Lesson 7: The Exercise of Administrative Decentralization

By Aborde, Andallon, Bermejo, Geraldino, and Torreflores

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A. Survey of Literature on Philippine Decentralization

1. The Current State of Philippine LGUs
2. Philippine Decentralization: A Historical Perspective/Evolution of Govt, Voters and
Politicians
3. Evidence on Philippine LGU Performance

B. Inter-local Cooperation as Alternative Service Delivery Mechanism

1. Basic Concepts and Definitions of Inter-local Cooperation
2. Applicability of Inter-local Cooperation
3. Types of Inter-local Cooperation Agreement
4. Rationale/Conditions for Inter-local Cooperation
5. Challenges Affecting Inter-local Cooperation

C. Devolution and Capacity-Building in Local Policy Making

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Case: Mangune et al., vs. Executive Secretary Ermita, et al.- G.R. No. 182604,
September 27, 2016
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Survey of Literature on Philippine Decentralization

I. The Current State of Philippine LGUs
A. The Local Government Code (LGC) of 1991 solidified the Philippine
government’s commitment to decentralization by creating local government units
(LGUs) that would help attain national goals by providing “a more responsive
and accountable local government structure instituted through a system of
decentralization whereby local government units shall be given more powers,
authority, responsibilities and resources” (LGC 1991, Sec. 2a). —> The LGC
changed the landscape of local fiscal decision-making by giving local
government officials increased expenditure responsibilities and resources,
via increased revenue-raising authority and the intergovernmental fiscal
transfer called the Internal Revenue Allotment (IRA)
B. The main justification for decentralization is that economic efficiency can be
enhanced with “each public service being provided by the jurisdiction having
control over the minimum geographic area that would internalize the benefits
and costs” (Oates 1972).
● Revenue raising and expenditure responsibilities—> delegated to
levels of government closest to voters, since these local officials are
presumed to know the preferences of their constituents—> better
position to decide on local policy compared to the national government
implying with decentralization, local fiscal decisions should reflect
voter preferences.
II. Fiscal State of Philippine Local Governments
A. General Fiscal State of the Phillipines—> Low Revenue Effort
1. With the aim of creating self-reliant LGUs, the LGC mandated that:
“each local government unit shall exercise the power to create its own
source of revenue and levy taxes, fees, and charges . . . Such taxes,
fees, and charges shall accrue exclusively to the LGUs” (LGC 1991,
Secs. 2 and 129).
2. At the same time, with policymakers recognizing the additional fiscal
burden of devolved functions on LGUs and to help LGUs execute their
functions, “the 1991 LGC made the previously discretionary
intergovernmental fiscal grant (called the Internal Revenue Allotment
or IRA), mandatory” (Diokno 2012). The IRA is the LGU’s “share of
national internal revenue taxes based on the collection of the third
fiscal year . . .” (LGC 1991, Sec. 284) which is unconditional except for
the requirement that 20% be allocated for development purposes
(LGC 1991, Secs. 284 and 287).
B. Revenues and IRA are the two main sources of income of LGUs.
1. Revenues from local sources are divided into two main categories:
a) tax revenue including real property, business, and other taxes;
and,
b) non-tax revenue such as regulatory fees, user charges,
receipts from economic enterprise, tool fees and other receipts
2. External sources of local government income include the IRA, shares
from national tax collections, national wealth, tobacco excise tax;
loans and borrowings; extraordinary receipts/grants/aids, and
inter-local transfers.
a) The largest income source of LGUs is external, averaging
68.5% from 2009 to 2016 (Figure 2.3), with the IRA being the
biggest contributor.
b) Of the local sources, business tax was the largest contributor
averaging 10.7% while real property tax came in a close
second with an average of 9.4% (Figure 2.4).
C. Functions of LGU
1. Of these sectors, policymakers and researchers focus on social and
economic services that are viewed as investments in both human and
physical capital needed to attain economic growth and development
(Mankiw 2010). Social services are mostly private goods and services,
i.e. goods and services that are rival in consumption and excludable
(Stiglitz and Rosengard 2015).
D. Percent distribution of Philippine local government expenditures, Province,
Cities, and Municipalities (2009-2016)
1. Social services received the third largest share of total LGU
expenditures, averaging 21%/percent.
a) Of these, health, nutrition, and population control expenditures
have the largest share of local government spending,
averaging about 10 percent.
b) Of the social services, social welfare expenditures received the
second largest share averaging 4.7 percent.
 c) Under social services, education spending received the third
largest share, with an annual average of 4.5 %/percent of total
local government expenditures. But unlike health services,
although the Department of Education school building program
was devolved to local governments, basic education services
(i.e. elementary and secondary levels) are still provided by the
national government.
2. There is, however, an earmarked fund of the LGU called the Special
Education Fund (SEF) which allows, “(A) province or city or a
municipality within the Metropolitan Manila area may levy and collect
an annual tax of 1% on the assessed value of real property tax “ The
proceeds of the SEF must be released automatically to the local
school board and can be used for the operation and maintenance of
public schools; construction and repair of school buildings, facilities
and equipment; educational research; purchase of books and
periodicals; and, sports development (LGC 1991, Sec. 272).

III. Philippine Decentralization: A Historical Perspective/Evolution of

Government, Voters and Politicians
A. For more than four centuries the Philippine government was highly
centralized resulting in local governments heavily dependent on the national
government for fiscal resources.
B. Despite sporadic efforts at decentralization for most of this period, local
leaders were appointed by the central government leaving Philippine voters
with limited, if any, roles in choosing their own leaders.
C. It was only during the American colonial regime that local elective positions
were accessible to Filipinos, however, due to stringent voter qualifications,
only the educated and wealthy elite were eligible to run and exercise their
right to suffrage (de Dios 2007).
D. These elements of our history might explain, in part, why LGUs are still
heavily dependent on the national government for transfers and how the
development of politicians from wealthy elites, and not from political
ideologies, cultivated a weak state that allowed the breeding and
entrenchment of political dynasties through patronage and coercion
(Hutchcroft 1998; Rocamora 1995; Coronel 2004; Rivera 2011).
E. The Institutional Framework: The Philippine local government
Period in the Philippine Local Salient Points in the Period
Government Unit

pre-Spanish colonial regime ● The first LGU is the barangay, led by the datu which had
executive, legislative, judicial, and religious powers, and was
advised by a group of elders, and the transfer of power was
primarily familial (De Guzman, Reforma and Panganiban
1998).

Spanish colonial regime ● The government was highly centralized to facilitate

(1565-1898) colonization (Corpuz 1997).
● The datus and their families were allowed to maintain their
right to govern and were given recognition as a ruling class
 called the principalia.

