Liquidity Management as a Space for Public Sector Innovation: How the Public Sector Approach to This Issue Has Developed through the Time until Now?

New approaches and addressing issues in the private sector has led in some cases to their transfer to the public sector. In this way, thus in the public sector has appeared through the history also the issues addressing liquidity and its management in such type of organizations and in public sector at all. The aim of this paper is a synthesis in the form of a comprehensive view of liquidity and its management in the public sector. The partial aim is to identify the possibilities and opportunities of this aspect of financial management as a space for innovation. This paper should answer the question, if the development of this aspect (liquidity) can lead to the innovation of financial management in the public sector, respectively in which way and how. The paper explores and identifies the downsides as well as the advantages of such techniques concerning with the issue of this paper, and also to identify specifications that should be taken into account within using it which is based on the specifics of the public sector as such. The paper defines what implications arise for the public sector in the future in this way.