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I. Introduction
• autocracies where one individual holds all usually replaced by a strongman who rules the
the power. This category includes absolute country until either a democracy is formed or
monarchies, as well as dictatorships. another strongman replaces the original. As
the gauge goes from anarchy to dictatorship,
• oligarchies where political power is held personal freedom of the individual
by a small group of people who share the becomes more and more limited. When the
same interests. governments demands for the people increase
and freedom diminishes, the more further the
• democracies are governments where the governments goes to dictatorship.
people as a whole, hold the power. It may
be exercised by them (direct democracy), C. Centralized Government
or through representatives chosen by them
(representative democracy). A centralized government is a form of
government in which power is concentrated in
• anarchy is a lack of government or a central authority to which local governments
imposed rule. are subject. Centralization occurs both
geographically and politically.
History has shown that anarchy, if ever
established, has a very short life; a strong A centralized government is characterized in
dictator usually destroys it. Ironically, that which the local governments are designated
is the sign of an inferior government, it is by the central Government of the country,
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like the local administrative authorities. In In the Philippines, Marcos presented
this type of government, there are not existing himself as the individual who could break
local congresses. a long pattern of corruption and inadequate
leadership. He used such slogans as “Rice
Nearly any government can be said to and Roads” and “This Nation Can Be Great
centralize their power to a degree. The term Again!’ to rise in power. He imposed martial
is applied to governments that vest limited law and claimed that it was the prelude to the
authority to its subjects and often used in creation of a “new society”. But Marcos, his
comparative terms, such as “highly centralized wife, and their closest associates practiced
government” or “weakly centralized corruption with impunity. They plundered the
government”. Philippine economy through their system of
“crony capitalism,” in which they controlled
Actually, the majority of governments in monopolies in industry, communications, and
the world are centralized, be it a top-heavy banking.
government or a dictatorship. The citizens of
a centralized democracy elect their politicians When Marcos and his family left the
and then have little involvement until the next Philippines, they took with them some 300
election cycle. Too much centralization means crates of prized possessions and more than 28
dictatorship, and in a dictatorial government million cash, in Philippine currency. In 1995,
all the rights of the people perceived to the Philippine government was able to auction
be harmful to the leader or leadership are off three jewelry collections of Imelda Marcos
curtailed. worth $13 million. In 2003, the Philippine
government was awarded $650 million from
History shows that the more centralized a frozen banks accounts in Switzerland that had
government is, the less freedom the people have. belonged to Ferdinand Marcos.
The less freedom the people have, the more a
government is vulnerable to corruption. Even if D. Corruption and poverty
a dictatorship started in a very “noble objective”,
it always end up in corruption perpetrated by the In the recent past, many political
leader himself or by the people around him or her. establishments have been caught in scams
and scandals, with leaders amassing wealth,
Leaders and their regimes very rarely call resources and power. The magnitude of
themselves “dictator(ship)”, and usually do the systematic fraud, deceit, chicanery,
not consider themselves to be oppressive, or embezzlement and theft is shocking. This
simply do not admit it. Most often, dictators appropriation of public funds directly affects
portray themselves as benevolent and savior, the whole society most especially the poor
an absolute ruler who exercises his or her people.
political power for the benefit of the people
rather than exclusively for his or her own Corruption is a symptom of something gone
benefit. wrong in governance. Institutions designed
to govern the relationships between citizens
Hitler is a classic example of a dictator. He and government are used instead for the
rose to power with a slogan “freedom and personal enrichment of public officials and the
bread” and promises order, prosperity, and provision of benefits to the corrupt.
community to the German people. But his
dictatorship ended up in rampant corruption All forms of government are susceptible to
and holocaust that kills thousands of people. corruption, or political corruption to be exact.
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While corruption may facilitate criminal • Extortion and robbery
enterprise such as drug trafficking and
money laundering, it is not restricted to While bribes may be demanded in order to do
these organized crime activities. In some something, payment may also be demanded
nations corruption is so common that it by corrupt officials who otherwise threaten to
is expected when ordinary businesses or make illegitimate use of state force in order
citizens interact with government officials. to inflict harm. This is similar to extortion
The end-point of political corruption is by organized crime groups. Illegitimate use
a kleptocracy, literally “rule by thieves”. of state force can also be used for outright
Forms of corruption vary, but include the armed robbery. This mostly occurs in unstable
following: states with lacking control of the military and
the police. Less open forms of corruption is
• Bribery preferred in more stable states.
A further, more practical problem with We can also add as the third factor the
central government failure is that often, maturity of local government system and
because of the poor performance at the local local citizenship. In each country, as we
level, everyone who can afford it avoids have the long traditions of local government
governmental services. Instead of going to the historically, the local government and local
public school, public hospital, or public bank, people have had the long experience of local
citizens begin to look for private schools, governance. It is natural that each locality
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has accumulated the know-how and skill of easily or to change their territories
operating local governance and nourished the (e.g., merge them with neighboring
philosophy of local autonomy. areas). Secure existence requires
that members of local bodies only be
The factors mentioned above are promoting dismissed for specific, predetermined
the decentralization reform and then affecting reasons and under formal procedures
the reorganization of local governance. In that require the dismissing authority
turn, the local governance should exert every to show that the dismissed person has
effort to achieve the characteristics of good violated the law. Clear criteria and
governance as mentioned above. procedures are also needed in cases
of dissolution of communes and
One of the most significant effects of the municipalities or for the alteration of
interaction of the various advantages local their territories.
governments have over central governments
is that the state as a whole gains legitimacy. 2. Resources and autonomy
When the citizens trust in their officials and
are more actively involved in the betterment The success of decentralization efforts
of their community, their relationship to depends to a very large extent on the
the state as a whole is also improved. Thus, availability of sufficient resources and
while the authority of the central government the possibility of using these resources
may be diminished by decentralization, the autonomously. This requires, inter alia,
legitimacy of the state as a whole is enhanced.
