Public Finance(please pick a topic) Essay Example | Topics and Well Written Essays - 500 words

Public Finance(please pick a topic) - Essay Example High government levels manage broad tax bases preeminently. In case the subnational governments become essential suppliers of goods and services, higher level jurisdictions are supposed to share a given amount of their incomes with these subnational governments. This enables bridging the gap between incomes and spending organized locally (Wildasin, 123). When budgets are supposed to be balanced, various constraints might result in subnational spending. According to Wildasin (125), the first constraint is the capacity of income rising of these subnational governments becomes limited. The second limitation is the occurrence of horizontal and vertical income sharing. Tax effectiveness grounds determine the optimal size of these subnational governments. The conformations of subnational incomes play a vital role in determining autonomy level over the expenditure management that the subnational governments enjoy. For example, mobilization of the local revenue is enhanced when essential tax bases are controlled by the subnational governments. This enables these governments to take legitimacy over using these resources and managing them to their needs and preferences (Wildasin, 126). Subnational governments are expected to reduce their spending management autonomy when there is reliance on revenue sharing, used in financing subnational spending that can be vertical or horizontal. In addition, fiscal decentralization may be more than delegation (Wildasin, 128). Additionally, subnational governments turn out to be spending agents of higher government levels that have inadequate decision making autonomy over the ways public funds are used up. The advantage of distribution in expenditure management is increased accountability and transparency in service delivery. This is by bringing the spending done by the public sector nearer the taxpayers. Wildasin (130) states that policy making autonomy over shared incomes enables