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Correcting the Horizontal Fiscal Balance

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What are the possible ways of correcting Horizontal Fiscal Balance?

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The most plausible way of correcting HFI is to apply the principle of Horizontal Fiscal Equalization (HFE). In the case of Commonwealth of Australia, to employ HFE, the state and territory governments should receive funding from the Commonwealth such that if each state or territory made the same effort to raise revenue from its own sources and operated at the same level of efficiency, each ...

Solution Summary

The solution determines the possible ways of correcting the Horizontal Fiscal Balance.