Fiscal federalism refers to the division of financial responsibilities and powers between the national government and state governments in a federal system. It involves the sharing of tax revenues, grants, and other fiscal resources between different levels of government.
Related terms
Block Grants: Block grants are a type of grant-in-aid that provides state governments with a fixed amount of funding for broad policy areas, allowing them more flexibility in deciding how to allocate resources.
Mandates: Mandates are requirements or regulations imposed by the national government on state governments, often accompanied by funding, to ensure compliance with certain policies or standards.
Revenue Sharing: Revenue sharing is a form of fiscal federalism where the national government distributes tax revenues to state governments based on predetermined formulas or criteria.