Decentralization-led changes must therefore • the right of local governments
be seen as not only a “local versus central” to collect local taxes and fees
government phenomenon, but rather as a way and to get funds from the
to mutually benefit both levels of government central government necessary
and the citizens simultaneously. for the execution of tasks
transferred to them;
C. Conditions for successful
decentralization • the right to spend this money
without excessive prior control
How can the goal of empowering local by higher levels of government;
governments to act as efficient providers of
services and as agents of local development • the right to take decisions on
be achieved? Practical experience as well as local activities including local
scholarly studies indicate several conditions development projects without
necessary for successful decentralization. undue interference by national
planning authorities and line
1. Secure existence ministries.
We need, however, to bear in mind that What is local about local governance need not be
not every act of governance practiced the actor but rather the needs, interests, priorities,
at a local level would constitute local participation, control and well-being of the local
governance. It is possible to have central population. It is important to have this in mind.
governance or even foreign governance at Otherwise, we will remain in the structural
the local level. What determines whether constraints of equating local governance to local
governance is local or not is the extent to government. For the sake of argument, we will recall
which the local population is involved [as that not all local governments work in the interests of
actors of governance] in the steering, i.e., in the local populations. Some local governments can
determining the direction according to their become dictatorial and exploit the local populations
local needs, problems, and priorities and the
3
to serve the interests of local leaders.
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A. Establishing Local Good A decentralized body “in
Governance comparison to national government,
is more accessible, more
The main purpose of decentralization is not sympathetic and quicker to respond
decentralization per se, but the development to local needs”. On a local level,
of local good governance. One of the most programs and services can be more
important issues in the government reform is easily adapted to particular local
how to establish local good governance in the circumstances and needs. This is
decentralized system. so because local authorities are
obviously more knowledgeable
Of course in establishing local good about a local situation than are
governance, all the eight characteristics of authorities who are far away from
good governance we mention earlier must realities at the grass-root level. As
be fulfilled. With regards to this, among the a result, the necessary information
most important reasons for us to give more to plan such programs and services
authority to lower levels of government are: is more readily available and the
the greater efficiency and accountability of chances of success are consequently
local governments; the positive effect such higher.
authority-shifts have on local development;
the enhancement of democracy and The close relationship between citizens
protection of liberty that local governance and government at the local level
has on the citizens; and the greater ability fosters accountability. It has been
to protect the rights and values of minority pointed out that decision-making close
populations. to the people is an excellent instrument
to prevent governments from abusing
1. Efficient and accountable their powers.
administration
This is so for at least two related
The desire for a more efficient reasons. First, it is more difficult
administration has motivated many of to hide corruption among those in
the recent constitutional and legislative authority when the citizens know
changes in countries all over the world. the officials than in situations where
However, experience has shown that “the Government” is far away and
central governments are often unable inaccessible. Thus, persons in authority
to successfully implement efficiency- in the local government are generally
building policies and programs. less likely to have the opportunity to
hide their corruption than are persons
Local governments have the potential in authority in central government.
to perform better. This is based on any Second, it is easier to hold local
of several reasons, listed below. One officials and elected office-bearers
must remember, however, that better accountable for their actions than it is
administration is not an automatic to impose accountability on politicians
result of decentralization. Still, if local at higher levels of government, as
governments are properly equipped members of local governments are
to fulfill their tasks, the chances for often less protected politically than the
achieving “better government” through corresponding official in the central
decentralization increase. government.
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Both the availability of information
necessary for taking proper actions
and the potentially higher degree of
accountability will lead to a better use
of available resources. This will allow
doing more with limited resources. As
one author recently stressed:
“Decentralizing spending
responsibilities can bring substantial
welfare gains. Government resources
can be allocated most efficiently if
responsibility for each type of public
expenditure is given to the level
of government that most closely
represents the beneficiaries of these
outlays”.
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Beneficiaries who “own” a project decentralized countries. The right of
will be more likely to assume the citizens to participate in decision-
responsibility for the project’s making procedures on a local level
maintenance. The ability to help furthers true democracy.
in the early planning phases of a
development project in turn also “[Decentralization] builds a sense
encourages the local population to of community and permits more
carefully monitor and protect the meaningful participation in self-
results of the planning. Psychological government. In many countries, the
self-interest mixes with financial autonomy granted to local units is
self-interest to encourage the citizens designed to assure self-determination
to actively promote the project’s and the rights of minorities and their
successful implementation. In Nepal, members against abuse by national
for instance, forests are much better majorities”.
preserved since they have been handed
over to village-based “user groups”. This, however, implies that local
entities are organized in a way
3. Democracy and protection of liberty allowing for real participation and
that national authorities do not
The notion of democracy is not tolerate the creation of autocratic and
restricted to participation in national authoritarian forms of government on
elections. Although the right to elect the local level. Distribution of power
leaders of national government is to different levels of government and
certainly a part of the democratic the competition between these levels
principle, democracy also includes the allows for a system of checks and
ability to influence the decisions that balances that is likely to set limits on
directly affect a person’s life and the the central government if it attempts
ability to live in freedom and liberty. to overstep or abuse its powers.