Revolutionary Government ● Several efforts toward strengthening local governments in

(1898 1899/1900) the Malolos Constitution of 1899 but in 1890, the success of
American colonization, cut short all efforts to establish an
independent Philippine nation.

the American colonial regime ● The establishment of municipal and provincial governments
and Philippine Commonwealth and delegation of as much responsibilities and duties to the
(1900-1946) lowest level of government possible. These were not carried
out as local officials lacked experience in directing local
governments.
● One of the major developments in this period is the creation
of a legislated share of internal revenues (The Internal
Revenue Law, Act No. 1189 1904).
● However, the dependency of local governments on the
central government further intensified with the introduction of
intergovernmental transfers towards the end of American
colonization (Corpuz 1997).
● During the Philippine Commonwealth, the 1935 Constitution
provided that “the President shall exercise general
supervision over all local governments as may be provided
by law….” (Philippine Constitution, 1935: Art. VII, Sec. 10).
As a result, government was centrally controlled under Pres.
Manuel L. Quezon, who believed that under the unitary
system, the national chief executive should control all local
offices (De Guzman, Reforma, and Panganiban 1998).

the Third (1946-1972) and ● The trend was towards decentralization, as local
Fourth (1973-1985) governments received revenue-raising authority and
narrowed the application of the constitutional power of the
President to supervise local governments.
● Despite the 1973 Philippine Constitution’s provisions of
giving more power to local governments, actual policy
increased the supervision and regulation by the national
government.
● During Martial Law (1972-1982), Pres. Ferdinand E. Marcos
maintained the power to create, divide, merge, abolish, and
alter the boundaries of LGUs. He also suspended local
elections, allowing him to remove and appoint local officials.
Until the fall of the Marcos regime, internal revenue shares
were still the main source of local government income. In
addition, their release was discretionary, based largely on the
political affiliations of local officials with the Marcos
administration (Diokno 2012).

Fifth Republic (1986 to present) ● True commitment towards a decentralized government

emerged with the passing of the 1991 Local Government
Code of the Philippines (LGC). The discretionary power of
the national government on intergovernmental fiscal transfers
was eliminated by making IRA releases automatic and
mandatory.
● LGUs maintained their dependence on the IRA, which is now
perceived to be a source of regular and increased patronage
 for local chief executives (Hutchcroft, 2012).

IV. The Philippine Voter

A. It was only during the American colonial regime that Filipinos could vote for
their leaders. Before the first direct elections for provincial governors in 1906,
“municipal presidents (equivalent to mayors), vice-presidents and councils
were effectively chosen by and from the principalia owing to stringent voter
qualifications7 (de Dios 2007, 161).” In hindsight, granting suffrage and
access to elective positions to a limited and elite population gave them the
advantage to entrench and enrich themselves in the political and economic
arena.
B. Non-elite or indigenous Filipino voters played a minimal role in affecting local
governance. During the periods that local politicians were:
1. (1) appointed (i.e., the Spanish regime, Philippine Commonwealth,
during Martial Law); or,
2. (2) elected and limited to the elite (i.e., the American colonial regime
beginning informally in 1901), there was, at best, limited participation
by elite voters.
a) The non-principalia or non-elite Filipino were not allowed to
vote, and it was only during the Third and Fifth Republics that
all Filipinos were given the right to vote for local public officials.
C. In the Third Republic until before Martial Law (1946-1972), the local chief
executive and members of the local legislative bodies were directly elected by
the people. During Martial Law (1972-1982), Pres. Marcos suspended local
elections, allowing him to remove and appoint local officials (De Guzman,
Reforma, and Panganiban 1998). In 1980, he restored the direct election of
governors and mayors with a fixed term of office. After Martial Law ended on
17 January 1981, there was an election of barangay officials on 17 May 1982
(Batas Pambansa Blg. 222, 1982).
D. The dissatisfaction of the Filipinos with the Marcos dictatorship, the
assassination of a popular exiled opposition senator Benigno Aquino Jr., and
the blatant cheating of the administration in the 1985 Snap Elections led to
public outrage that culminated with the overthrow of Pres. Marcos. In 1986,
the peaceful civilian uprising called People Power was quickly succeeded by
the Fifth Republic (1986-present) with the first local election of the Fifth
Republic being held on 18 January 1988 (Commission on Elections).
E. The lack of experience in the voting of the general Filipino population may
have perhaps manifested in voting for candidates based on personal
affiliations developed outside of the political arena, e.g. because of patronage
or coercion. In a study on voter behavior from 1946-1963, there was evidence
that voters did not vote based on political party affiliations, primarily because
the political parties then were “based on loose confederations and unstable
localized pyramids of leadership” (Lande 1973, 95). According to Lande
(1973) what played a larger role in mobilizing voters were personal alliances
between candidates and local political leaders or individual voters.
V. The Philippine Politician
A. The first Philippine politician originated from Pre-Spanish era as the
governing datu of a barangay whose power was transferred through familial
ties (Sidel 1999).
B. During the Spanish regime, barangays were renamed as barrios while the
datus were kept as the head of this smallest government unit. The datus took
on the role of tax collectors and were called the cabeza de barangay, while
other officials were selected by the colonial government with no participation
of local inhabitants (De Guzman, Reforma, and Panganiban 1998).
C. During the Revolutionary government of 1898, the Malolos Constitution of
1899 institutionalized direct elections. However, during the American colonial
regime, the centralized structure of government during the Spanish period left
the locals unable to govern effectively, despite efforts of the Philippine
Commission (De Guzman, Reforma and Panganiban 1998; Manor 1999).
D. As discussed earlier, local chief executives and members of local legislative
bodies were directly elected by the people in the Third Republic but upon the
declaration of Martial Law in 1972, Pres. Ferdinand Marcos suspended local
elections, allowing him to appoint and remove local officials (De Guzman,
Reforma, and Panganiban 1998). In 1980, he restored the direct election of
governors and mayors and after Martial Law was lifted, allowed an election of
barangay officials on 17 May 1982 (Batas Pambansa Blg. 222, 1982). The
Fifth Republic was constituted in 1986 after overthrowing the Marcos
dictatorship and the first local election was held on 18 January 1988
(Commission on Elections).
E. A predominant element in the history of Philippine politics is that power was
maintained and passed on through familial ties. Local politicians developed
from datus, into the principalia, and then into the elite group of voters during
the American years, who later thrust themselves into the national arena. As
de Dios (2007, 161) states, “[T]he fact that the United States was bound to
grant the Philippines self-rule and ultimately independence allowed what were
formerly intermediary strata and local-level elites to assume national
significance.”
F. Concurrent to the development of elite politicians was the absence of the
progression of a strong political party system. The weakness of the political
party system in the Philippines can be traced to:
1. lack of competition among local officials during the Spanish times;
2. one dominant party ruling among multiple parties during the American
colonial period;
3. the competitive two-party system during the Third Republic (which
according to some was not a true two-party system because the
platforms were the same (Lande 1973) and these parties were only
rival coalitions of families and clans);
4. no political parties during Martial Law;
5. the dominant party rule of Pres. Marcos’ Kilusang Bagong Lipunan
(KBL); and finally,
6. the current multiple-party rule (Manacsa 1999).
G. The weak political party system allowed the formation of political clans from
these landed elite, wherein familial interests rule instead of ideologies.
Coronel (2004) identified strategies to maintain familial power such as:
1. (1) wealth accumulation;
2. (2) violence;
3. (3) expansion of political influence through strategic marriages;
4. (4) diversification of economic interests;
5. (5) alliances with national politicians; and, (6) patronage.
H. As mentioned earlier, there was evidence that when Filipinos elected local
officials during the Third Republic, voting was based on personal alliances
and not political party affiliations (Lande 1973). These personal affiliations
were believed to have been established through patron-client or patronage
relationships wherein the client (voter) relies on the patron (landowner) who
possesses the economic resources for livelihood, protection, and security
(Sidel 1999).
I. “At the turn of the twentieth century, the landholding class became the local
economic elites that were able to graduate into the role of local and then
national political leaders” (de Dios 2007, 167). Similarly, Crouch (1985)
asserted that the dominant landowning class in the pre-Marcos era developed
into a new class of political elite that later became the commercial and
industrial elite.
J. Lande (1973) finds evidence that tenancy, which is linked to landowning, is
weakly related to political factors when examining the voting behavior of the
Southern Tagalog region from 1946 to 1968. There was evidence, however,
that the Nacionalista party was susceptible to political control by the
landowning elite though the existence of tenancy does not translate into
political strength. In 2004, almost 40% of the members of the 12th Congress
of the Philippines were agricultural landowners (Coronel 2004).
K. Hutchcroft (1998) and Rocamora (1995) argue that the national elite or
oligarchy was developed under the conscious effort of the American colonial
regime. Suffrage was granted only to the propertied and educated Filipinos
which led to political offices being held by landowning families (Coronel 2004).
Weak political institutions made it easy for the educated and wealthy take
advantage of the state and holding political office allowed these families to
expand their wealth and entrench themselves (Huthcroft 1999).
L. Specifically, the political sphere began with municipal-level elections which led
to coalitions among the municipal elite for provincial elections which then
boosted them to the national political arena. The local landowning elite or the
local oligarchs who were the local political elite became the national political
elite, encouraging local politicians to aspire for national offices (de Dios 2007).
M. The inadequacy of the political party system, the national elite became
dependent on the local elite for voter mobilization (Lande, 1973;
Manacsa,1999).
VI. Evidence on Philippine LGU Performance
- The following answers why the LGUs in the Philippines are at a varied level of
development.
A. Fiscal Explanations
- The financial performance of Local Government Units (LGUs) in the
Philippines varies significantly. Researchers point to four main
reasons:

