Showing posts with label devolution. Show all posts
Showing posts with label devolution. Show all posts

Saturday, January 21, 2012

Decentralization 10: Devolution, Federalism and Subsidiarity

I posted my paper, Decentralization 9: Ben Diokno Says Recentralize, in the CORRECT Movement (Constitutional Reform & Rectification for Economic Competitiveness & Transformation Movement) group in facebook because that group is advocating "evolving federalism" plus two other issues, economic liberalization and Parliamentary form of government. The exchange has expanded into a long discourse.

Below are the exchanges -- with explicit permission from Carlos Tapang and implicitly from Paul Alli (Paul is a friend way back in the 80s in UP, Carlos I have met 2 years ago) -- minus the comments from Orion Perez, the main convenor of CORRECT Movement. He does not want his comments to be publicized.


  • Nonoy Oplas 

    The subsidiarity principle is very radical, it says that if the smallest social unit can do a task, no need to give it to the higher social or political unit. The smallest social unit in society is the individual, then the household. If an individual can do a task by himself, like taking care of his/her body and health, then there will be no or little need for govt healthcare program, especially for non-communicable diseases (NCDs).

    22 hours ago · 



  • Paul Alli There is a much more cogent reason why decentralization is necessary- the unequal development of regions.
    21 hours ago ·  ·  1

  • Nonoy Oplas But that is why Ben Diokno shot down in his presentation, he said that decentralization is a failure in reducing inequity bet and among regions and LGU localities, that is why he is arguing that the natl govt should do that job, not the LGUs themselves.
    20 hours ago · 

  • Paul Alli Because of corruption among LGU officials. There should be a check and balance bet natl govt and local govt. One sad case is Samar.
    20 hours ago · 

  • Nonoy Oplas 

    Yes, corruption is endemic in both national and local governments. That is why I argued in my paper that we need less and small government, both at the national and local levels. Government should focus on stamping out criminality, protect private property rights and the citizens from killers and other criminals. But government, both national and local, veered into so many sectors and areas, because that's where corruption and extortion can be maximized, like controlling "illegal gambling", "Illegal drugs", "Illegal prostitution", etc.

    19 hours ago ·  ·  2

  • Carlos C Tapang 

    This is very good discussion. I think we should think of government power in terms of points being allocated instead of "areas of responsibility". The problem with thinking in terms of area of responsibility is that those in the national government can claim that because the whole country is their responsibility, it is OK for them to meddle in local affairs. This is the part of centralization that is bad, in my opinion. If we think in terms of power points to be allocated, there should be not so many points allocated to the central government, because otherwise there would be no points left to each of the regions or provinces. Allocate only 10% of the power points to the central government, and give 90% to the LGUs. What this means in practice, with regards to taxation, for example, is that the central government should collect only as much as 10% of the total tax revenue. For each taxpayer, the local government can tax say 9% max, and the national government only 1%.

    15 hours ago ·  ·  1

  • Carlos C Tapang 

    Our situation in Pinas is the opposite of what is desirable: 90% of the power points is concentrated in the central government, 9% to local governments, and 1% to each individual.

    We experience this power on a daily basis. Observe how even the lowest government official behave towards citizens. Go to the local SSS office and see how many people line up for service at any one time. When you finally reach the end of the long line and are finally able to talk to a clerk, observe how the clerk feels more important than you are. Compare that to the behavior of a bank teller in a well-run bank. The government clerk feels no compunction to demand a requirement that you forgot to do, like filling up another form, or getting the signature of somebody else. It does not matter how minor the missing paper is, it must be with you; if not, you either go fill that silly piece of paper and go back to the other end of the line, or worse, come back some other time.

    We have to deal with the central government in most that we do. If we want to buy land, the title gets registered all the way to Manila. If we want to start a business, our corporation papers gets filed with the central government and not the local government. The central government is like a bad CEO who doesn't know how to delegate, who can't trust anybody else to do something well, so he does everything himself, to the detriment of the whole company.

