Answer to Question #75009 in Finance for Divya

Question

Why is Fiscal Fedrelism efficient in provision of public service?

Answer 1

As a subfield of public economics, fiscal federalism is concerned with "understanding which functions and instruments are best centralized and which are best placed in the sphere of decentralized levels of government" (Oates, 1999). In other words, it is the study of how competencies (expenditure side) and fiscal instruments (revenue side) are allocated across different (vertical) layers of the administration.
Source:
https://en.m.wikipedia.org/wiki/Fiscal_federalism