- First, socioeconomic differences, such as poverty levels, education,

and infrastructure, impact LGUs' financial capabilities. Second,
limitations in the Local Government Code (LGC) hinder their
effectiveness. Third, the Internal Revenue Allotment (IRA) system can
discourage LGUs from generating their own revenue. Fourth, LGUs
are often assigned responsibilities that don't match their resources.

1. Socioeconomic Conditions
-It has been argued that different LGU development can be attributed, in part,
to varied revenue-raising capacities of LGUs and the IRA formula not
considering equity (does not include any revenue raising effort variable of
LGUs).
-Still on revenue mobilization, Llanto (2009) argues that inefficient tax
assignment has constrained local revenue mobilization and led to the
dependency of LGUs on IRA.
2. Dependency on IRA
-Many studies on Philippine decentralization have highlighted the high and
persistent dependency of LGUs on the IRA (Diokno 2012, Manasan 2009,
Llanto 2009).
-Manasan (2004) found empirical evidence that suggested “LGUs which
received higher IRA tended to be lax in their tax effort” (Manasan 2004, 39).
3. Mismatch in expenditure responsibilities
-Manasan and Chaterjee (2003) argue that there is a mismatch in expenditure
responsibilities devolved to different levels of LGUs
-Others have also argued that despite the mandated spending of 20% of LGU
annual IRA on development projects called the local development fund (LDF),
the amount is spent for programs and projects that do not contribute to
economic development.
-The Commission on Audit reported that in 2016, approximately 2.3 % of the
LDF funds were used for purposes other than intended.

B. Political science and political economy explanations

There have been some efforts in Philippine literature to examine the effect of political
dynasties on local development outcomes and spending patterns.
Political Dynasties
- It was found that political dynasties had an initial negative effect for the period
of 1988-1997, but that for a longer time period, 1988-2003, there was no
significant effect.
- More recently, Mendoza et.al. (2016) found that political dynasties in Luzon
neither exacerbate nor reduce poverty but they do exert a significant and
 positive influence on poverty in the Visayas and Mindanao regions. That is,
for the Visayas and Mindanao regions, the evidence suggests that there is a
positive association between political dynasties and poverty incidence. The
authors argue that there is an interrelationship between geography and
institutions in the determination of socioeconomic outcomes such as poverty.
- In terms of voter turnout, Cruz, Labonne and Querubin (2017) found that for
the Philippines, candidates for public office are disproportionately drawn from
more central (in terms of accessibility of voters to the political dynasty
candidate member) families and family network centrality contributes to
higher vote shares during the elections.
- As for political dynasties and specific sectors, Labonne, Parsa and Querubin
(2017) show that in the Philippines, binding term limits constitute critical
junctures in which dynastic women are 240% more likely to access political
office.
- For studies on political dynasties and expenditures, Capuno, Fabella and
Solon (2009) found that incumbent governors increased their chances of
re-election with higher spending on economic services. In addition, they found
that governors who are members of political clans have higher economic
service spending when faced with rival clans.
- Still on political dynasties and public expenditures, Diokno-Sicat (2016) found
that there is a difference in LGU spending priorities of an incumbent official
who is facing his last term in office, or a lame-duck, depending on his or her
membership in a political dynasty.
- last-termer incumbent officials who were members of political families spent
more on social services and less on economic services while non-political
dynasty last-term incumbents spent more on general public and economic
services and less on social services.