    14 hours ago · 

  • Nonoy Oplas 

    I think local govts are more notorious in imposing stupidity than the central or national govt. Take makati city. So many NOs, Donts, Prohibitions. Buendia and its long blocks is now "No Jaywalking". They say they want people to commute and walk, to leave their cars at home to reduce traffic, but they make crossing streets hard and bureaucratic, penalty is P200 and you have to get your ID at a far out office. Ayala ave is "No loading here, walk to the next block" and "No unloading here, walk to the next block" (about 250 meters away).

    These may seem trivial but if you are subjected to these types of inanities and stupidity every day, you won't be happy. I don't think a central govt would think of this type of stupidity, but a local govt can. That's why I'm never a fan of decentralization or devolution or even federalism/autonomy if such will mean worse bureaucracies at the local levels.

    12 hours ago · 

  • Carlos C Tapang 

    Let's look at this more closely. At some point, yes, we can say that some traffic rules are just silly. The question is whether you prefer such silly traffic rules to come from the central government (in which case all traffic rules in Pinas would be uniformly silly), or from the local government (in which case there is no uniformity and one locality can have silly rules and people disobey them all the time and get a away with it, while another locality has simple rules and people seem tame enough).

    Here's one reason why you want it local and non-uniform: the word is competition. As Orion has just written about, competitition is what will slowly drive local laws and ordinances to parity. I took a taxi once from Pasay to Cubao, and the driver asked permission, before we got started, to avoid Makati roads. I asked why, and the answer was because of the silly traffic rules that you mentioned. People will avoid localities with silly rules and very high local taxes. Businesses, when locating their branches, certainly look at how rational local governments are, among other things.

    The funny thing about local autonomy and uniformity is that, the more local autonomy we have, the more the LGUs tend towards uniformity, because of competition. Here in the US there is variety in certain local ordinances: there are subtle differences among cities, and glaring differences among states. But there are certain things like how easy it is to set up a corporation that trends towards uniformity: there is clearly competition on which state it is easiest to setup a corporation. It used to be that Delaware was the easiest state to setup a corp. Now most states have changed their laws to make it even easier to setup shop. Here in Washington I can setup a corp in less than a day, and less than $200, without ever going to a state government office (I just visit the secretary of state website).

    Of course, there are certain things that will always be different among localities, and this then is what would give them their own character. Our ideal should be not one color for all of Pinas, but rather an array of bold colors to start with, which would gradually dissolve naturally into pastel colors, with each locality having its own natural color.

    11 hours ago ·  ·  2

  • Carlos C Tapang 

    Instead of micro-managing the different localities, the central government should be limited in what it can do. The central government should be limited, as much as possible, to only enforcing simple rules on local government, rules that should be written in the constitution. For example, the Bill of Rights should be uniformly applicable everywhere, and there can be no local ordinance or rule that can contradict any section of the Bill of Rights. Another example of a simple rule that the central government can and should enforce on all localities is a lmit on taxation: the constitution should limit local income taxes to a maximum of, say, 10% or less. Of course, the same constitution should also limit what the central government can collect, which should even be less (as a percentage of individual income, but not necessarily as a percentage of total govt revenues) than what the LGUs are allowed to collect.

    11 hours ago ·  ·  3

  • Paul Alli 

    Decentralization, federalism and local autonomy are concepts meant to free up the potential of local regions to develop itself without much assistance from the national govt. In fact, by virtue of local autonomy parts now of Mindanao, esp ARRM, is moving on its own. But despite this, there is still glaring poverty in the area because of warlordism. We have to recognize the fact that Philippines have unequal development brought forth by colonialism and feudalism. The structures of feudalism still prevails in some areas, and some has been masked by corporatism- or stock distribution e.g hacienda luisita- in order to circumvent modernization of regions. If we really need to get Free Market principles going, federalism shouldl be implemented on a nation-wide scale making regions or LGUs compete among themselves by enticing investors, tourists, transient class, and businessmen to locate or relocate or even travel to better places, be it under a Parliamentary form or Presidential form. I am reminded of my 7 year stay in America. I can always choose to locate in different states offering the best opportunities in life. I moved around from coast to coast searching for the American dream. I ended up now working out here in Samar to develop the coconut industry.

