The Fiscal Intergovernmental Relations

In addition to the possible detrimental effects of fiscal policies, there are effects that can be considered as important in the improvement of governance. In the study of the fiscal process, importance of the vertical intergovernmental relationship is given attention. This fact is based on the results of the studies undertaken by different groups in relation to the effects of fiscal concepts such as decentralization. The said notion can lead to economic growth upon the proper monitoring in processes such as the tax revenues (Murakami, 2005).

Also the increased in economic efficiency is another possible positive effect of the fiscal intergovernmental relationship (Oates, 1993). These possible positive effects can be considered possible on the basis of the application of the different governance techniques, the most important of which is the balance of the different processes. One scenario that can be presented is in case of the production. This can be one of the underlying issues in relation to a state or a nation’s revenue. The balance in the governance is exhibited in the products that are distributed in the market.

There are two types of products in the market: those that are considered as government goods and those that are private goods. The government goods are produced by the public owned institutions. On the other hand the private goods are produced by the private sectors or the manufacturers and producers that are not related and not under the government control (Kwon, 2002). The optimum scenario can be observed when there is a balanced and efficient production of both the government goods and private good.

At a state of efficiency, the needs of the public are met by the combination of the products from the two sectors. In the absence of the balance in the production of goods between the two sectors, the choice of the public can be unbalanced on the assumption that more products are produced by one of the sectors. If the government goods are of higher production, the public will buy more of the products. This will have detrimental effects in the totality of the economic and political structure (Bahl and Linn, 1992; Kwon, 2002). In the said scenario, more products are then needed to be produced by the private sector.

If the government sector does not adjust the production, there will be excess products in the market. This is the most important example of the balance and cooperation that is needed in the economic sector. The Fiscal Intergovernmental Relations of Florida To be able to present and achieve an understanding on the processes that are specifically involved in the application of fiscal policies and the fiscal relationships that are established between states and nations, the most effective way is to be able to target and to focus a particular state as the main object of the research.

Florida is one of the most prominent and economically stable states in the US. In 2001, the Gross State product was estimated at $491 Billion from $472 Billion of 2000. It has a dominant international trade contribution of 40% exports in Latin and South America. Aside from export, the different sectors such as tourism, space industry, agriculture, construction, services, software, health technology which includes the medical, biotech and laboratories, and university research (US Census Bureau, 2007).