4.2. Impact of CDD Operations on Local
advertisement
69419 COMMUNITY DRIVEN DEVELOPMENT AND ACCOUNTABLE LOCAL GOVERNANCE: SOME LESSONS FROM THE PHILIPPINES October 15, 2009 TABLE OF CONTENTS LIST OF ACRONYMS ................................................................................................................ ii EXECUTIVE SUMMARY ......................................................................................................... iv 1. Introduction ............................................................................................................................1 2. Conceptual Framework and Methodology ..........................................................................3 2.1 Conceptual Framework ....................................................................................................... 3 2.2 Methodology ....................................................................................................................... 4 3. Institutional Environment for Accountable Local Governance ........................................6 3.1 Supply-side Conditions ....................................................................................................... 6 3.1.1 Fiscal Dimension ................................................................................................... 6 3.1.2 Administrative Dimension .................................................................................... 11 3.1.3 Political Dimension............................................................................................... 14 3.2 Demand-side Conditions ................................................................................................... 16 3.2.1 Association ............................................................................................................ 16 3.2.2 Access to Information ........................................................................................... 18 3.2.3 Voice, Negotiation and Oversight......................................................................... 21 4. Accountable Local Governance and CDD Operations .....................................................26 4.1 Impact of Local Governance Conditions on CDD Operations ......................................... 26 4.1.1 The Impact of Supply-side Conditions ................................................................. 26 4.1.2 The Impact of Demand-side Conditions ............................................................... 29 4.2. Impact of CDD Operations on Local Governance Conditions ......................................... 30 4.2.1 The Impact on Supply-side Conditions................................................................. 30 4.2.2 The Impact on Demand-side Conditions .............................................................. 33 5. Conclusions ...........................................................................................................................35 5.1 Main Findings ................................................................................................................... 35 5.1.1 Opportunities for Enhanced Accountability ......................................................... 35 5.1.2 Challenges to Social Accountability ..................................................................... 36 5.1.3 Interactions between Local Governance and CDD Operations ............................ 37 5.2 Recommendations ............................................................................................................. 39 Annex 1: Bibliography.................................................................................................................. 41 Annex 2: Description of the Case Study Projects ......................................................................... 44 Annex 3: Maps and Key Features of the Case Study Municipalities ........................................... 53 Annex 4: Local Governance Conditions: Comparing Enabled and Constrained Environments .. 55 Annex 5: Key Financial Data of the Case Study Municipalities .................................................. 56 Annex 6: Local Governance Conditions and Their Interactions with CDD Operations .............. 58 Annex 7: Local Governance Conditions and the Space for Social Accountability ...................... 60 Annex 8: Examples of CSO Engagement in Social Accountability ............................................. 63 i LIST OF ACRONYMS AED AFP AIP ARC ARCDP ARMM ARSP ATIN AUSAID BAC BBGC BDC BDP BIARSP BJMP BRT CBO CDD CIDDS COA CODE-NGO COMELEC CSO DBCC DILG DPWH DSWD EDF FGD GAA GAD GFI GPRA GSIS ICC INFRES IRA JICA Kalahi KARZONE KCP LCE LDC Agricultural Enterprise Development Armed Forces of the Philippines Annual Investment Plan Agrarian Reform Community Agrarian Reform Communities Development Project Autonomous Region for Muslim Mindanao Agrarian Reform Support Program Access to Information Network Australian Agency for International Development Bids and Awards Committee Barangay-Bayan Governance Consortium Barangay Development Council Barangay Development Plan Belgian Integrated Agrarian Reform Support Program Bureau of Jail Management and Penology Barangay Representation Team community-based organization community-driven development Comprehensive Integrated Delivery of Social Services Commission on Audit Caucus of Development NGO Networks Commission on Elections (Philippines) civil society organization Development Budget Coordination Committee Department of the Interior and Local Government Department of Public Works and Highways Department of Social Welfare and Development Economic Development Fund focus group discussion General Appropriations Act gender and development government financial institution Government Procurement Reform Act Government Service Insurance System Investment Coordination Committee Infrastructure for Rural Productivity Enhancement Sector Internal Revenue Allotment Japan International Cooperation Agency Kapit-Bisig Laban sa Kahirapan (“linking arms in the struggle against poverty”) Kalahi Agrarian Reform Development Zone Kalahi-CIDDS Project Local Chief Executive