.

• Sustainability of public finances: Moving away from traditional, rigid budgeting models, like annual budgeting, toward models like zero-waste budgeting or policy budgets ensures that unspent funds can be used for future investments or innovative projects.

• Mindset and management shift: This pillar advocates for cultural change in public administration, moving away from strict controls and audits toward empowerment and trust. Instead of focusing on compliance, administrations should emphasize achieving results. A central component is reducing the so-called audit explosion – the excessive increase in audits that create administrative burdens, diverting resources from core tasks.

• Institutionalized experimentation culture: Governments must be willing to try new approaches and view failures as learning opportunities. Legal frameworks that explicitly allow for innovations and experiments in public finance – such as pilot projects or regulatory sandboxes – can promote this culture. These tools would let governments test innovative measures without the risk of immediate sanctions.

• Methodological competence: Incorporating modern methods, such as accelerator concepts, which allow for quicker, more effective decision-making. Public administrations should be able to pilot projects and, if successful, implement them on a larger scale.

A pathway to transforming fiscal policy

The Humble Government approach offers a manageable and scalable way to achieve more flexible and trustworthy fiscal policy. It provides a future-oriented approach to rethink public finance, allowing it to respond more effectively to the growing challenges of our time. By focusing on sustainability in budgeting and fostering an experimental culture, the approach breaks down rigid control mechanisms and strengthens both the public administration’s capacity for action and its innovative potential. The key advantages of Humble Government in public finance lie in creating a new understanding of fiscal policy that emphasizes openness, collaboration, and creativity. This not only enhances the effectiveness of public administration but also bolsters public trust in government – a crucial factor for a strong, resilient democracy. In the end, Humble Government is not just about technical reforms but a cultural shift in how we think about public finance and administration. It is about showing humility, accepting mistakes, and being open to new ways of doing things. By embracing this shift, we can create a public administration that is not only efficient but also impactful and future-oriented. And that’s the true value for our democracy.