Fiscal Federalism as Found Principle for Structural Reforms Accountability

Developed by Musgrave (1959) and Oates (1972), the concept of fiscal federalism describes the process performed by the central governments to deal with the distribution problem and refer the provision of services to decentralized governments. In this respect, centralized governments should foster local governments to ensure the optimal amount of public services provided at local level. Issues like overlapping spending competencies and vertical tax competition could generate incoherence in the implementation of the fiscal policy. Under the strain of providing uniform level of sustainable growth, centralized governments shifted the decision-making process at regional/local level