Clientelism
- For the Philippines, Khemani (2011) provided evidence that a direct measure
of clientelist political strategy (i.e. vote-buying) was significantly,
systematically and robustly related to both the lower quality and availability of
public health services. Khemani (2011) argues that by “doing so (providing
evidence) adds to the knowledge base of why and how politics matters for
good governance—for effectively translating public spending into
development outcomes—and what this implies for public policies to improve
the quality of governance” (Khemani 2011, 2-3).
- Local public choice theory has tried to explain the difference in the provision
of public goods across localities by voters ‘voting-with-the-feet,’ or, moving to
places where goods and services provided by the local government reflect
their preferences (Tiebout 1956). This assumes, however, that incumbent
politicians are responsive to voter preferences.
- A more general public choice theory that assumes such is the median voter
model which suggests that with a majority voting rule, for a candidate to win
an election, he or she must satisfy the preferences of the median voter
(Stiglitz and Rosengard 2015). This would result in goods and services
provided by the government reflecting median voter preferences.
 C. International explanations of varied levels of development with decentralization
- There is a strong association between the level of fiscal decentralization and
the level of development, with larger countries tending to decentralize more
quickly (Bahl and Bird 2018). It has not yet been ascertained whether
decentralization leads to faster economic growth or if faster economic growth
leads to more demand for decentralization. “Nor do we know if fiscal
decentralization, at the margin, leads to faster economic growth” (Bahl and
Bird 2018, 65).
- social protection spending appears to increase income inequality in Asia,
whereas it reduces it in the rest of the world.
- Also, adversely affecting the distribution of income in Asia is government
expenditure on housing. The authors offered that social protection programs
in Asian economies are more of policy rather than programs. The significance
by which expenditures affect income redistribution might be suggestive of the
impact as well at the local level of government spending
- Mookherjee (2015) surveys the literature on political decentralization and
discusses much micro-evidence on intra-community elite capture and
corruption. Capture is when there is a lack of involvement of poor and
marginalized groups in decision-making and project outcomes are less
aligned with their needs. The capacity of elites to hijack programs to suit their
ends, or of officials to pocket rents or divert sources is higher in communities
with greater inequality, are remote from centers of power, have low literacy
rate, are poor, or with significant caste, race or gender disparities.
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Inter-local Cooperation as an Alternative Service Delivery Mechanism

Basic Concepts and Definitions of Inter-local Cooperation

- Inter-local Cooperation is commonly defined as an arrangement which
“involves voluntary transactions between two or more local governments to
accomplish common goals.”
- Similar terms:
Inter-local agreements
Inter-governmental cooperation
Inter-local government unit alliance
institutional collective action or ICA

Due to the prevalence of Inter-local service agreement (ILA) as the most

common form of cooperation, LeRoux and Carr (2005) suggest that
“inter-local cooperation should be construed as a reference to inter-local
agreements
- Inter-governmental cooperation- an arrangement between two or more
governments for accomplishing goals, providing a service or solving a mutual
problem. “ (The james A. Coon Local Government Technical Series)
- Inter-LGU alliance- a voluntary collaborative undertaking among LGUs to
address specific common concerns that require the efficient consolidation of
 resources, the harmonization of policies and actions, and an inter-sectoral
and comprehensive approach (GTZ)
- ICA (Institutional Collective Action)- the glue holding an institutionally
fragmented community together.
- The four of the six criteria to describe collaborative governance are also
applicable to inter-local cooperation

● participants engage directly in decision-making and not merely

“consulted”
● The forum is formally organized and meets collectively
● The forum aims to make decisions by consensus
● The focus on collaboration is on policy or public management

Legal Basis
Inter-local cooperation among local government units (LGUs) in the Philippines is legally
supported by key legislative provisions. The first is Section 13, Article X of the 1987
Philippine Constitution, which states that 'Local government units may group themselves,
consolidate or coordinate their efforts, services, and resources for purposes commonly
beneficial to them in accordance with law.'

Additionally, Section 33 of the 1991 Local Government Code (RA 7160) reinforces this by
allowing LGUs, through appropriate ordinances, to 'group themselves, consolidate, or
coordinate their efforts, services, and resources for purposes commonly beneficial to them.’

In the Philippines, various laws promote and facilitate inter-local cooperation among local
government units to enhance shared governance and resource management

● The Philippine Fisheries Code: This law emphasizes the sustainable use and
cooperative management of fisheries and aquatic resources.
● The National Integrated Protected Areas System (NIPAS) Act: It promotes the
joint administration and protection of protected areas, encouraging collaboration
among local governments.
● The Ecological Solid Waste Management Act: This act fosters cooperation in the
management and reduction of solid waste through shared initiatives.
● Executive Order 205 (series of 2000): Establishes Inter-Local Health Zones to
improve healthcare delivery through inter-municipal collaboration.
● The Urban Development and Housing Act: Supports cooperative planning and
action to provide adequate shelter and urban development services.

Formation of Interlocal Cooperation

The formation of Inter-Local Cooperation involves three key elements that need to align:
purpose, structures and systems, and resources.

The institutional, financial, and legal aspects act as the foundation for achieving this
cooperation. These factors enable LGUs to establish common goals, build robust systems
for collaboration, and mobilize resources efficiently. According to the Philippine Development
Forum (2010), considering these elements harmoniously is vital for sustainable and effective
inter-local cooperation.

To establish a strong foundation for inter-local cooperation, we must consider the following
institutional aspects:
Common Base:
● Shared understanding and objectives
● Active involvement of local leadership
● A dedicated structure for coordination and decision-making
Strategic Planning:
● Developing a comprehensive plan that aligns with the needs and priorities of the
community
Capacity Building:
● Equipping LGU personnel with the necessary skills and knowledge to implement
projects effectively

A solid legal framework is essential for inter-local cooperation. Key legal considerations
include:

Binding Legal Instrument:

● A formal agreement, such as a Memorandum of Agreement (MOA), that outlines the
terms and conditions of the partnership
Mandatory Review:
● Regular review of the MOA to ensure its continued relevance and effectiveness
Harmonization of Policies:
● Aligning local ordinances and regulations to promote consistency and efficiency
Dispute Resolution Mechanisms:
● Establishing procedures for resolving conflicts and disagreements among partner
LGUs

Financial sustainability is crucial for the long-term success of inter-local cooperation. Key
financial considerations include:

Shared Financing:
● A fair and equitable distribution of financial responsibilities among partner LGUs
Resource Mobilization:
● Exploring various funding sources, such as government grants, private sector
partnerships, and international aid
Efficient Financial Management:
● Implementing sound financial practices and transparent accountability mechanisms

Applicability of Inter-local Cooperation

By working together, local governments can leverage their resources, expertise, and
economies of scale to address shared challenges and improve the quality of life for their
constituents.
Inter-local cooperation is a collaborative approach where two or more local government units
(LGUs) work together to achieve common goals.This can involve sharing resources,
personnel, or services, or forming joint ventures and partnerships.

