General Exposition of Federalism and the Rationale for Fiscal Federalism Practise

Abstract

This article is purely written based on theoretical phenomena. It employs the use of secondary sources of information and in particular it posits the meaning of federalism and fiscal federalism and particularly looks at the rationale behind the practice of fiscal federalism. It is imperative that the rationale for the practice of fiscal federalism is exposed in a way that people can now begin to realise that fiscal federalism practice has an adamantine objective of economic growth. The article expounds that federalism and fiscal federalism are synonymous but must not be confused with decentralisation, which is the process and fiscal federalism is one element of that process, although it was used amiably by (0ates 1972) as “Decentralisation Theorem”. It also reveals that fiscal federalism in federal developing countries of the world has not been successful relative to its unitary counterparts.