Template-Type: ReDIF-Article 1.0 Author-Name: Benjamin E. Diokno Author-Workplace-Name: School of Economics, University of the Philippines?Philippine Center for Economics Development Institute of Public Economics and Regulation Title: Fiscal decentralization after 20 years: What have we learned? Where do we go from here? Abstract: Local government units (LGUs) in the Philippines have been given significant resources through grants (called internal revenue allotment or IRA) and taxing powers. But after 20 years, LGUs have become even more dependent on the IRA. A body of evidence suggests no sharp improvement in local public service delivery. The share of local budgets devoted to devolved functions has declined, due to creeping re-centralization of health and social welfare functions, increasing substitution of centrally controlled funds for local funds, and misplaced priorities on the part of local authorities. The missing link in ensuring better delivery of devolved services is the weak process of accountability. The electoral process failed to hold local authorities accountable for their fiscal behavior. The generation of timely, relevant, and consistent information and indices of performance is the next challenge for better local public service delivery. Such information may be used by voters in holding local authorities accountable. With the threat of a fiscal crisis due to the global slowdown, and with poverty rising, the march toward fiscal decentralization might be constrained. Between reducing poverty or deepening fiscal decentralization, policy makers are likely to choose the former. Classification-JEL: H71, H72, H77 Keywords: local government units, decentralization, public service, intergovernmental grant Journal: Philippine Review of Economics Pages: 9-26 Volume: 49 Issue: 1 Year: 2012 Month: June File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/670/776 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:49:y:2012:i:1:p:9-26 Template-Type: ReDIF-Article 1.0 Author-Name: Gilberto M. Llanto Author-Workplace-Name: Philippine Institute for Development Studies Title: The assignment of functions and intergovernmental fiscal relations in the Philippines 20 years after decentralization Abstract: The 1991 Local Government Code devolved substantial spending, taxing, and borrowing powers to local government units (LGUs). Moving governance closer to the people can generate a welfare gain, but local governments must have adequate revenues to finance local development. The paper examines the current status of the tax-expenditure assignment and the intergovernmental fiscal relations, and identifies areas for reform. There is a need for a clearer and more accountable assignment of expenditure by eliminating particular sections of the code, which serve as a route for national government agencies to be engaged in devolved activities, and for politicians to insert funding for pet projects, which distort local decision making and preferences. There is need as well to review the tax assignment to improve local revenue generation. The allocation of intergovernmental fiscal transfers may be improved by introducing matching grants to improve equalization transfers to local governments, and performance-based grants to motivate greater local revenue mobilization. Without a clear funding source, unfunded mandates imposed on local governments defeat the purpose of the policy objectives set in those mandates. Local government alliances and cooperative undertaking may provide public goods with interjurisdictional spillover benefits. Consolidation, better coordination of local government activities, and resource pooling for better local service delivery are pathways indicated by successful experiences of LGU collaboration. Classification-JEL: H71, H72, H77 Keywords: fiscal decentralization, tax-expenditure assignment, intergovernmental fiscal relations, performance-based grants, decentralization theorem Journal: Philippine Review of Economics Pages: 37-80 Volume: 49 Issue: 1 Year: 2012 Month: June File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/671/777 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:49:y:2012:i:1:p:37-80 Template-Type: ReDIF-Article 1.0 Author-Name: Paul D. Hutchcroft Author-Workplace-Name: Department of Political and Social Change, College of Asia and the Pacific, The Australian National University Title: Re-slicing the pie of patronage: the politics of the internal revenue allotment in the Philippines, 1991-2010 Abstract: Of all the provisions of the 1991 Philippine Local Government Code, none has generated more contention than the internal revenue allotment (IRA)Ņthrough which 40 percent of national internal revenues are to be shared with local governments. The stated goal is to enable provinces, cities, municipalities, and barangaysss to assume the responsibilities devolved to them in the code. For all the celebrated talk of promoting local autonomy and instituting fiscal decentralization, however, the IRA is also very much a story about the enhanced access of local politicians to patronage resources. This analysis surveys the political dynamics of the IRA from its inception through the administrations of Fidel Ramos, Joseph Estrada, and Gloria Macapagal-Arroyo. Particular attention is given to three tensions as they have evolved over time: (a) between the national executive and local politicians, (b) between national legislators and local politicians, and (c) among and within categories of local politicians. Classification-JEL: H7 Keywords: devolution, fiscal decentralization, revenue sharing, patronage Journal: Philippine Review of Economics Pages: 109-134 Volume: 49 Issue: 1 Year: 2012 Month: June File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/672/778 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:49:y:2012:i:1:p:109-134 Template-Type: ReDIF-Article 1.0 Author-Name: Jan Werner Author-Workplace-Name: Institute of Local Public Finance, Germany?Business and Information Technology School, Germany Title: International perspective for a sound intergovernmental finance system in the Philippines Abstract: This paper describes briefly the different forms of equalization, principally focusing on the distinction between revenue equalization versus cost equalization. In addition, some international country case studies from Australia, Canada, Germany, and Switzerland are presented. Based on these country cases, suggestions are made as to how the Philippines can avoid pitfalls in the area of fiscal federalism and what lessons it can learn from other countries for the next 20 years. This will enable readers to decide how common or unique the Philippine experience is, and what achievements and failures can be observed in the Philippines in comparison with other developing countries. Classification-JEL: H7, H2, H1, H77 Keywords: fiscal federalism, grants, fiscal autonomy,Australia, Canada,Germany, Switzerland, Philippines Journal: Philippine Review of Economics Pages: 149-178 Volume: 49 Issue: 1 Year: 2012 Month: June File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/673/779 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:49:y:2012:i:1:p:149-178 Template-Type: ReDIF-Article 1.0 Author-Name: Joseph J. Capuno Author-Workplace-Name: School of Economics, University of the Philippines Title: The PIPER forum on 20 years of fiscal decentralization: a synthesis Journal: Philippine Review of Economics Pages: 191-202 Volume: 49 Issue: 1 Year: 2012 Month: June File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/674/780 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:49:y:2012:i:1:p:191-202