    4 hours ago ·  ·  1

  • Nonoy Oplas It's unfortunate that Orion equates disagreement or agnosticism with federalism aka region-based decentralization as "extremist and knee-jerkishly dogmatic and narrow-minded interpretation...".

    My concept of subsidiarity is that if things can be done by the individual and households, them as the smallest social and political unit in society, then don't give it to higher political units -- barangay, city, province or federal governments. Take healthcare, do we need any local or national govt to remind people that over-drinking, over-smoking, over-eating is bad for one's health? Preventive healthcare in this case won't need govt, local or national, autonomous or federal, it purely falls on the level of the individual, the household and civil society. Even healthcare financing can be done at the personal and household or enterprise level too, people getting their private health insurance. To insist that we still need govt even in simple cases like preventive healthcare, local or national, for me is wrong. Privatization of certain functions, not just decentralization or devolution, is more economical as this will enhance more personal and parental/guardian responsibility.


I left the CORRECT Movement fb group today. Below is my last comment to the group before I clicked "Leave Group". Nonetheless, I thank Orion for the opportunity to exchange notes with him and many of his followers in the said movement.

Orion, a few months ago, I already asked you if you will accommodate people here who only believe in free market, and is/are indifferent on the 2 others -- federalism and parliamentarism. You said fine, so I stayed. Until now, I remain indifferent and agnostic -- someone who neither believes or disbelieves on something, simply indifferent -- about those federalism and parliamentarism. I don't agree with your defiinition of agnosticism of "does not know". For me, neither believe nor disbelieve. Sa tagalog, wala akong paki, ang paki ko lang ay economic liberalization and less government.

From your points above, there is clear message of your intolerance to agnosticism to the 2 other programs of CORRECT, like repeated use of "knee jerkish dogmatism".  Fine. If being in this movement means obedience to all 3 advocacies so as not to be labelled as knee-jerk dogmatism, then this group is not for me. Thank you.
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See also:

Monday, September 20, 2010

Decentralization 6: Local Fees and LGUs' Independence from NG

Posting two related articles that were published in the weekend tabloid, People's Brigada News on different dates....

(1) Local Fees and Decentralization

March 11, 2010

Political decentralization does not automatically mean less government in the lives of the average citizens. Rather, it could mean less central or national government but more local government taxes, fees and regulations in the lives of ordinary citizens.

Last weekend, I went to Cebu City to speak in a forum organized by the Economics Department of the University of San Carlos (USC). Among the things that I noticed in Cebu were the high prices of fuel products. As of March 7, 2010, the price of diesel there was P37.81/liter, unleaded gas was P48.20/liter. That same day when I went back to Manila, the price of diesel was P33.80 a liter, unleaded gas was P44.20 a liter. In short, fuel prices in Cebu City were P4.00 more expensive compared to Manila prices. Why is this so?

Fuel prices in provinces north of Metro Manila are usually P0.50 to P1.00/liter more expensive, for both diesel and gasoline. In Bacolod and Iloilo cities, prices are usually P1.00/liter more expensive than Manila prices. Such price differential is usually due to transportation cost of bringing the fuel products to the provinces.

But why is the price differential in Cebu up to P4 a liter? This is grossly unfair for the Cebuano motorists and passengers.

My hypothesis is that the Cebu provincial and/or City governments imposed a separate fuel tax or fuel surcharge on top of existing import tax + excise tax + VAT by the national government.

Another thing that I noticed in Cebu, was the multiple fees that the local government imposed on passengers who enter the Cebu south bus terminal. I went there on my way to visit my relatives in Barili, a town south of Cebu City. Here are the fees that I observed:

a) taxi/car entrance fee P10,
b) passenger terminal fee P5,
c) toilet fee if one will pee P2,
d) buses parking fee, I do not know how much it is now, but more than a year ago, it was around P80/bus.

