Over the last 30–40 years, the theory of optimal financing for the government has become more and more influenced by microeconomic theory. For example, the sovereign debt theory uses the reputation model or the incomplete contract approach whereby the legal enforcement of debt is too costly, inefficient, or even impossible, and therefore the debtor must be self-interested in debt reimbursement. However, other microeconomic foundations developed within the financial theory on the corporate level and in particular capital structure theory seem to not be used often at the governmental level. In this chapter we discuss some results in this new area of research, e.g., we show why seigniorage is an inferior choice to government debt. This chapter discusses some new lines of research, e.g., the simultaneous choice of capital structure and organizational form; an analogy between capital structure choices and the choice of academic partnerships structures; connections between the optimal capital structure choice and the design of bankruptcy systems, etc.