Federalism and decentralization in the Philippines: impacts on public expenditures

Date

6-2019

Degree

Bachelor of Science in Economics

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Anna Floresca F. Firmalino

Committee Member

Agham C. Cuevas, Isabelita M. Pabuayon

Abstract

This study attempts to examine the potential effects of a shift to federalism on public expenditure, specifically social and infrastructure expenditures. In line with the Second- Generation Theory of Decentralization, local government officials are treated as non- benevolent beings in need of incentives to pursue the betterment of their local jurisdictions and decentralization is treated as the process of giving fiscal incentives, or tax base, and political incentives, or decision-making powers, to local government officials. The previous decentralization initiative in the Philippines, or the Local Government Code of 1991, increased both fiscal and political incentives, as well as the cash transfers from the national government. Once a federal shift occurs, all the mentioned factors will increase further. After conducting a set of regression analyses, it was found that both fiscal and political incentives were significant in increasing real per capita social spending of the local government units. Whereas for real per capita infrastructure spending, while both incentives were found significant, only fiscal incentives were assessed to be a stimulator. Additionally, cash transfers were found to be a significant motivator for both social and infrastructure spending. Once a federal shift occurs, as demonstrated by the regression results, social and infrastructure expenditures are expected to be significantly driven by the potential changes in the levels of incentives and transfers.

Language

English

LC Subject

Government spending policy

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993.5 2019 E2 P86

Notes

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Document Type

Thesis

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