Of course the terminal operator -- the provincial or city government -- also collects from the rental of many stalls and food shops inside the terminal. The local government, therefore, collects lots of money from the bus terminal alone. In fairness, the terminal is relatively clean, not air-con but with electric fan, with tv in some sections. But the collections seem to be many, I think.

A friend from Cebu told me that the various fees are also being collected at the provincial Capitol. Like parking fee for cars, and blood pressure fee inside the Capitol clinic, P10/person, if the person is not an employee of the Capitol, for people undergoing some medical check up.

If one will check Cebu's city and provincial revenue codes, one might be surprised at the long list of government services with fees. Like marriage fee, marriage certificate fee, annulment fee, birth certificate fee, baptism fee, death certificate fee, burial fee, and so on. From womb to tomb, there is a fee!

Of course the local governments there will counter that they also provide free services to the poor, like free hospitalization or free coffin to the really poor. And the practice of collecting local taxes and fees from womb to tomb is also being done by other big cities and provinces in the country.

But it is baffling to think how come that so many “government services” are now not free, that average citizens have to pay many local taxes and fees, on top of national taxes and fees. Isn’t collecting just a few taxes and fees a form of public service already, so that average citizens will be able to keep more of their earnings for themselves and their family.

I am not really a fan of political decentralization or devolution, although I am not a fan either of centralization of powers by the national government. Bus terminals can be operated by private enterprises at a lot more passenger-friendly way with zero additional cost to passengers, compared to government operators. Look at those malls. People can enter and exit those malls anyday anywhere, zero entrance fee and zero toilet fee. And still the mall operators make money.

But then some local governments are not after better services to the public, but to collect more revenues from the public. A number of bureaucracies just exist for themselves.


(2) LGUs' Independence from National Government

September 18, 2010

In many political discussions and public administration literatures, decentralization and the relative independence of local governments from the central or national government is hailed as a virtue. It implies that the politicians and administrators of local governments can act more independently from politicians and administrators of the national government, especially the Office of the President.

The share of local governments from Internal Revenue Allotment (IRA) as percentage of their total receipts and revenues is a good indicator of how independent or dependent a local government is. Below are some relevant figures.

Projected revenues of selected big cities for 2010, in P million (except %)

City: Share from IRA / Local receipts / IRA dependence in %

Makati: 731 / 6,592 / 11.1%
Pasig: 748 / 4,202 / 17.8%
Pasay: 506 / 2,323 / 21.8%
Muntinlupa: 573 / 2,236 / 25.6%
Taguig: 723 / 2,325 / 31.1%
Paranaque: 670 / 2,129 / 31.5%
Manila: 1,747 / 5,122 / 34.1%
Quezon: 2,738 / 6,661 / 41.1%

Cebu: 1,041 / 2,120 / 49.1%
Cagayan de Oro: 841 / 1,039 / 80.9%
Iloilo: 548 / 625 / 87.7%
Antipolo: 855 / 678 / 126.1%
Davao: 2,566 / 1,701 / 150.9%

Source: DBM, BESF 2011, Table F.15, http://www.dbm.gov.ph/BESF2011/F/F15.pdf

Among the big cities in the country, Makati, Pasig and Pasay are the least dependent from IRA transfers from the national government. In contrast, the cities of Antipolo and Davao are among those cities that are generally dependent on such transfers.

But while “less dependence” from national government’s transfers may be a virtue, it may also mean that the local government is becoming too harsh on some businesses that are located in their territory by imposing too many business taxes and fees.

Local governments should attract more businesses to locate in their territory because such businesses will create more jobs. When people have jobs, they become less dependent on both national and local governments for welfare.
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See also: Decentralization 5: Privatization and Civil Society, February 22, 2010

Monday, February 22, 2010

Decentralization 5: Privatization and Civil Society

I am posting two related articles below.