Why Inter-local Cooperation?

● Inter-local cooperation offers several advantages, including:
● Cost-effectiveness: By sharing resources and infrastructure, LGUs can reduce costs
and avoid duplication of efforts.
● Improved service delivery: Joint efforts can lead to more efficient and effective
service delivery.
● Enhanced capacity: By pooling resources and expertise, LGUs can enhance their
capacity to address complex challenges.
● Greater political influence: Together, LGUs can have a stronger voice and influence
on regional and national policies.

This topic outlines the general rule for when inter-local cooperation is most effective: it's
ideal for public goods and services that require significant upfront investments and
benefit from economies of scale.

General Rule:
“Public goods and services that exhibit high capital cost especially when carried out by
individual local governments, or economies of scale where the unit cost of provision
decreases as the volume increases, are the common candidates for inter-local cooperation.”

or

General Rule: Inter-local cooperation is most suitable for public goods and services
that:

● Have high capital costs, making them difficult for individual local governments to
undertake.
● Exhibit economies of scale, meaning the unit cost of provision decreases as the
volume increases.

Areas where inter-local cooperation can be beneficial in the context of public services and
infrastructure development:

1. Infrastructure Development and Maintenance

● High Capital Projects: Large-scale projects like highways, major roads, affordable
housing, and water distribution systems are often too expensive for individual
municipalities to undertake. Sharing costs and resources through inter-local
cooperation can make these projects feasible.
● Moderate Capital Projects: Investments in amenities like recreation centers, libraries,
and sports facilities can be more affordable when shared among multiple localities.
2. Labor-Intensive Services for Dense Populations

● Public Safety: Sharing resources, training facilities, and equipment for police, fire,
and emergency medical services can be cost-effective in densely populated areas.
● Health and Human Services: Regional clinics, mental health services, and social
service centers can reduce costs and expand coverage to underserved areas.

3. Non-Capital Intensive Public Goods and Services

● Coordination: Inter-local cooperation can improve coordination in areas like traffic

management, transit planning, environmental protection, and disaster response.

Types of Inter-local Cooperation Agreement

1. Formal Agreements
Characteristics:
● Involve written, legally binding contracts.
● Clearly define obligations, expectations, and responsibilities of the cooperating
parties.
● Foster accountability and reduce ambiguities in the partnership.

Example: A formal agreement might be used to create a regional transit authority, where
multiple municipalities agree to pool resources and coordinate transportation services.

2. Informal Agreements
Characteristics:
● Relies on verbal agreements, implicit understandings, and handshake deals.
● Not bound by formal contracts.
● Rely on shared responsibilities and trust to achieve common goals.

Example: An informal agreement might be used to coordinate emergency response efforts

between neighboring towns, where they agree to share resources and personnel during
disasters.

Formal agreements offer greater legal protection and accountability, while informal
agreements can be more flexible and easier to establish.

Formalized Cooperation
This category of inter-local cooperation involves written, legally binding agreements
between local governments. These agreements outline specific terms, conditions, and
responsibilities for each participating entity.

Subcategories of Formalized Cooperation:

Payment-for-Service Agreements:
● One local government provides a specific service to another.
● The service provider receives a fee from the recipient government.
 ● This arrangement is common for specialized services that one government might not
have the capacity to provide in-house.

Joint (Service) Agreements:

● Multiple local governments collaborate on a specific service.
● They jointly plan, finance, and implement the service delivery.
● This approach is often used for large-scale projects or services that benefit multiple
communities.

Service Exchange Agreements:

● Local governments agree to provide services to each other at their own cost.
● This arrangement is beneficial when governments have complementary strengths or
resources.
● For example, one government might have expertise in public transportation, while
another might excel in environmental protection.

Formalized cooperation offers a structured approach to inter-local collaboration. It provides

legal clarity and accountability for all participating parties. The choice of agreement type
depends on the specific needs and goals of the cooperating governments.

Rationale/Conditions for Inter-local Cooperation

Four Factors that encourage inter-local cooperation according LeRoux and Carr:
1. Economic Factors
- most common rationale for entering into a cooperation.
- Includes: increasing fiscal pressures, need to maintain if not reduce the cost of
services, improve services without raising taxes, and achieve cost efficiency and
savings via economies of scale.
- Advocates of inter-local cooperation state that the increasing number of
population and the latter's rising expectations on the quality of services
necessitate increasing resources to support them, but local governments are
constrained to raise taxes and even face stagnating revenue sources,
prompting them to look for ways to increase the service while maintaining the
cost.
- Public works projects like highways, water, sewage, solid waste management,
among others, are capital intensive goods and services, but at the same time exhibit
economies of scale where the unit cost of production decreases as the volume
increases. Thus, producing these goods and services via inter-local cooperation will
enable the participating local governments to avail of economy and efficiency gains
by spreading or sharing the cost of capital investment as well as cost of maintenance
and operations among the participating LGUs, and avoiding duplication of services.
Transaction Costs
- Of "Negotiating, monitoring and enforcing contract provisions" also form part of
the economic factors that help local governments to decide whether or not to enter
into a cooperation.
- The comparative costs of planning, adapting, and monitoring task completion
under alternative governing structures. The more formal and specific an
agreement, the greater the transaction costs are likely to be.
- If the gains from the cooperation are higher than the level of transaction costs,
then local governments are more likely to enter into a cooperation; otherwise,
they will seek other alternatives of service delivery.

2. Political Factors
- Local governments may enter into a cooperation because they share a common
purpose or political interest, and they believe that by banding together they have a
better chance of acquiring legitimacy for their cause, gaining access to political
leaders and decision- makers, and promoting appropriate or relevant policies within
the cooperation.
- The council-manager type of local government is known to favor inter-local
cooperation as shown by the study by Bartle and Swayze in 1997, indicating that
the presence of city managers influences significantly the creation of
inter-local cooperation.
- City managers or professional administrators may look forward to a long tenure in
government service. Thus, they are motivated to create a track record of being able
to promote minimum service standards and efficiency gains to help boost their
reputation, resulting in upward movement in the career ladder. The ability to promote
the economy and efficiency gains in service delivery "can also advance the individual
interests of local government officials". Elected local officials may become interested
in inter-local cooperation if it will bring them some electoral benefits. Confronted with
the twin pressures of increasing cost of service delivery on the one hand and limited
revenue raising powers on the other, elected local officials may be motivated to enter
into a cost-sharing agreement with neighboring local governments. After all, "saving
money through cooperation can serve as an important credit-claiming opportunity on
which elected officials can stake their reelection bids."

