Fiscal Federalism
Fiscal federalism refers to the financial relationships between different levels of government, such as national, state, and local authorities. It focuses on how these governments allocate resources and responsibilities for public services. Each level typically has its own revenue sources, like taxes, and expenditure responsibilities, such as healthcare or education. This system aims to ensure efficient service delivery, equitable resource distribution, and local autonomy. By coordinating finances, fiscal federalism helps address regional needs while maintaining overall economic stability and growth.
Additional Insights
-
Fiscal federalism refers to the financial relationships and responsibilities between different levels of government, such as national, state, and local authorities. It focuses on how these governments raise and spend money. This system ensures that resources are allocated efficiently to meet public needs. For example, the national government may provide funding for large infrastructure projects, while local governments handle community services like schools and roads. Effective fiscal federalism aims to balance the distribution of tax revenues and expenditures, ensuring that all areas can adequately address their unique economic and social challenges.