The Political Economy of Decentralization: Financing of Health Services in the Philippines

Joseph Capuno

No 199910, UP School of Economics Discussion Papers from University of the Philippines School of Economics

Abstract: Like many developing countries, the Philippines has decentralized its public health system. Despite its supposed advantages, however, the decentralization, has not led to widespread improvements in local provision. This is partly because many local government units are found financially inadequate since the current revenue-sharing scheme does not factor in the distribution of the devolved expenditure responsibilities across LGU. Moreover, this particular flaw in the present revenue-sharing scheme has made corrective policy measures more difficult to undertake since it is no longer sufficient to compensate those LGUs originally with financing difficulties. More crucially, it has also become politically necessary to compensate those adversely affected by the corrective policy measure. If only to avoid the added cost of further adjustments, the experience of the Philippines underscores the importance of a well-designed and carefully implemented decentralization program.

Date: 1999-10
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Published as UPSE Discussion Paper No.1999-10, October 1999

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Persistent link: https://EconPapers.repec.org/RePEc:phs:dpaper:199910

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