This paper investigates the origins and drivers of fiscal institutions by studying the history of finance ministries. It studies the development of finance ministries as controllers of executive spending from their origins as medieval household treasuries – using the history of Britain and Germany in particular. The paper develops an evolutionary account and argues that, for most of their early history, external pressures drove the institutional form of finance ministries. It was the need for states to survive interstate competition and war that set up treasuries as collectors of funds and guardians of spending discipline.
The origins of modern finance ministries: an evolutionary account based on the history of Britain and Germany