Sustainable Public Finance and Debt Management

Sustainability is a leading criterion in the decision-making process in sustainable finance concerning financial markets and private entities as well as in public finance. State and self-governing entities play a key role in implementing and supporting the sustainable finance concept. There is some empirical evidence that a positive association exists between higher public revenue (as a percent of GDP) and income inequality reduction, as well as the key role of public social spending on human development. The chapter presents a theoretical approach to public debt management from the perspective of balanced finances. Differences in the understanding of sustainable public debt management in the traditional and stable financial paradigm are pointed out. The chapter uses a critical analysis of literature, the method of induction and deduction, a method of comparisons and generalizations, and a synthesis method. Because of the conducted analyses, it is shown that balanced finance in a comprehensive manner describes and explains the complexity of the public debt management category in terms of the traditional finance paradigm.