Decentralization, Federalism, Governance, and Development

 

SME AND ENTREPRENEURSHIP: CHALLENGES, ENABLERS, AND POLICY WORKFORCE DEVELOPMENT, EDUCATION REFORMS, DEMOGRAPHIC CHANGE, AND THE FOURTH INDUSTRIAL REVOLUTION  DECENTRALIZATION, FEDERALISM, GOVERNANCE, AND DEVELOPMENT

Decentralization, Federalism, Governance, and Development

Governance reforms are important to the country’s growth and development. With high inequality across regions, many are clamoring to decentralize power to better address the needs and preferences of people residing far from the seat of power. Decentralization, however, is not a panacea as studies have shown. While local governments may have information advantage on the preferences and needs of the local population, the national government usually have better access to resources, economies of scale, and has better governance. This calls for the right balance on what functions should be decentralized and what form of decentralization should be used.

Even before federalism and decentralization became buzzwords in local politics, decentralization has been an important component of public finance reforms and development strategies of many low- and middle-income countries. The Philippines implemented its strongest decentralization program through the 1991 Local Government Code; and almost thirty years later, the evidence is still mixed on its effectiveness. For instance, one common criticism of the current government setup is that local governments are too dependent on the national government for their budget. In addition, the quality of governance in lowest-income municipalities leaves much to be desired. Any further decentralization programs should avoid these pitfalls.

The Center is involved in conducting studies and hosting events that promote better understanding of decentralization and other governance processes. These include studying how decentralization and governance can contribute to human welfare, inclusive growth, and economic development. The Center also holds events such as conferences, roundtable discussions, policy workshops, and discussion forums wherein policy makers, practitioners, and academics exchange views and inputs on this timely topic.