Assignment Tasks:
Should the Australian Commonwealth government and the various Australian state and territory local government grants commissions use matching grants or non-matching grants or both grant mechanisms to fund local government programs? Answer this question using relevant theoretical considerations, illustrative well-drawn diagrams, and salient examples of the types of grants and the kind of local government programs involved.
1. Introduction
2. Theoretical considerations on federal grants system
2.1 The theory of fiscal federalism
2.2 The theory of intergovernmental grants (analyzed based on the economic standards)
- Nonmatching grants and income effects
- Matching grants and price effects
- The effect of choice restrictions
- Conclusions
4. Silent example on public school financing of local government in USA (Applying both nonmatching and matching grants)
5. Conclusion