Local Development Council ii LGC LGPF LGU LPRAP LSB LSR MAO MARO MIBF MDC MFC MHO MIBF MINCODE MOOE MPDO MSWDO NCRFW NEDA NGO NIA NSCB ODA OSR PAP PATSARRD PBAC PCNC PDAF PhP PIO PNP PO POC PPDO PRA PSA RWSA SB SEF ULAP UNICEF USAID Local Government Code Local Governance Policy Forum local government unit Local Poverty Reduction Action Plan local special bodies local sector representation Municipal Agricultural Office Municipal Agrarian Reform Office Municipal-Inter Barangay Forum Municipal Development Council Municipal Finance Corporation Municipal Health Officer Municipal Inter-Barangay Forum Mindanao NGO-PO Network Maintenance and Other Operating Expenses Municipal Planning and Development Officer Municipal Social Welfare and Development Officer National Commission on the Role of Filipino Women National Economic Development Authority non-government organization National Irrigation Authority National Statistics Coordinating Board Official Development Assistance own-source revenue programs, activities, and projects Philippine-Australia Technical Support on Agrarian Reform and Rural Development Pre-Qualifications Bids and Awards Committee Philippine Council for NGO Certification Priority Development Assistance Fund Philippine peso public information officer Philippine National Police peoples’ organization Peace and Order Council Provincial Planning and Development Office Preparatory Recall Assembly participatory situational assessment Rural Waterworks and Sanitation Association Sangguniang Bayan (municipal legislature) Special Education Fund Union of Local Authorities in the Philippines United Nations Children’s Fund United States Agency for International Development iii EXECUTIVE SUMMARY Community-driven development (CDD) is associated with community support approaches to the delivery of public goods and services, promoting civil society empowerment strategies, and favoring the mobilization of community-based organizations (CBOs) for collective action and as interlocutors between people and public service providers. Decentralized local governance is the localization of authority in, and accountability for, the use and generation of fiscal resources and the provision of public goods and services. Local governance relates not only to local institutions like local government and local public sector agencies, but also encompasses a variety of civil society institutions such as community-based resource user groups or citizen oversight bodies. Both these modes of delivering public goods and services hold the promise of making democracy work for the poor by enhancing the means by which those who deliver public goods are held accountable by those who demand them. Indeed, they are complementary approaches. This study proceeds from recognition of the potential complementarities between community-driven development and decentralized local governance, and the need to identify strategies for operational integration. It aims to deepen the understanding of how the institutional environment for local governance interacts with CDD project operations. It gives special emphasis on the issue of accountability, analyzing how CDD operations perform in terms of strengthening the capacity of citizens and civil society to hold local authorities and public service providers accountable, and the capacity of the local government to be held accountable. The study utilizes a two-pronged approach. First, it assesses the institutional environment for accountability in local governance. Second, it examines the operations of two major World Bank-assisted CDD projects in two municipal case study sites. Given that CDD projects both shape and are shaped by local governance contexts in which they are embedded, the study investigates how CDD operations in the Philippines are affected by and are helping reform local governance conditions. It is from the analysis of this interface between CDD operations and local governance conditions that the study aims to generate policy and operational recommendations to enhance integration between CDD and local governance approaches. On the supply side, this study analyzes the extent to which the decentralized: (1) fiscal system generates incentives for citizen participation in local governance and for strengthening demand for public accountability; (2) administrative system enables local governments to act on locally produced policies as well as respond to issues affecting local constituencies; and (3) political system provides incentives for elected political leaders to act independently and in line with local interests. On the demand side, this study describes how the legal framework enables or constrains: (1) association and the pursuit of collective goals by civil society organizations (CSOs); (2) voice and the ability of CSOs to articulate preferences related to societal goals; (3) access to information and the extent to which this enables meaningful CSO participation in local governance processes; (4) negotiation and how spaces for local public debate, lobbying and assembly are utilized to influence public policy choices; and (5) oversight by CSOs of policy formulation, budget planning, execution and procurement processes. Using these conceptual categories, the study addresses the following research questions: iv How does the macro-level institutional environment constrain or enable accountability in local governance? How is this institutional environment manifested where CDD projects operate? What are the effects of the local governance conditions on CDD operations? What impacts do CDD operations have on the local governance context? What policy and operational recommendations can be derived from this analysis? The study was implemented in two phases. Phase 1 analyzed the institutional environment in which local governments and CSOs are embedded and the assessment of the extent to which this environment fosters social accountability. Phase 1 was mainly based on a desk review of local governance policies and relevant literature. Phase 2 focused on the analysis of the enabling environment at the local level as it interacts with CDD operations. Two