How does fiscal federalism resemble the carrot and a stick metaphor

The national government utilizes the importance of fiscal assistance using a common metaphor. It uses it as both a carrot and a stick. The federal dollars needed by the state is the carrot. It comes in the form of grants-in-aid. While the regulation and compliance with federal mandates to receive the money or to keep on receiving grants-in-aid is the stick.

Explanation:

When we talk about Fiscal Federalism, we are simply referring to a model of using, spending, taxing, and providing grants in the system of federal government.

The federal funding brings in federal regulation to regulate and control funds disbursed to states to implement projects and programs for citizens.

The States usually look to the national government to bring help in meeting the financial obligations of the increased need of the citizens. Examples of “sticks,” or mandates, are regulations such as minimum wage, speed limits, and handicap accessibility.

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