Local governments are able to provide Thus, decentralized government also
these aspects of democracy in a way constitutes a specific and extended
that central governments often cannot. expression of the basic constitutional
principle of the separation of powers.
As stated above, local level
administrations can be more accessible Moreover, decentralization allows, to
for the average person – and thus more a certain extent, for a specific kind of
“human” – than a very distant and political power-sharing which in turn
mighty central administration can be. contributes to political stability. For
example, if a government is ousted
This gives democracy a clearly local from power by a rival political party,
dimension. Although a state’s respect the original government’s political
for democracy and individual freedom party may still control some local
does not depend on decentralization, governments.
such form of government may further
these two fundamental values. The This is compatible with the role of
idea that local self government opposition on the national level but
promotes democracy and individual mitigates the harsh principle of “the
liberties is deeply rooted in many winner takes all” at the local level.
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Thus, it adds to political stability. Such into effect efficiently. As more democratic
a stabilizing effect is shown in Nepal, and efficient localities are needed, there
where frequent changes of government must be the development and reform of local
at the national level during the past government and local people. The local
few years have little affected the government’s reform by itself is difficult
activities of local authorities who were through its own effort, because of the lack of
able to conclude their terms of office driving force in itself. Also, the development
without interruption. On the other of local people’s capacity is not easy through
hand, where the central government their own effort. The interaction between local
is very strong and even small local government and local people enables mutual
expenditures must be approved by change and reform. This is one of the most
the competent minister in the central important aspects of new local governance.
government, political instability at the
center directly affects the local level. Local Governance Evolved:
is strengthened to play that role effectively. problem found among almost all players
For example: involved in decentralized governance. The
difference is in the extent and degree to which
• While in many countries central the capacity is lacking.
government authorities hesitate to
embark on decentralized governance In the context of an increasingly globalizing
policies for reasons related to world, the challenges and requirements
inadequate capacity at the local level, of capacity-building for local governance
it has been discovered that the same should always be analyzed and diagnosed,
central governments do not possess taking into account the full range of
the adequate capacity to analyze, stakeholders’ and actors’ analysis at the
formulate, and effectively manage community, local, national, regional and
decentralized governance policies. international levels. Such an analysis should
always be conducted in a participative
manner to allow the stakeholders and actors
involved in local governance to share a
• While many donors and common understanding of one another’s
development partners have strengths and weaknesses. This would in
a tendency of blaming local turn facilitate the process of cooperation,
governments of having no harmonization, and synergy in capacity-
capacities to implement local-level building activities. The framework given in
development projects, it is often the diagram below was used to conduct a
the case that the same donors and governance capacity assessment in Uganda,
development partners do not have Rwanda, Liberia, and Tanzania, and was
the requisite capacity in terms of found to be very useful.
understanding and working within
the local community’s cultural and Local governance capacity-building for full-
social environments to promote range participation (Four Ps +C)
community sensitive development.
We have belabored the point on local
The real situation in many developing governance as an all-actors-embracing
countries is that inadequate capacity is a situation, because experience has shown that
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in most cases local governance capacity- extent and nature of the participation itself
building programs, projects and activities needs to be understood more deeply.
concentrate on local governments. We need
to maintain the distinction between local We are proposing to examine it using the 4
governments’ capacity-building, which would Ps plus C of participation. If participation
concentrate on local governments, and local has to be complete, it must be done at five
governance capacity-building, which would levels: Priority setting, Planning, Producing,
emphasize strengthening the capacities of all Paying (financing) and Consumption. It is
the actors in governance at the local level. the consumption that leads to livelihood,
This would set the appropriate parameters but when it is not supported by participation
for effective participation in the development in setting priorities, planning, production
process by all actors. and paying, then it is not sustainable. The
biggest problem for developing countries
Diagram 5: Grass-roots local governance
stakeholders and actors analysis framework is that because of very low or sometimes
no income, people expect to participate
Participation is not a matter of only structural in consumption without participating
arrangements. It is also a matter of will and in paying. This makes consumption
capacity. Most advocates of local governance unsustainable because there is no support
as a vehicle for promoting socio-politico- for production5.
economic development always bank very
strongly on the argument that decentralization On the other hand, often those in positions
encourages participation of the local people in of authority concentrate on promoting the
determining their development and well-being. participation of local people in the four Ps,
However, in the context of poor countries, the but they do not provide for participation in
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consumption. The consequence is that the on its part gets money from taxes paid by the
poor do not see any change in their livelihood people; but however efficient and effective a
even when they have participated.6 It should tax system is, if it is taxing a poor population,
be noted that for purposes of mobilizing the local it will yield poor revenues. There is a limit
people to participate, an objective that points to beyond which a hungry person can milk a
the possible improvement in their consumption is hungry cow. The fundamental problem with
more attractive than any other and therefore worth most developing countries is that they suffer
mentioning. from a double weakness: their central and
local governments are weak while at the same
Local governance, when well practiced, more time their private and civil society sectors are
easily and more evidently encourages political also weak (vertical and horizontal weakness).
