Risk Management in the Public Sector: A Comparative Analysis of Central Government Settings in France, Germany, and Italy

The rise of Risk Management in the public sector

In recent years, governments worldwide have been encouraged to adopt risk management systems that align with international guidelines. The core of risk management lies in identifying potential challenges or uncertainties that could disrupt operations and developing strategies to address them. Although international standards provide a framework, the application of these guidelines varies significantly across different countries.

Comparative study: France, Germany, and Italy

This study examined how France, Germany, and Italy—three of Europe's largest economies—have integrated risk management practices within their public sectors. Despite being influenced by the same international standards, each country’s approach has been shaped by its unique historical and administrative contexts. This phenomenon, known as "path dependency," explains how countries tend to adapt new practices in ways that are consistent with their established systems and traditions.

Diverging Approaches to Risk Management

France and Germany have implemented more balanced and flexible risk management systems. They address various types of risks, including both financial and non-financial risks (such as operational or reputational risks). In contrast, Italy’s approach is more rule-based, with a focus on strict compliance, particularly regarding financial risks. Italy has been slower to adopt a broader understanding of non-financial risks, which limits its flexibility in addressing new or emerging risks.

Perception of risk as a threat or opportunity

One key finding from the study is that all three countries predominantly view risks as threats—something to be avoided or minimized. While this perspective is understandable, it is somewhat limiting. Previous research argues that it is also important to view risk as an opportunity. Identifying potential risks early can open avenues for innovative solutions or process improvements, thus fostering a more proactive approach.

Shifting the mindset: learning from risk.

To promote this shift in perspective, it is recommended that risk management regulations and guidelines should emphasize "learning from risk." This approach encourages public organizations to not only avoid mistakes but also use risky situations as opportunities for growth and improvement. However, many organizations are trapped in a "blame-game" culture, where the focus is on avoiding blame rather than embracing creativity in managing risks.

Conclusion: moving toward innovation and resilience

France, Germany, and Italy have made strides in adopting international risk management practices, but there remains room for further progress. A crucial step forward involves embracing the idea that risk can present opportunities. By adopting this mindset, public organizations can become more innovative and resilient, better equipped to face future challenges.

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Authors at the Department of Management

EMANUELE PADOVANI – professor of public management & accounting

Academic disciplines: ECON-06/A Economia aziendale

Academic disciplines: Business Administration and Accounting Studies

Teaching areas: Public management & accounting, Public financial management, Management Accounting

Research fields: Public management & accounting, Public financial management, Cost management in healthcare

Emanuele has extensive expertise in public management & accounting, public financial management, and cost management in healthcare. He has authored nearly a hundred publications in these areas. He has served as a leading expert and advisor on public management & accounting, financial management, and risk analysis for numerous public and private institutions across Europe and internationally.