Fiscal federalism explores the division of responsibilities between levels of government from "summary" of Public Finance by Harvey S. Rosen
Fiscal federalism is a concept that delves into the intricate web of responsibilities that are divided between different levels of government. This division of responsibilities is not merely a matter of convenience or administrative necessity; rather, it is a reflection of the principles that underpin the relationship between the various levels of government within a federal system. In essence, fiscal federalism seeks to answer the fundamental question of who does what in a federal system of government. At the heart of fiscal federalism lies the principle of subsidiarity, which holds that decisions should be made at the lowest level of government capable of addressing them effectively. This principle recognizes that different levels of government possess different comparative advantages in addressing various policy issues. For example, local governments may be better equipped to deal with issues that are geographically specific, while national gover...
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