26122 - DIRITTO DELLA FINANZA PUBBLICA (M-Z)

Learning outcomes

At the end of the course, students will have a comprehensive understanding of the sources of law and the structure of the financial system of the State and other territorial public bodies. They will also be familiar with the fundamental principles and rules governing the planning and management of their financial activities. Specifically, students will gain knowledge of the methods of financing public expenditure, the regulations governing the State budget and public debt, the general principles of the tax system and national public accounting, as well as the foundational concepts of EU law regarding the coordination of national economic policies and monetary policy. The course equips students with foundational knowledge to pursue deeper studies in specific areas of public law, such as tax law and administrative law. They will acquire interdisciplinary skills that enable them to connect and integrate legal concepts with theories and principles from macroeconomics and political economy. Additionally, students will become familiar with the rules and criteria for sound and sustainable financial management, preparing them for professional roles in public administration. The course also aims to develop students' critical analysis skills, enabling them to: - understand and evaluate public budgets and public finance data disclosed by relevant institutions; - analyze and assess the key legal and macroeconomic implications of the State's annual budgetary decisions; - engage with and critically follow related political and institutional debates.

Course contents

The course will generally be divided into six main parts.

The examination syllabus corresponds to the topics covered during lectures and in the textbook that will be indicated on this webpage before the beginning of the course, and/or in the handouts and readings made available through the University’s online teaching platform.

1. Introduction to the course: the legal framework of public finance

• Public finance: fundamental definitions and concepts.
• The interdisciplinary dimension of public finance: economics, law and politics.
• The budgets of territorial public authorities and public financial activity: nature, functions and objectives, including the allocation and redistribution of resources and the stabilisation of the economy.
• The relationship between revenue and expenditure and the central role of the State budget. Financial and economic budgets; forecast budgets and final accounts; general budgetary principles.
• The budget as an instrument of planning, economic policy and administrative and accounting management. The relationship between the budget and public policies, including economic, tax and budgetary policies.
• The financing of public expenditure as a condition for the effective protection of civil, political and social rights, and the economic and financial sustainability of the budget.
• The sources of the multilevel public-finance legal framework. Public accounting as a system of principles, rules and techniques.

2. Public revenue2.1. Tax revenue

• Classification of revenue in the State budget.
• Tax revenue and the fiscal function. The concept of taxation in legislation, case law and legal scholarship.
• Tax financing under the Italian Constitution. Taxing sovereignty and the principle of statutory reservation under Articles 23 and 75 of the Constitution; the fiscal interest; the ability-to-pay principle as the foundation and legal limit of the power to tax under Article 53(1) of the Constitution.
• Legal categories of taxes and levies: taxes, fees, special levies, fiscal monopolies and environmental taxes. Redistributive justice and tax financing: the economic and political criteria governing the allocation of public expenditure among members of society.
• The principle of progressivity and the redistributive effects of tax financing under Article 53(2) of the Constitution.
• Structure and types of the principal taxes in force in the Italian legal system. Taxes on income, wealth, transactions and consumption. Tax law and tax systems. Multilevel taxation: decentralisation, fiscal federalism and vertical subsidiarity.
• The principal economic effects of taxation.
• Tax concessions and tax expenditures. The non-fiscal use of taxation.
• “Parafiscality”: the financing of the social security system through insurance-based and tax-based models.
• Taxation, public economics and the market from the perspective of Italian constitutional law and European Union law. The implications of European economic integration and the single market for taxation.

2.2. Other public revenue

• Non-tax revenue, including compulsory revenue and consideration-based revenue.
• Revenue from the disposal of public assets. The financial implications of the management of State-owned property and public assets. Securitisation transactions.

2.3. Public debt

• Financing public expenditure through budget deficits.
• The structure, types, and economic and legal effects of public borrowing.
• Public debt, money and savings.
• The historical development of public debt in Italy.
• Public debt in relation to revenue and expenditure. Debt and the principal public-finance balances, including the primary surplus, deficit and recourse to financial markets. Floating debt.
• European rules governing public debt.

3. Public expenditure

• Public expenditure under Article 81 of the Constitution and the General Law on Public Accounting and Public Finance, Law No. 196/2009.
• Analysis of the composition of public expenditure. Legal, economic, administrative and accounting classifications; functional classification by missions and programmes; non-discretionary expenditure; expenditure determined by statutory factors; expenditure adjusted to requirements.
• The constitutional obligation to provide financial coverage. The principal means of securing financial coverage. Criteria for quantifying expenditure in spending legislation and the Budget Law.
• Spending legislation and its relationship with the Budget Law. Multiannual and permanent spending legislation.
• The “cost of rights” and expenditure resulting from judgments of the Constitutional Court.
• The reallocation of expenditure within the budget.
• Political, administrative and accounting monitoring and control of public expenditure; the subject matter of controls and the procedures for correcting deviations in expenditure. Spending reviews and safeguard clauses.
• Tax concessions and public expenditure (tax expenditures).
• Italian and European rules governing trends in public expenditure.