3. Legal Factors.
- Local governments perform functions and responsibilities delegated to them by the
national government as defined by national laws.
- Logically, it follows that the national laws provide the legal framework that guides
local governments in entering into a cooperation, and shape and constrain the nature
and extent of cooperative contractual agreement.
- In the Philippines, Republic Act No. 7160, otherwise known as the Local Government
Code of 1991, allows local governments to enter into cooperative undertakings with
other local governments. Specifically, Section 33 of RA 7160 states that:

Local government units may, through appropriate ordinances, group themselves,

consolidate or coordinate their efforts, sources, and resources for purposes
commonly beneficial to them. In support of such undertakings, local government units
may, upon approval by the sanggunian concerned after public hearing conducted for
the purpose, contribute funds, real estate, equipment, and other kinds of property
and appoint or assign personnel under such terms and conditions as may be agreed
upon by the participating local units through a Memorandum of Agreement.
 4. Social Factors
- Includes: attitudes, perceptions, persuasions, norms and values that actors or
decision-makers of local governments in a cooperation display, manifest or
demonstrate during negotiations, enforcement and monitoring of the agreement.
- Among the social factors, trust and reciprocity stand out as the principal social
factors, which likewise make up the so-called social capital.

Challenges Affecting Inter-local Cooperation

- Some of the challenges that deter the efficient and effective implementation of
inter-local cooperation are associated with "transaction costs related to coordination,
division and defection problems." Transaction costs occur when the conditions of
uncertainty, bounded rationality, information asymmetry and complexity of transaction
exist. The level or extent of transaction costs influences the decision whether or not
to organize an inter-local cooperation.

a. Transaction costs related to coordination problems

- arise for a number of reasons including difficulty in:
1) organizing tasks among partners
2) facilitating the conduct of activities in the cooperation; and
3) meeting expectations for joint gain from the cooperation.

- Due to uncertainty and limited information, actors face high transaction costs in the
coordination activities of the cooperation and in determining if the cooperation will
continue to hold

b. Transaction costs related to the division problem

- occur when any of the actors exhibit an opportunistic behavior, leaving one or some
of them worse off than if they had not cooperated at all.
- A division problem arises when the mutual gains from the cooperation are not
distributed fairly among the members or at least based on the provisions of the
agreement.
- Division problem increases transaction costs and, if not addressed effectively, may
deter and even destroy the cooperation.
- To overcome this problem, the actors in a series of bargaining and negotiations must
define their duties and rights including the terms of distribution of mutual gains and
formalize their agreements and concessions in a contract. Contracts organize the
exchange relationship.

c. Transaction costs related to defection problem

- emerges when one actor's opportunistic decision or behavior makes others worse off,
or affects them negatively.
- This can be overcome only when the rules and norms of behavior among actors are
clearly defined and established through a series of bargaining and negotiation in the
contract.
 - Contracts also control the opportunistic behavior of the contracting agent.
- Inter-govting agent cooperative arrangements are established when the costs of
coordinating the joint venture are minimized and the problems of division and the risk
of defection are reduced. Imperfect information and uncertainty influence the
negotiation, monitoring and enforcement costs.
___________________________________________________________________

Devolution and Capacity-Building in Local Policy Making

Background:
● In 1992, both global and local events encouraged movements toward
decentralization.
○ Globally, the collapse of the USSR, the end of the Cold War, and the
redemocratization of Eastern Europe reduced support for centralized,
state-driven strategies. This shift was bolstered by the Reagan and Thatcher
administrations' push for privatization, promoting market-driven governance
over big government.
○ Locally, the People Power Revolution in the Philippines overthrew the Marcos
dictatorship, bringing Corazon Aquino to power.
● Aquino’s administration prioritized democratization, notably implementing land reform
to help landless peasants and promoting political decentralization by transferring
powers to local governments.
● These are realizations of long-held advocacies for decentralization and local
autonomy, surfacing as early as the Local Government Reform Policy (LGRP) of
1963. However, implementation challenges remain.
○ In Aklan, a province separated from Capiz, election studies showed that the
best candidate for mayor was an elementary school undergraduate, despite
modernizing qualifications and achievement.
● The enactment of R.A. 7160, the Local Government Code of 1991, by then president
Corazon Aquino was hailed as a response to the growing restiveness to cut the
umbilical cord that tied LGUs to imperial Manila; perceived to be the cause of stunted
growth and underdevelopment (Brillantes, 1997).

Local Government Code of 1991

The Code transferred political authority and responsibility from the national
government to LGUs for the delivery of basic services such as:
● Health (field health and hospital services);
● Social services (social welfare services);
● Environmental (community based forestry) projects;
● Agriculture (agricultural extension and on-site research);
● Public Works (funded by local funds);
● Education (school-building program);
● Tourism (facilitation, promotion and development);
● Telecommunication services and housing projects.

Furthermore, the Code increased LGU’s financial resources by: (1) broadening their taxing
powers, (2)providing a specific share from the national wealth exploited in the area, and (3)
increasing their share from national taxes i.e. internal revenue allotments (IRA), from 11% to
as much as 40% (Brillantes, 1997).

Birthing Pains of Devolution

● After the initial years of implementing the Code, it was reported that it has not been
easy given intervening factors that hampered implementation. Cases include: the
conduct of simultaneous local and national elections in 1992; resistance of devolved
agencies (principally the Department of Health), attempts to recentralize the delivery
of health services: and the IRA formula which stilted the distribution in favor of cities,
to the detriment of provinces and municipalities (Brillantes, 1997).
● Among the developed sectors, health was problematic. Forty-five thousand nine
hundred forty-five (45,945) Department of Health personnel faced problems with
career paths, non-absorption by LGUs, lower salaries, and lack of adequate and
appropriate medicines (Brillantes, 1997).
● Observed organizational and human resource management issues in low-income
areas were:
- Clamor for sales comparative to those of their counterparts in the national
government;
- Lack of human resource management and development office (HRMDO);
- Lack of adequate career development plans;
- Outdated job designs and performance review systems, and;
- Need for changes in recruitment and promotion policies and processes.

