A transparent budgeting and award system with functional internal controls ensures that state resources are used effectively and benefit the population. External checks by an independent court of auditors have a key role here. It examines how state funds are used and makes an important contribution to combating corruption.
Public Finance
Raising taxes provides the foundation for funding any state. We enable partner countries to set up a fair, transparent and reliable budgeting and taxation system.
Reducing inequality
Tax systems, fiscal policy and public investment should help reduce inequality. At the same time, they should create the right incentives for green growth coupled with climate action and environmental protection. GIZ supports partner countries of German international cooperation in applying their public funding specifically for climate action and socially just economic growth.
It is essential to align public finance on environmental and climate-friendly policies and on a sustainable economy. This is the only way we can firmly tackle ongoing climate change, the degradation of ecosystems and environmental pollution.
Financing sustainable development – leverage from public finance
Public finance plays a key role in funding development. A sustainable tax policy creates economic stimuli and positive incentives for both individuals and companies. Governments can use targeted loans to invest in projects that would not be feasible otherwise. Responsible debt management enables the reduction of financial costs and risks, and thus helps ensure long-term economic stability. Stable regulatory conditions and targeted incentives can help to mobilise private capital to supplement government spending programmes. Public-private partnerships, for example, can be used to implement government projects efficiently. We give our partner countries targeted support in generating national revenue and encouraging investment by private enterprise, in order to fund sustainable development.
Preventing illicit financial flows
Illicit financial flows (IFF) arise when money originating from criminal activities such as corruption, tax evasion or drug trafficking is secretly fed into the legal financial system. It often then flows back into criminal activities, or even terrorism. This weakens the state, undermines security and erodes confidence in democratic structures.
Another major factor is environmental crimes such as illegal trading in wild animals, logging and unauthorised mining. Such activities generate huge profits - while causing serious damage at the same time. The financial losses caused by IFF worldwide are greater than the total amount of official development aid.
IFF drains off money urgently needed for schools, hospitals and environmental conservation. Furthermore, countries that do not contain these financial flows risk the state and the private sector losing access to the international finance market, and the absence of financial aid and investments.
We help our partner countries to detect, redirect and permanently prevent illegal financial flows. By doing so, we support structures, promote fair economic development and protect human beings, nature and the climate.
This project focuses on the following GIZ work priorities: