Competitive federalism make states a competitive unit which provides a package of services and fiscal environment that attracts more resources. It is akin to market place system.
Benefits of CF:
- Promotes innovation
- Better services to citizens
- Place emphasis on continuous reforms
- Discipline state fiscally
- Best suited to deal with the pressures of globalisation
- Harmonisation of laws and policies
- Quashing of archaic laws and executive directions
- Adoption of best practices.
- Can foster unequal competition
- Concept more applicable to countries like USA.