participation (e.g., in taking decisions and having This double weakness is not only in terms of
a say in who takes up leadership positions), resources (human, material and financial),
production and delivery by narrowing the physical it is also in terms of institutions, systems,
distance between the service producers/deliverers information, networking, skills, knowledge,
and consumers as well as by allowing the private etc.
sector and NGOs to engage in service production
and provision. Conceptually, all countries could be placed
in four categories as follows: the strong ones
However, it has to be recognized that when where the central and local governments
it comes to participation in financing the as well as the civil society and the private
production and provision of these services, sector are all strong A); the partly strong ones
the poor are at a loss. The challenge for where the central and local governments are
developing countries, given their situation of strong but with a relatively weak civil society
extremely low incomes, is how to encourage and private sector (B); the partly weak ones
the poor to participate in financing the services where the central and local governments are
they need. Most poor populations are quick to weak but the civil society and private sector
advocate for participation but when it reaches are relatively strong (C); and the weak ones
the level of participating in the financing they where the central and local governments
still want some donor or central government are weak as well as the civil society and the
to foot the whole bill. The central government private sector (D). Most sub-Saharan African
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countries, especially those that are LDCs, are simultaneously it is at the local community
in category D.7 level good governance is operationalized in its
total capacity. Community based development
A fundamental component of local governance is people side development. Here people are
capacity-building should be dedicated to not only the beneficiaries of the schemes and
strengthening the capacity of local communities plans worked out by someone unknown to
to generate sustainable income. It is true that them who are usually referred to as ‘those
the common practice in African countries where who govern’ but they are the planners,
the central government controls a lion’s share of implementers and also one who evaluate it and
revenue at the detriment of local governments plan for the future.
undermines local governance capacity-building
in respect to priority setting, planning, local One of the important issues any good
capital investment, and eventually consumption. governance has to address is poverty
However, the point that the revenue of local alleviation and in a special way rural poverty
governments is just a component of the financial reduction. The following are some of the areas
capacity of local governance should not be lost. that need specific focus:
Local governance financing should not be seen
from the point of view of central government 1. Rural poverty reduction increasingly
and local government revenue-sharing alone. It requires better allocation and
should be examined in the light of the finance distribution of resources. That
deployment policies of all actors as well. There is, control over resources like
are many financing institutions—local, regional water, land and forest. There is
as well as international—who hesitate to disburse an irrefutable connection between
funds to the local community level either because the asset distribution and poverty
the local levels do not provide guarantees for the alleviation.
funds or because the central government does
not accept such disbursements, or both. This 2. Institutions, markets, technology
jeopardizes the development of the capacities of policy and asset arrangements need to
local communities to manage programs, projects, reflect the critical role of food security.
and funds even when they have participated in the We have to go further and call for food
formulation of such programs. sovereignty.
A local governance policy that is conceived 3. Increased growth alone will not lead to
with capacity-building in mind should alleviation of poverty. How this growth
include provisions for financing systems is redistributed to all the segment of
that would put funds at the disposal of the the population is the crucial aspect.
local level so that such funds not only cater
to the needs of local communities but also 4. The most disadvantaged and
provide opportunities for them to develop vulnerable groups should get the
revenue generation and financial management priority in terms of poverty alleviation
capacity.8 programs. Often times these are the
people who are real producers, but do
C. Development Work in not have access to what they produce.
Decentralized Governance
5. Partnership and participation is the
For community based development, good strategy that would ensure the overall
governance becomes very important and efforts to reduce poverty.9
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6. Finally, poverty alleviation cannot be governance laid equal stress on all the four
looked at only from the perspective of agents of development.
economic parameters as is being done
now. Poverty is fundamentally a social D. Problems of local governance
and political problem. Its economic shade
is only the symptom. This means the Most countries have local authorities and
restructuring of the social order alone will some kind of decentralization does exist,
address the elimination of poverty and at least on paper. Nevertheless, local
misery from the face of the earth. governments are too often unable to perform
even the very limited tasks they have been
Good governance also calls for a decentralized delegated. An analysis of such situations
development and administration. This form of usually reveals many peculiarities stemming
governance would ensure that the citizens are from the particular political, historical, legal,
not just objects of development but subjects and socio-economic traditions of a specific
who take responsibility of their lives and their country. Nevertheless, it is possible to list
development. The above-presented diagram some common problems:
explicitates the need to build interface
between various stakeholders in a society. • Lack of resources. This is a common
Within the given political system usually problem in many countries. Local
one highlights the interaction between the governments have some powers to
government and the people. But the discourse levy local taxes and fees but these
on local governance and decentralized monies are difficult to collect, and if
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collected are often insufficient to fulfill agents of the central government, and
the tasks assigned to them. Access therefore rejects their authority as
to central funds may be limited and representatives of the community’s
difficult. interests.
The turning point came in 1986 when one Concessions were made to the anti-
million Filipinos from different walks dictatorship movement without creating a
of life converged on a major highway, significant threat to the old social order, so
Epifanio De Los Santos Avenue (EDSA), to the progressive agenda such as social justice,
assert what has become their own brand of human rights and participation principles
political participation—‘people power.’ After were included. Decentralization, however,
deposed President Marcos fled the country, was also written into the Constitution,
Cory Aquino assumed the Presidency with which was a significant change to previous
corresponding emergency powers. Aquilino forms of government. Indeed there was
Pimentel, author of the Local Government a widespread association of centralized
Code, was chosen as Secretary of Local government with Marcos-era authoritarianism
Government and tasked with appointing and the concurrent presumption that high
officers-in-charge (OICs) in all the provinces levels of decentralization essentially favored
who would be supportive of President democracy.
