Local Public Finance in the Philippines: Lessons in Autonomy and Accountability

Abstract

Fifteen years into the implementation of the Local Government Code of 1991, now is an opportune time to assess how this landmark legislation has contributed to (or detracted from) the achievement of local autonomy with accountability. The literature on fiscal decentralization suggests that these two goals are not incompatible. In fact, real autonomy (in the sense of local governments being able to link their spending decisions with their revenue/tax decisions) promotes fiscal responsibility. Consequently, local constituents are more vigilant in enforcing the accountability of local officials because the connection between the amount of local services they receive and the amount of local taxes they pay at the margin is clear to them.

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