(1) Decentralization and Privatization
(posted in "People's Brigada News", a weekend tabloid distributed in southern Metro Manila)

Decentralization and devolution of power from the national or central government to local government units (LGUs) is a favorite topic and advocacy of many LGU leaders and academics. The main reason is that LGU leaders know more about the needs and priorities of their citizens than those in the national government and in Metro Manila.

In October 2008, I went to Gummersbach, Germany, to attend the international seminar on “Local Government and Civil Society”, sponsored by the Friedrich Naumann Foundation (FNF) at the Theodor Heuss Akademie. One of our readings prior to flying to Germany was a paper by a German political scientist, Dr. Monika Ballin, entitled “Local Government and Civil Society”.

Dr. Ballin made a number of definitions and points that I liked very much. Among these are the following:

One, local government is a local, non-national authority, with local responsibility and limited autonomy and is part of the organizational structure of the State. But local government with a high degree of autonomy is always in strong opposition to centralistic political movements and authoritarian structures.

Two, the principle of subsidiarity applies. Responsibilities as much as possible should be done at the lowest level, and only when a responsibility exceeds the capacity of one level that the next higher level should be entrusted.

Three, decentralization and privatization. Responsibilities need to be shifted from the top down, and responsibilities which are not in the national or local sphere have to be privatized. Local authorities must have their own sources of funding to assert their fiscal autonomy.

And Four, civil society is the final stage of a functioning local government. If all means of decentralization, deregulation and privatization have been implemented and citizens have been involved as comprehensively as possible, civil society has emerged. There will be a “Lean State” where State structure exists only where it is absolutely necessary, and the State at any level is not carrying out any task and duty which private businesses or citizens themselves can do for society.

The purpose of political decentralization and devolution is to shift some responsibilities from national to local governments. Unfortunately, for many countries, this did not result in greater individual freedom and citizen empowerment and self-administration, but greater power, regulation and intervention by local governments.

Most LGUs got drunk with the new regulatory powers vested on them by decentralization policy. Thus, while various national government agencies have already imposed a number of taxes and fees for businesses and ordinary citizens, LGUs also created and imposed their own new set of taxes and fees. The main reason given by LGU leaders why they did so is because they also assumed more responsibilities and expenditures that used to be funded by the national government.

What was overlooked by many LGU leaders and their supporters in the intelligentsia, is that the smallest unit to assume responsibility for the citizens is not the barangay or village, a political unit and is part of the entire State apparatus. Rather, it is the individual, the households, as well as their voluntary organizations – like neighborhood associations, sports clubs, civic and rotary clubs, student organizations, labor unions, and so on.

Thus, if the principle of subsidiarity is to be applied strictly, then most responsibilities should fall on private individuals, parents, firms, and citizens’ voluntary organizations, not on either national government or LGUs. This is part of a transition from decentralization to privatization. And by privatization I do not mean the transfer of function from a government unit to a private corporation only. Not exactly. It can be an NGO, a cooperative, a sports and civic club, a church organization, and so on.

There are certain functions that are better handled by the national government, and not by LGUs or by individuals and their voluntary organizations. This includes the promulgation of the rule of law. A law against killing applies whether the crime happened in Luzon or Visayas or Mindanao. The heavy hands of the State should run after criminals, murderers, rapists and kidnappers. Another law, the law against stealing. It should apply whether the theft is the President or a Governor or the poorest of the poor.

Most social welfare functions for special cases are better handled by LGUs. Like public education for the very poor and those with physical and mental disabilities, especially if the parents are poor.

But the bigger challenge to raise responsible individuals who understand their rights and responsibilities as citizens of a particular society, rests with the parents and guardians of minors, the private individuals, not government. We may call this as “privatization of citizen responsibility.”


(2) Civil Society and Politics

A state of civil society is supposed to be higher than a state of democratic governance. And yet we see majority of civil society organizations (CSOs) and non-government organizations (NGOs) that work and behave like adjunct of the government (local, national and multilateral) and political parties. Why has this happened?