Aquino.
B. Decentralization in the Philippines
This was a crucial time in Philippine history
because President Aquino was presented In addition to adopting a system with a
with the opportunity to actualize real change. bicameral legislature and president, the
The popular movement that had kicked out 1987 Constitution also provided for the
Marcos comprised a broad spectrum of the decentralization of the administrative system
population: from the national democrats on as discussed above. The Constitution—in
the left who had been fighting the dictatorship Article Ten, Section 3—called for the
since the seventies, to the country’s elite who enactment of a law on local autonomy and
had turned against Marcos in the final hours to decentralization:
protect their own interests.
“The Congress shall enact a local
It is very tempting to say that coming government code which shall provide
out of martial law was the start of re- for a more responsive and accountable
democratization. Some schools of thought local government structure instituted
would, however, question this. Although the through a system of decentralization
progressive forces on the left had been the with effective mechanisms of recall,
linchpin of the anti-dictatorship movement, as initiative, and referendum.”
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In Section 25, the Constitution also provides social welfare, and d) environmental
that “The State shall ensure the autonomy programs from national government
of local governments.” Aquino considered agencies to provinces, cities, and
decentralization to be the key element of municipalities, with corresponding
re-democratization (Bossert and Bowser, power and resources, and to a limited
2000). Five years later the Local Government extent, to barangays;
Code (RA 7160) was passed by Congress.
This is a devolution policy, by definition a • increased the share of LGUs from
political decentralization involving transfer internal revenues and enlarged local
of substantial functions, resources and revenue-making powers;
power from the central to the periphery.
Administrative decentralization or de- • mandated wider private sector
concentration had been resorted to several and people’s participation in local
times in the past as powers were transferred government decision-making and
not to local government but to the local, implementation, and instituted local
field offices and extended arms of national special bodies such as health boards,
agencies. In devolution, according to the school boards, development councils
Code’s premier author, Aquilino Pimentel and pre-qualification, bids and awards
Jr. (2000:1), “only Constitutional and legal committees, and,
limits constrain the use of devolved powers,
functions, and money.” Decentralization • gave new meaning to local democracy
is argued to improve governance and and autonomy by instituting measures
public service by increasing allocative and to promote local accountability.
productive efficiency (World Bank, 2001
[a]). Local governments can determine In the area of human resource management,
local preferences better than the national local governments are given authority by the
government and can therefore tailor services Code for organizational development and
to these preferences. Decentralization HRM in the following provisions:
is also supposed to rationalize costs. By
taking government closer to the consumers, “Section 3 (b) - There shall
accountability is enhanced, bureaucracy is be established in every
minimized, and local costs are better taken local government unit an
into account. With devolution, “the nation’s accountable, efficient, and
governing structure is being recast from top dynamic organizational
to bottom in a process as consequential on structure and operating
the political front as liberalization initiatives mechanism that will meet
are on the economic front” (Hutchcroft, the priority needs and
1996: 14). It was seen as a triumph of civil service requirements of its
society that backed Aquino and of local communities”;
officials who were tired of securing permits
from Manila to do as little thing as buying “Section 18 - Local government
a garbage truck (Arroyo, 2001). The Code units shall have the power
aimed to achieve those goals by its sweeping and authority to establish an
provisions that: organization that shall be
responsible for the efficient
• devolved the responsibility for basic and effective implementation
a) health services, b) agriculture, c) of their development plans,
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program objectives and the people and thus provides them an
priorities”; opportunity to participate in day-to-
day affairs. The LGC also acts upon the
“Section 76 - Every local constitutional mandate to institutionalize
government unit shall design active participation of citizens and POs/
and implement its own NGOs in local governance.
organizational structure and
staffing pattern taking into C. The Local Government Units
consideration its service (LGUs)
requirements and financial
capability, subject to minimum An archipelago of 71 million inhabitants,
standards and guidelines the Philippines is a unitary state with a
prescribed by the Civil Service presidential system of government. The
Commission.” territory is divided into 15 administrative
regions, including the Autonomous Region
The Code also provides for a Local of Muslim Mindanao in the south. Local
Personnel Selection Board in every locality government units—provinces, cities,
that shall advise the local chief executive in municipalities, and barangays (villages)—
personnel recruitment matters, in an attempt are political subdivisions under executive
to limit the influence of politics in selection. supervision of the President and legislative
control of Congress. The provinces
Essentially, decentralization brings the coordinate the delivery of basic services
government closer to the influence of while cities and municipalities bear the
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responsibility of direct service provision as belonging to the same sub-tier as the
to villages. Local governments are municipalities but are given more central
empowered to create sources of revenue. government subsidy to fulfill their duties.