4. The State budget and the annual budgetary package

• The historical development of the rules contained in Article 81 of the Constitution and of the annual budgetary package, from Law No. 468/1978 to Law No. 196/2009.
• The economic crisis of 2008–2012: the Europeanisation of budgetary rules and the reform of Article 81 of the Constitution. Implementation of the reform between 2012 and 2016: Law No. 243/2012 and subsequent amendments. The transition from the Finance Law and Stability Law to the unified Budget Law.
• Political direction in financial matters within the constitutional relationship between Parliament and the Government. The principle of statutory reservation and the budget as both formal and substantive legislation. The authorising effect of the budget. Provisional budget management.
• The progressive Europeanisation of budgetary procedures. European monetary policy, the coordination of European economic policies and the surveillance measures established by the Treaty on the Functioning of the European Union. The Stability and Growth Pact, the Fiscal Compact and the European Stability Mechanism.
• Financial equilibrium and the balanced-budget principle under Articles 81 and 97 of the Constitution and Law No. 243/2012. General public-finance balances and the structural balance or medium-term objective. Decisions concerning public borrowing under constitutional and European rules. The excessive deficit and/or excessive debt procedure.
• Accounting harmonisation and consolidation of public accounts.
• Financial equilibrium as a constitutional “value” and the balancing of competing constitutional interests in Constitutional Court case law concerning social rights.
• Legal instruments for planning and providing political direction throughout the Italian budget cycle. From the European Semester to the European budgetary calendar: the Economic and Financial Document and its Update Note; the Draft Budgetary Plan; the Budget Bill; related legislation.
• Structure and contents of the Budget Law.

5. The legislative and administrative cycle of the State budget

• The procedure for preparing the Budget Law and approving the annual budgetary package: the roles and powers of the Government, Parliament and the European institutions.
• Administrative and accounting management of the budget. The stages and procedures for managing revenue and expenditure. Outstanding revenue claims and expenditure commitments. The expenditure timetable and the strengthening of cash-based budgeting.
• Budget amendments and the adjusted budget.
• Final accounts and the General State Accounts.
• Controls and audits: an overview of political, administrative and accounting controls; internal and external controls; management controls and audits of public-sector management. The respective roles of the State General Accounting Department, the Ministry of Economy and Finance, the Court of Auditors, Parliament and the Parliamentary Budget Office.

6. Public finance of subnational territorial authorities

• The tax and financial autonomy of Regions and Municipalities under Articles 117–120 of the Constitution.
• Fiscal federalism: own-source taxes, revenue-sharing arrangements and the principle prohibiting State financial transfers.
• Expenditure by Regions and Municipalities, essential levels of public services and their financial sustainability. Financial responsibility and equalisation. Constitutional limits on the expenditure and borrowing of subnational authorities.
• Coordination of national public finance. From the Internal Stability Pact to the balanced-budget and borrowing rules applicable to Regions and local authorities under Law No. 243/2012.

Note for fifth-year students taking the 7-ECTS course in Financial Law (course code 01621)

For students who include the 7-ECTS Financial Law course in their fifth-year study plan, sections 2.1 and 2.2 of the syllabus set out above are excluded from the examination programme.

Readings/Bibliography

A. Mondini, Corso di Diritto della finanza pubblica, Wolters Kluwer-Cedam, 2021.

Some parts of the textbook are not up to date.

Students must also study the updated appendix, which is available free of charge on the publisher’s website.

During the course, students will be informed which parts of the textbook need not be studied in detail and which parts must be replaced by the updated appendix.

Fifth-year students taking the 7-ECTS Financial Law course (course code 01621) may prepare for the examination using the same materials, excluding the topics corresponding to sections 2.1 and 2.2 of the syllabus set out above.

Supplementary teaching materials and further readings will be made available to students, following authentication with their University of Bologna credentials, through the University’s online teaching platform: https://iol.unibo.it [https://iol.unibo.it/] .

Students are required in all cases to consult the principal relevant legislation in its current version: the Italian Constitution; the Treaty on the Functioning of the European Union; EU Regulations Nos 1466/1997 and 1467/1997; Law No. 196/2009; and Law No. 243/2012.

Teaching methods

Lectures

Assessment methods

The course is held during the first semester.

Students’ knowledge and understanding will be assessed through an oral examination.

The oral examination is designed to assess students’ ability to apply the knowledge they have acquired and to establish the necessary logical and deductive connections between the different topics.

The final grade will be awarded according to the following criteria:

• Very limited knowledge, with difficulty presenting the topics and establishing connections between them. Substantial assistance from the examiner is required: fail.
• Knowledge limited to a very small number of topics and analytical ability demonstrated only with the examiner’s assistance. Imprecise use of technical terminology: 18–19/30.
• Knowledge limited to a restricted number of topics and limited analytical ability. Brief and unsupported answers: 20–24/30.
• Knowledge covering an adequate range of topics, ability to establish connections and good command of the relevant technical terminology: 25–29/30.
• Substantially comprehensive knowledge of the topics, together with strong argumentative and critical abilities and full command of the relevant technical terminology: 30–30 cum laude.

Office hours

See the website of Giangiacomo D'Angelo