Public Finance is, at present, usually given a subordinate place in the study of economics. In the order of development, however, the study of Public Finance is much older than that of the general principles of economics - in fact, it was the center around which the early economic discussion developed. It was not until after the Middle Ages, however, that fiscal problems reached a degree of importance to warrant careful and systematic investigation. Before and during the Middle Ages references to the fiscal aspects of the state are not lacking in the numerous political and historical writings which are to be found. During this period the finances of the state were practically synonymous with those of the prince, and their study is of the principles of private finance rather than that of fiscal problems.

The development of commerce and trade caused a change in the situation. Cities and city-states that had little connection with the domain of the prince grew and flourished. The initial appearance of this situation came in Italy. The opening of the Mediterranean route of commerce, with its subsequent domination of world trade, made Italy the commercial center of the world. The rapid growth of such city-states as Florence and Naples led to a corresponding growth in their fiscal needs. It was in these Italian city-states of the fifteenth century, moreover, that the first systematic study of the principles which are properly included in the field of Public Finance made its appearance. The discussion centered around such questions as progressive taxation, the administration of revenues, and a systematic classification of expenditures. Many of these early ideas have much in common with modern expressions concerning fiscal subjects.