LGUs in the Philippines are classified Though they have the same governance
according to income level and most of arrangements as the municipalities, a number
them belong to lower-income categories. are awarded further distinctions by Congress
The lowest level of local government, in view of their large populations. As such,
the barangay, is supervised by either the they are denoted as charter cities and fall into
two classification groups for purposes of self-
municipality or the city. government - chartered cities and component
cities. Chartered cities, which include a
The categories of local authorities in the number regarded as Highly Urbanized Cities,
are accorded significant powers of self-
Philippines are as follows: government and individual representation as
• 1 Metropolitan Government; congressional districts (which are otherwise
based on provincial boundaries), while
• 1 Autonomous Regional Government; component cities are recognized only as
• 1 Special Administrative Region; titular cities. Three metropolitan areas exist
in the Philippines, including the National
• 78 Provinces; Capital Region Manila, which consists
• 117 Cities; of the city of Manila and 16 neighboring
cities, including Quezon City (the largest
• 1,600 Municipalities; and in the country). The Manila Metropolitan
• 42,000 Barangays Development Agency is a division of central
government, with a chairman appointed by
Each barangay is headed by a barangay the president.
captain, who presides over the barangay
council (sanggunian). The League of The province is however, the primary unit
Barangays currently has 41,939 members and of local government in the Philippines,
is the largest NGO in Filipino civil society. of which there are 79 in number (as
Barangays also have a separate youth council well as the National Capital Region).
to oversee the provision of sporting and Provinces are largely modeled on the
cultural activities for local youth. three branches of central government,
with an elected executive governor and
The 1,600 municipalities are units recognized their vice presiding over the provincial
as towns under the four-yearly population legislature. Similar to the sub-tier, there is
audits used to classify the distinction between ex-officio representation for barangay and
towns and cities. Each municipality is headed youth council provincial presidents. The
by an executive mayor, who alongside the vice provinces are given presidential oversight
mayor, eight councilors and the presidents of through the Department of Interior and
the youth council and the local barangay union Local Government and grouped into 17
forms the municipal council. All are elected to regions for administrative purposes at
three-year terms and may not serve more than central government level. Two regions
three consecutive terms. have political jurisdiction as recognized
autonomous groupings of provinces,
The 117 recognized cities belonging to the namely the Autonomous Region in Muslim
League of Philippine Cities are regarded Mindanao in the south west (adjacent to
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Local Good Governance page 35
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Malaysia) and the Cordillera Administrative and are similar to the provisions of Section
Region of the indiginous Igorot in the north. 468 for Provinces. They stipulate that: “The
Sangguniang Panlalawigan, as the legislative
The local government personnel system is body of the province, shall enact ordinances,
primarily governed by personnel policies approve resolutions and appropriate funds for
of the Civil Service Commission and the general welfare of the province and its
the applicable provisions of the Local inhabitants pursuant to Section 16 of this code
Government Code, i.e. the Creation of and in proper exercise of the corporate powers
Local Personnel Board and the Policy of the province as provided for under Section
on Human Resource Development. The 22 of this code and shall:
merit system is the guiding principle in
the selection, recruitment and promotion 1. Approve ordinances and pass resolutions
of the officers and employees of the local necessary for an efficient and effective
government bureaucracy. Most locally provincial government and, in this
appointed officers and employees are connection, shall:
career personnel with security of tenure
who can only be removed for cause. But i. Review all ordinances approved
culture, politics, and technical inadequacy by the sanggunians (councils)
have continually tarnished the image of of component cities and
the civil service, both local and national. municipalities and executive
All local government employees are orders issued by the Mayors of
covered with limited medical care and said component units to determine
are insured in the Government Service whether these are within the scope
Insurance System. Discipline over career of the prescribed powers of the
employees is lodged with the local sanggunian and of the mayor;
chief executives and the Civil Service
Commission. ii. Maintain peace and order by
enacting measures to prevent and
Local Government Functions suppress lawlessness, disorder,
riot, violence, rebellion or sedition
Local governments have four major categories and impose penalties for the
of functions: violation of said ordinances;
iii. Subject to the availability of vii. Establish and provide for the
funds and to existing laws, rules maintenance and improvement
and regulations, provide for the of jails and detention centres and
establishment and operation of institute a sound jail management
vocational and technical schools programme and appropriate funds
and similar post-secondary for the subsistence of detainees and
institutions and, with the convicted prisoners in the province;
approval of the Department of
Education, Culture and Sports viii.Establish a provincial council
and subject to existing laws whose purpose is the promotion
on tuition fees, fix reasonable of culture and the arts, coordinate
tuition fees and other school with government agencies and
charges in educational non-governmental organizations
institutions supported by the and, subject to the availability of
provincial government; funds, appropriate funds for the
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Local Good Governance page 39
______________________________________________________________________________
support and development of the dichotomy or relationship between the local
same; chief executives and their deputies is quite
distinct. The provincial governor or city and
ix. Establish a provincial council for municipal mayor manage their political units
the elderly which shall formulate including their respective bureaucracies.
policies and adopt measures The vice-governor or vice city or municipal
mutually beneficial to the elderly mayor acts as presiding officers of the local
and to the province and subject legislative councils. Local policy formulation is
to the availability of funds, a shared responsibility between the local chief
appropriate funds to support executives and the members of the councils.
programmes and projects for the
elderly and provide incentives Local Government Finances
for non-governmental agencies
and entities to support the Intergovernmental fiscal relations
programmes and projects of the
elderly; and Fiscal relations between national and local
government centre on the following major
5. Exercise such other powers and perform areas of fiscal administration:
such other duties and functions as may be
prescribed by law or ordinance”. • Allotment of internal revenue shares;
• Sand and gravel tax; • The city may levy and collect among
others any of the taxes, fees and
• Professional tax; other impositions that the province or
municipality may levy and collect.
• Amusement tax on admission; and
Barangays:
• Annual fixed tax per delivery truck or
van of manufacturers or producers of or • Taxes and fees;
dealers in certain products.