Five Years Thereafter

Factors in favor of the LGC in Brillantes’ assessment of the Code’s implementation 5 years
after:
- The Code was the most radical and far-reaching policy to address an over
centralized politico-administrative system;
- It was in accord with provisions of the 1987 Constitution which ensured local
government autonomy;
- It devolved responsibility for enforcement of regulatory powers(reclassification of
agricultural lands; enforcement of environmental laws…);
- It provided legal and institutional infrastructures for the participants with civil society
in local governance;
- It increased financial resources available to LGUs (cited earlier). For instance, in
1996 alone, Php 56 Billion in IRA constituted 13% of the total national budget.
- It laid the foundation for the development and evolution of more entrepreneurial local
governments, encouraging them to “go into business” with the private sector through
build-operate-transfer ventures for example (Brillantes, 1998).
- It created an interagency Oversight Committee composed of LGUs through their
respective Leagues, the Bureau of Local Government Finance, and the Department
of Interior and Local Government that was tasked with responding to devolution
issues;

A devolution Master Plan (1993-1998) was formulated for the sustained implementation of
the Local Government Code. It had 3 Phases:
 Phase One: Changeover (1992-1993) - transfer of devolved functions of LGUs;
Phase Two: Transition (1994-1996) - National Government Agencies (NGAs) and
LGUs institutionalize their adjustment to the decentralized scheme;
Phase Three: Stabilization (1997-onwards) - LGUs build adequate capacities
Some Best Practices
● Brillantes delivered a talk on "Devolution Works: Best Practices at the Local Level"
five years after implementation, during a time of change in management strategies in
the Philippines. Osborne and Gaebler's Reinventing Government argued for
governments to be more businesslike, and quality management performance
became a vogue in governmental reform. This led to renewed faith in local
governance, with faculty members from the Asian Institute of Management enrolling
in the NCPAG doctoral program.
● Galing Pook awards recognized local professionals and best practices to serve as
inspiration for other similarly situated LGUs.
● Concerned with creativity and innovation at the local level, award-giving institutions
such as Gantimpalang Panlingkod Pook (Galing Pook) Awards Program came about.
Galing Pook’s selection criteria included:
- Effectiveness of service delivery;
- Positive socio-economic and/or environmental impact;
- Promotion of people empowerment
- Transferability/replication
● The Konrad Adenauer Medal of Excellence (KAME) Award was launched by Konrad
Adenauer Stiftung (KAS) Philippines and the Local Government Development
Foundation (LOGODEF) in 1996. It is an award for the best-managed local
governments in the Philippines, given every 3 years during the term of a local
government official in honor of Konrad Adenaeur, one-time Mayor of Cologne,
Germany from 1921 to 1933 and the first Chancellor of the Federal Republic of
Germany. KAME is the only foreign award for LGUs recognized by the Senate of the
Philippines in its Resolution No. 681.

The KAME selection criteria consisted of:

- Accountability - flows from the concept of stewardship and rests on
the consent of the government;
- Responsiveness - leaders and public servants address the needs of
the public;
- Managing Innovation - reforms successfully implemented by local
governments in various areas of administration;
- Public-Private Partnership - an active joint working arrangement
between the local government and the private sector;
- Local Government-Citizen Interaction - open communication
among the government, non-government organizations, and the
community as a whole;
- Decentralized Management - ability of the local management to
delineate and delegate responsibilities to various responsibility
centers;
- Networking - ability of the local governments to forge co-operative
relationships with other local governments and other entities;
 - Human Resource Management - sustained implementation of a
program to recruit, train, motivate and develop a local workforce
● The emergence of best practices and their sustained implementation in one locality is
one thing. Their dissemination and adoption elsewhere is another matter. In line with
this, the “Dissemination of Best Practices in Local Governance” project was
undertaken by the Federation of Canadian Municipalities (FCM), International Center
for Municipal Development based in Ottawa, Canada, and LOGODEF in 2000. The
objectives of the research project were:
- To identify various mechanisms used by local governments, municipal
government projects or programs for dissemination/replication of best
practices;
- To identify success factors and variables which can facilitate and are
instrumental in effective dissemination/replication;
- To determine the the nature of assistance provided by international agencies
and country/local government institutions in enhancing local governance;
- To determine appropriate and optional institutional arrangements at the
national and international levels to effectively disseminate best practices.

Some Challenges
Dependence on Internal Revenue Allotments (IRA)
● In 2005, 14 years after implementing the Code, the formula for distributing IRA was
revisited. The IRA is a system of sharing Bureau of Internal Revenue (BIR)
collections with LGUs. The formula entitles LGUs to a predetermined 40% share
distributed in two stages. First is the distribution among four types of LGU: provinces
23%; cities 23%; municipalities 34% and barangays 20%. The second determines
the share of each LGU based on three weighted criteria: population 50%, land area
25%, and equal distribution 25%.
Briefly, issues with the IRA formula were identified:
- IRA does not encourage LGUs to mobilize additional revenues. Further, the
IRA formula does not mandate LGUs to exercise their taxing powers fully;
- LGUs treat IRA as a substitute for local revenue - reflected in delays in
updating their real property values and the LGU revenue code;
- IRA does not take into account the level of development and fiscal capacity of
LGUs;
- Incremental revenues of provinces and municipalities do not match their
additional expenditure obligations
Measures have been proposed to improve the formula:
- Tax effort of LGUs and financial accountability should be included as a
criterion;
- IRA should be adjusted to address existing fiscal imbalances;
- The adjusted criteria should be as simple, transparent and predictable as the
existing one;
- Introduce a fiscal equalization grant mechanism to equalize differences in the
levels and costs of public service provision
Unfortunately, although there have been many proposed reformulations, none have
been adopted. Revising the IRA formula is currently a work in progress.

Impact of devolution on local service delivery

 ● A paper written in 2011 as part of LOGODEF’s assessment of 20 years of Local
Government Code implementation, in such areas as roads, health, and water
services, bore worrisome conclusions. Hereunder are a few revealing insights:
○ There is no significant change in total road length after the passage of the
Code in 1991.
○ Decentralization has resulted in an increase of LGU income, seen in the
sharp increase of the IRA. However, this did not result in efficient spending,
reflected in the gap between income and expenditure of local government.
○ The number of physical health resources (e.g. RHUs) has stagnated and the
number of health personnel has drastically decreased during
post-decentralization.
○ For roads, there was an increase in the number of barangay roads in the
post-decentralization era. However, the increase in the number (and
presumably length) of barangay roads which are of low quality (gravel) does
not speak well of LGUs.
○ For water services, there are no observable trends to support a positive
relationship between decentralization and improved water services provision.

