Salcedo, Melvin V. BPA-3B What is LGU stands for? LGU means a local government unit which is a political subdivision of the Republic of the Philippines at the provincial, city, municipal, or Barangay level. Local government units (LGUs) oversee local governance in 81 provinces, 144 cities, 1,490 municipalities, and 42,028 barangays across the country. LGU officials are responsible for providing direct and basic services to the people and ensuring peace and order within communities. It play a major role in a community's development, provide the links between the people and government, address its community's problems and concerns, enforce policies and hold influence over its communities. Does decentralization become more effective specifically in terms of rendering government services? Why? It could be, but it could also not be because effective decentralization is closely related to following the design principles of: finance following clear assignment of functions; informed decision making; adherence to local priorities; and accountability. However, putting these principles into practice has not been easy. Because country circumstances differ, often in subtle and complex ways, the policy and institutional instruments that establish decentralization must be tailored to the specific conditions of individual countries. Although the primary reason for global decentralization is that it is simply occurring, there are a slew of design issues that influence the impact of various types of decentralization on efficiency, equity, and macro stability. In this regard, there is a growing body of literature that investigates the economic rationale for decentralization.