• Service charges; and
Municipalities:
• Contributions
• Tax on business;
A comparison of the income profiles of local
• Fees and charges; governments for the year 1992 (first year of
Local Government Code implementation) and
• Fishery rental or fees and charges; year 1994 showed a decrease in income from
local sources and an increase in national aid
• Fees for sealing and licensing of weights and allotments. In 1992 the income from local
and measures; and sources represented 42.76 per cent of total and
non-tax revenues 15.99 per cent). During the
• Community tax. same year aid and allotments from the
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Local Good Governance page 43
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Table 4. Growth Rates of Local Government Units (1991-1995)
possible explanation for the decrease in incomes apparently due to the pains of the transition
from local sources is the suspicion represented to decentralization. For the period 1992-1995
70 per cent of the local total income in 1995. revenues from taxation had an average growth
This 24 per cent increase of the statutory of 22.55 per cent compared to the growth rate
allotment was due to the implementation of of non-tax revenues that was only 6.21 per cent.
the 40 per cent Internal Revenue Allotment Meanwhile aid and allotments had a growth
(IRA) shares of local governments that became rate of 50.84 per cent for the same period. There
effective on the third year of implementation is a need to reverse this trend of increasing
of the Local Government Code. While the dependence of LGUs on IRA in order to provide
national subsidy increased from 57.24 per cent the decentralization scheme with a solid financial
to 70.16 per cent, the income from local sources base that will institutionalize local autonomy in
decreased from 42.76 per cent to 29.84 per cent. the long run. Local income should be raised to
One that local governments became complacent a higher level than the IRA a local government
in collecting taxes after receiving the maximum receives from the national government. An
IRA shares allowed in the Local Government ideal initial percentage ratio between local
Code. In effect, the significant increase in sources and grants or subsidies from the
the IRA of Local Government Units (LGUs) national government is 50-50. However, local
exhibited substitutive effect in terms of local tax governments in the long run should aim for at
collection. The other logical explanation is that least a 70 to 30 per cent ratio in favour of local
local governments were still in transition and sources to be truly autonomous and self-reliant.
the exercise of the local taxing powers by local This could be achieved under an appropriate and
authorities were not optimized. more responsive policy environment on fiscal
federalism.
Growth rates of local revenues/IRA (1991-
1995) Specific revenue sharing
The growth rate of local revenue sources during Some programmes and projects for
1992-1995 indicated an erratic performance LGUs are based on certain specific grant
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page 44 Local Good Governance
______________________________________________________________________________
criteria/formula such as urban population, Development Project (MDP) providing local
incidence of poverty, population growth authorities with loans and grants on a 70 to 30
rate, annual average income, degree of urban per cent ratio respectively in order to address
environmental degradation, deficiencies municipal infrastructure requirements.
in basic services such as sanitation and
waste water disposal, storm drainage and In the social sector, some education and
flood prevention, solid waste collection and health projects of LGUs are also provided
disposal, roads/traffic, water supply, public with central government grants based on their
markets, slaughterhouses, bus terminals, etc. needs. Besides selected LGUs are required
to put-up equity for the project to ensure
Table 5. IRA Percentages of Provinces in
goal congruence between national and local
Relation to Total IRA authorities. A similar financing scheme is
also used in the case of environmental and
NCR 8.95 agricultural projects that fall within the
Region I 34.06 ambitions of the national government social
Region II 38.67 reform agenda. LGUs are provided fund
Region III 33.81 support based on differentiated schedules of
Region IV 33.62 loans, grants and an equity mix depending on
the income level of LGUs and the nature of
Region V 36.44
a particular project or sub-project component
Region VI 28.88
(i.e. revenue generating or non-revenue
Region VII 25.53
generating). Higher subsidy is given to lower
Region VIII 32.89 class LGUs and for non-revenue generating
Region IX 25.16 projects.
Region X 29.41
Region XI 29.18 However, national government grants to
REgion XII 29.78 LGUs for certain devolved responsibilities and
activities have to be rationalized in terms of
The above-mentioned criteria are basically equity, externalities and economies of scale.
used by the World Bank funded Municipal Loans and grants for
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Local Good Governance page 45
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Figure 2. Growth Rates of Revenues of Local Government Units
Figure 3. Internal Revenue Allotment Sharing as to Municipalities, Cities and Provinces (1995)
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page 46 Local Good Governance
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- End -
______________________________________________________________________________
References:
4. Encarta Encyclopedia
6. Good Governance: As if People Matter by Dr. Prakash Louis, Executive Director, Indian
Social Institute, This is the revised version of the paper presented in the Workshop organised
by International Jesuit Network for Development (IJND) during the World Summit on
Sustainable Development at Johannesburg August- September 2002.
9. Decentralization - Why and How?; by Walter Kälin, Professor for International Public Law at
the University of Berne, Switzerland
10. Human Resource Challenges in a Decentralizing State: Some Notes, By Ma. Ernita T.
Joaquin
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Local Good Governance page 61
______________________________________________________________________________
11. Legislating for Citizens’ Participation in the Philippines; by NINA T. ISZATT, Policy Advocacy
Officer for KAISAHAN tungo sa Kaunlaran ng Kanayunan at Repormang Pansakahan, a
Manila-based NGO working in the fields of agrarian reform and local governance.
12. Local government in The Philippines; Government system based on US and Spanish models
under review; By Andrew Stevens, Political Editor.
