Theory of Fiscal Federalism

Theory of Fiscal federalism

Introduction

According to the theory of fiscal federalism, it aims to establish the optimal structure of public sector and improved distribution of fiscal responsibilities between the areas or levels of government, with the ultimate aim of meeting the specific needs of different sectors of the society more efficiently and maximizing economic welfare. To achieve its objectives, fiscal federalism has as its main strategy for decentralization. This definition is supported by other authors in the sense that decentralization basically involves the redistribution of decision-making in order to strengthen sub-national levels of government. Based on the above, fiscal ...