Before exploring that question, let us define what “civil society” is. I am taking the liberal, German liberal specifically, definition of the concept, which is rather radical

A German liberal intellectual has defined it as:

“Civil society is the final stage of a functioning local government. If all means of decentralization, deregulation and privatization have been implemented and citizens have been involved as comprehensively as possible, civil society has emerged. There will be a “Lean State” where State structure exists only where it is absolutely necessary, and the State at any level is not carrying out any task and duty which private businesses or citizens themselves can do for society.”

There you are. A state of civil society is a state where individuals know their rights, freedom and responsibilities, as well as the freedom and responsibilities of other people. In so doing, they assume as much responsibilities as possible in managing their own lives, their households, their communities, their school and offices, their church and other voluntary organizations. It is a state of minimal government, both national and local.

See my longer discussion of this as well as the original paper by Dr. Monika Ballin, “From local government to civil society”, http://www.minimalgovernment.net/media/mg_20080821.pdf

A close concept of civil society is the principle of subsidiarity. This principle states that “Responsibilities as much as possible should be done at the lowest level, and only when a responsibility exceeds the capacity of one level that the next higher level should be entrusted.”

Now the lowest level of social, political and economic unit in any society is not the village or barangay. It is the individual. Thus, things that are better done by the individuals, their households, their villages, their sports, church and civic organizations, should be left with them. Only when certain functions they cannot deal with, say neutralizing an organized and armed gang of robbers, drug pushers, carnappers, killers and other criminals, then they pass that function to local government (barangay, city/municipality, or province). When the local governments cannot handle certain functions, then the national government should take over.

An example of functions that cannot be handled efficiently by individuals and their voluntary organization, and the local governments, is maintaining an air force and navy to neutralize sophisticated, highly organized and well-armed criminal groups like sea bandits that sea-jack passenger and cargo boats.

So now, why did I say that so many CSOs behave and act like adjunct of the government and political parties? Because instead of asserting individual freedom and responsibility, instead of correcting repeated government failures, such groups push for even bigger government responsibility, intervention and regulations.

An outstanding example is the party-list system in the Philippines. The Constitution provided for the participation of “marginalized sectors” in the House of Representatives by allotting up to 20 percent of all seats in the House, to be occupied by party-list Congressmen/women. This provision shows that the Constitution itself doubts the sincerity of the legislative district-based Congressmen/women that they will indeed protect the interests of the “marginalized sectors”. Thus, these party-list House seats need to have their representatives there too.

Distrust begets distrust. In the coming May 2010 elections, 300+ party-list groups applied, saying they are from the marginalized sectors. Wow, so many marginalized groups! Does it mean that all past legislations including budgetary appropriation by both district-based and party-list Congressmen/women were all failures in reducing the number of “marginalized sectors”?

Out of the 300+, the Commission on Elections (COMELEC) authorized 187. Repeat, 187 party-list groups and voters will choose only 1.

My point here is that all those party-list groups are CSOs, one way or another. Instead of pressuring existing political parties and party-lists why things remain foul, they all joined the political complexity.

Include also so many CSOs that whenever certain social problems arise, their standard proposal is “more government regulation”, or “more government subsidy”, or “more taxes from the rich”, or “create a new department/bureau”, and so on. And there is the implicit pressure that they hope that the leaders of CSOs will be appointed as heads of those new offices or be appointed to replace other officials.

What happens now to advancing the principle of subsidiarity, of individual freedom and responsibility? Nothing. We are all hooked to supporting the least corrupt politicians among candidates whom average voters suspect were engaged in some dirty arrangements as past government officials.

CSOs should go back to their roots. Their leaders are not politicians, they are not part of political parties, they are not representatives of the corporate world. They are voluntary organizations that thrive only on voluntary support by members and private donors.
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See also:  Decentralization 4: Local Taxes and Provincial Airports, May 30, 2009