13. Local government in Asia and the Pacific; A Comparative Study; Country paper: Philippines
_____________________________________________________________________________________________
(Footnotes)
1
Refer to Kousar J. Azam (ed). Federalism and Good Governance: Issues Across Cultures. South Asian
Publishers: New Delhi, 1998.
2
Most decentralization policies, programmes and activities in African countries are being conceived within these
two planes. The cases of the decentralization policies and programmes in Uganda, Rwanda and South Africa are
illustrative of this. See Apolo Nsibambi (Ed.): Decentralization and Civil Society in Uganda: The Quest for Good
Governance (Fontana ublishers, Kampala, 1998), and Government of Rwanda, Ministry of Local Government and
Social Affairs: Decentralization Policy.
3
See John-Mary Kauzya: “Local Governance, Health and Nutrition for All: Problem Magnitude and Challenges
with Examples from Uganda and Rwanda”, a paper presented during the Global Forum on Local Governance
and Social Services for All (Stockholm, Sweden, 2 to 5 May 2000). An interesting discussion is presented in
the report of the Forum: Responding to Citizens’ Needs: Local Governance and Social Services, UNDESA and
UNDP, 2001. A fairly exhaustive survey of literature concerning local governance is presented by Jeni Klugman
in “Decentralization: A survey of literature from a Human Development Perspective”, Occasional Papers by the
Human Development Report Office, New York 1994.
4
See Peter Abrahams: A Wreath for Udomo, (African Writers Series).
5
We must add that the causes of low participation of grass-root people in Africa is not only a consequence of
poverty in terms of income. The whole issue of participative capacity needs to be assessed to include knowledge,
skills, institutional arrangements, awareness, opportunity, etc.
6
As an example, the Mombela Local Municipality Integrated Development Plan states the objectives of the
participation in the IDP to include: obtaining inputs, ensuring acceptable levels of representation, ensuring mutual
consensus, ensuring focus on resource mobilization, and promotion of good governance. There is no objective
concerning shifts and increases in consumption of the poor.
7
This idea was discussed by Ejeviome Eloho Otobo in his paper “Globalization, economic governance and African
Countries” during the Expert Group Meeting organized by the United Nations Department of Economic and
Social Affairs, 28 September 1999.
8
The Community Development Fund in the Decentralization Policy of Rwanda has such an objective. It provides
that 10% of the annual revenue of the Government be put in the fund for community development. The
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page 62 Local Good Governance
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arrangement minimizes the administrative cost of the funds so that as little as possible of the disbursed funds gets
to the local level without being reduced.
9
Adapted from Rural Poverty Report 2001: The Challenge of Ending Rural Poverty. Oxford University Press
2001.
10
Article 82 Title XI, 1899 Malolos Constitution
11
Art. X. Sec. 9
12
See Sec. 446, 457, 467, of Republic Act 7160 and Sec. 93 Rule XVII 1991 IRR-LGC
13
Presidential Declaration 826
14
Go, M. G, Gov’t accused of undermining LGC Manila Times, 4 October 1997
15
DILG Opinions Nos. 67, 86,188-1993; 20-1995; 251-1992
16
DILG Opinions Nos. 103, 340 – 1992; 248-1993
17
R.A. 7160 Sec. 20 (a)
18
R.A. 7160 Sec. 187, DILG Opinion No. 16- 1998
19
R.A. 7160 Sec. 11 (c)
20
LGC Implementing Rules & Regulations Art. 44 (e)
21
R.A. 7160 Sec. 447, 458, 468, See also LGC-IRR Rule XXIII on Local Special Bodies
22
R.A. 7160 Sec. 102-105
23
R.A. 7160 Sec. 116
24
R.A. 7160 Sec. 98 – 101
25
R.A. 7160 Sec. 37
26
R.A. 7160 Sec. 106 – 115
27
R.A. 7160 Sec. 112
28
DILG Memorandum Circular No. 89 Series of 2001
29
Study on People’s Participation in Local Development Councils, presented by Rene Brion, Director, DILG at
the 10.10.10. Celebration: CSO Conference on Participatory Local Governance 7-9 October 2001 Traders Hotel
Manila
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Local Good Governance page 63
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30
Republic Act 7279, The Urban Development and Housing Act of 1992, Sec. 23-24
31
R.A. 6657 The Comprehensive Agrarian Reform Law (CARL) of 1988
33
R.A. 6657 Sec. 2, Sec. 46, Sec. 47 and also Executive Order 229 Sec. 19, and Department of Agrarian Reform
(DAR) Administrative Order No. 5 Series of 1989, DAR Administrative Order No. 14 Series of 1990, DAR
Administrative Order No. 1 Series of 1997
34
R.A. 8550 Sec. 69
35
R.A. 8550 Sec. 75
36
R.A. 8550 Sec. 79
37
Republic Act 7160 Sec. 2(c), Sec. 27, Art. 54 (a) Implementing Rules and Regulations
38
Republic Act 7160 Sec. 26, Art. 54 (b) Implementing Rules and Regulations
39
See GOLD Rapid Field Appraisals 1-10
40
KAISAHAN, CONVERGENCE, IPG, PRRM, PhilDHRRA, CSP, CODE-NGO
41
In the 10th Congress the Empowerment Bill was filed by Senator Juan Flavier (Senate Bill 1348) and by Rep.
Florencio ‘Butch’ Abad (House Bill 5636).
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