Impact of devolution on politics and governance

● In the same vein, a paper on the impact of devolution on politics and governance was
undertaken as part of LOGODEF’s 2011 assessment. It opened:
Decentralization has been the single most significant political reform after
Marcos… It completely changed the dynamics of politics in the country.
(Tayao, 2011:1)

On the “still un[ful]filling decentralization in the Philippines,” the paper argued:

Much has been gained evidenced in the many success stories and creative
work by local leaders documented by award-giving bodies and the World
Bank resulting in:
- “Islands of good governance”
- Increasing revenue
- Raising community awareness
- Multiplicity of stakeholders
● The Asia Foundation's Rapid Field Appraisals (RFAs) under the Local Assistance
Development Program (LDAP) funded by USAID from 1992 to 2000 show significant
gains in decentralization. The report highlights the importance of prioritizing local
chief executive's priorities, leadership quality, and the relationship between executive
and legislative body in determining local government performance.

Capacitation for Local Policy Making

● Public policy making, in its broadest sense, encompasses not only the interface
between the executive and legislative, but also interaction with government and
non-government entities such as the bureaucracy and a wide spectrum of
stakeholders formulating public policy. The interventions discussed below are liberally
interpreted as part of capability building in local policy-making.

● Project Planning and Management

 The maiden Local Government Capability Building (LGCB) venture of
LOGODEF in 1991 was in the province of Bulacan and Batangas City which was
supported by a sisterhood with the German City of Langenfeld. Raising the
competencies of the provincial and city bureaucracy was an initial target. This initial
venture was documented through the publication of the LGCB Handbook
(LOGODEF, 1991) a practical hands-on tool for Goal-Oriented Project Planning
(GOPP). This tool advances a rational approach to the policy-program-project
formulation process. The GOPP entails participation analysis, problem analysis,
objective analysis, alternative analysis.
Described as an “...effective tool for the successful performance of key management
functions,” GOPP may be conducted through:
- planning /replanning interventions that promote local government capability;
- Team-building and human resource management;
- Monitoring and controlling project activities;
- Evaluation (assessing results or attainment of project purpose and overall
government).
Specifically, GOPP advanced a scientific-rational process in policy/program/project
formulation and implementation by engaging trainees in:
- Participation analysis
- Problem analysis
- Objective analysis
- Alternative analysis, etc.

Inter-local government cooperation

● The importance of local governments helping themselves has likewise been
highlighted in the LOGODEF LGCB intervention in Bulacan. “Cardinal elements” of
LGCB are: structural reforms in their organization, internal systems and procedures,
improving local financial administration, and effective local legislation, among others.
In organizing municipal action teams (MAT), a conference of mayors (COM) serve as
a facilitating and authoritative mechanism and achieves inter-municipal teams (IMT).
MATs were subjected to training in such areas as MAT/IMT as a development
strategy; GOPP; team building competencies; and municipal administration
(LOGODEF, 1993).
● LOGODEF was not alone in promoting inter-local cooperation. LOGODEF, through
its LGCP contracts with individual LGUs, like Bulacan and Bohol, the Department of
Interior and Local Government (DILG), and collaboration with the German
Foundation GIZ’s Decentralization Program, has held a series of national summits.
The strategy is not so much LGUs helping each other but rather engaging in building
alliances among LGUs, NGAs NGOs, grant-giving foundations such as GIZ and
CIDA, and others in the development community (GIZ Decentralization Program:
2012). The inter-local cooperation summits illustrate that the local policy making
process can profit from the cooperation of stakeholders whose resources and
assistance can enhance the capacity of LGUs in managing
decentralization/devolution.

Local Policy-Making
● A rational approach to policy formulation is valuable. Moreover, one has to consider
that policy formulation and national security are embedded in a complex
 environment, the elements of which include economic, socio-cultural and political
dimensions among others. Policy making is a conscious, deliberate, and calculated
move to direct LGUs towards a better future but at the same time inclusive of a
spectrum of competing needs and demands that should be factored into the
decisions.
● In a compendium of policy papers prepared by academics and practitioners
published in 2008 under the heading Local Policy Making: Strategies and
Constraints, the following views were presented towards improving capability-building
in local policy-making.
○ Sociological perspective - every locality is a collection of people with different
demographic characteristics, creating divisive interactions and claims which
vary according to age, gender, occupation, stratification, economic status, and
religion. These competing values and preferences must be resolved.
○ Political Perspective and Quality of Governance - The SWS Philippine survey
of the Asian Barometer Survey of 12 East Asian Countries, conducted by the
National Taiwan University in 2005-2007 applied, “quality of governance
indices.”The result showed the Philippines having had the poorest
performances in:
- Controlling corruption
- Responsiveness (extent government meets needs and expectations of
constituents)
- Electoral participation
- Political efficacy (citizens have influence on political decisions)
- Law-abiding government (extent to which officials abide by law)
○ Policy Science Perspective - From an academic stream, it was argued that
the rational approach to policy making may be applied at the local level. The
said approach advocated a five-stage process (problem-structuring,
forecasting policy consequences, recommending a preferred-policy
alternative, monitoring outputs, and evaluating outcomes/policy performance.
■ The LOGODEF LGCB local legislation experience at Sta. Maria,
Bulacan in 1998 illustrated that it is possible to raise the level of policy
making. To institutionalize the said experience, it was recommended
to:
● Launch a participatory approach that required the sanggunian
to hold sectoral consultations with various stakeholders; and
● Strengthen local institutional capacity of the Sangguniang
Bayan to link with research institutions and government and
non-government organization by providing for a technical
support staff (economists, sociologists, community
development workers) who can conduct multi-sectoral and
interdisciplinary assessment of the local policy environment.
○ Policy Audit - policy audit has been offered as a practical approach to local
policy making (Sosmenya:2008). A policy audit framework was supplied,
which identifies a list of critical codes which local legislatures must address
(i.e. administrative code, local revenue code, investment code, environmental
code, traffic code, health code, land use code, public market code, sanitation
and drainage code, water code and local security code). Said codes are
 within the purview of the powers and functions which the Local Government
Code mandated.

Assessing the Local Policy Making Process

● The law's procedures for local government legislative bodies reflect academics'
rational process, particularly in capacity-building. However, these procedures are
often followed randomly, with legislative agendas being reactive and dealing with
past phenomena.
● A shift to a proactive, yearly legislative agenda is still in its infancy, as most local
governments have not yet accepted this approach. This shift may occur
incrementally, based on the knowledge and competence of the sanggunian and its
staff.