municipalities were chosen that both had the presence of the two Bank CDD operations but with different local contexts: one with an enabling local environment (Pilar) and one with a constrained environment (Pio Duran). The field research in the case study sites involved project document review, interviews, focus group discussions, and validation sessions with local stakeholders. Main Findings: Opportunities and Constraints for Enhanced Accountability The analysis of the institutional environment for accountability in local governance often found an enabling policy and legal framework in principle, but severely limiting constraints in practice. Local governments have enough administrative autonomy. The Local Government Code (LGC) and the Constitution provide a clearly elaborated set of rules for discretion to legislate, decide and act on locally-produced policies. Local governments also have power over human resource management including recruitment, hiring, and promotion, and defining the organizational structure of the local bureaucracy. However, local governments provide little opportunity for enhancing accountability and transparency. The municipal budget proposed by the mayor is subject to the approval of the Sangguniang Bayan (municipal legislature), but no real deliberations occur in budget hearings, which are usually not open to the public. There is limited effective participation in the preparation and monitoring of the budget, largely because the budget document and other expenditure statements are not disseminated. LGU financial management skills are weak, leadership is lacking, and there is weak oversight by national government agencies. Obstacles to a merit-based system limit the accountability and transparency of the local bureaucracy. Fiscal decentralization generally enhances the institutional environment for local government accountability. Expenditure assignments are generally consistent with the subsidiarity principle, revenue collection responsibilities support efficiency and administrative feasibility, and central transfers are mostly formula-based unconditional grants. These represent a shift away from a highly-centralized fiscal regime, thus enhancing incentives for citizens to participate in local governance and demand accountability. Norms related to central-local fiscal transfers shape local governance conditions. Because these transfers tend not to be based on transparent rules, but on the strength of local political ties v with the central authorities that dispense them, this has fostered a governance mindset that values the ability of local political leaders to obtain external funds for development projects. The result is that these norms undermine citizen participation in planning and budgeting. Local governments face tight fiscal conditions. They are characterized by limited own resource generation, limited capacity for capital spending, dependence on central transfers and budget constraints softened by the availability of significant discretionary central transfers. All these serve to delink local spending from local revenue generation and weaken the incentives for citizens to participate in local governance activities. Political accountability is further weakened to the extent that central government transfers to local governments tend to foster loyalty of elected congressmen to the incumbent president. Accountability is strengthened by the legal political framework. It provides for direct subnational elections from the village to the province, with clear term limits. There is a clear separation of powers between the legislative and executive branches at the national and local levels. Direct democracy is promoted by constitutional provisions for recall, initiative and referendum. At the local level, citizens can propose the enactment, repeal or amendment of an ordinance as well as directly amend, reject or approve an ordinance through referendum. Political dynamics limit the effectiveness of democratic institutions and decentralized administrative arrangements. The absence of platform-based political parties and the predominance of personalistic political culture tend to weaken political accountability by narrowing the range of constituents to whom politicians are responsive. The situation is exacerbated by strong tendencies for local state capture by historically-entrenched local bosses, which historically form the basis for state formation. Access to information is buttressed by four elements of the legal policy framework. First, the Code of Conduct and Ethical Standards for Public Officials and Employees mandates that all public officials provide information on their policies and procedures. Second, the Supreme Court makes rulings on what constitutes information that are public in nature. Third, administrative orders classify documents as public or instruct public agencies on ways to disclose public information. Finally, the 1991 LGC contains important provisions that compel local government to provide information to the public. However, practical constraints to access to information are major obstacles to enhancing the space for exacting local government accountability. Constitutional provisions and jurisprudence are not enough to enforce this right. The loosely-worded list of government information exempt from constitutional provisions is a problem. The right to information is not absolute and is subject to the interpretation of what constitutes information that is of public concern. Compliance with LGC provisions compelling local governments to publicly post relevant information is not closely monitored. Just as serious is the absence of a widespread predisposition for citizens to demand information. The formation of civil society groups is encouraged by strong constitutional provisions for the exercise of civil liberties. Freedom of association and expression, and the right to information, are guaranteed by the 1987 Constitution. Enforcing this right to information are rich vi jurisprudence, a number of executive issuances and a law that obligates public officials to provide information. The exercise of voice, negotiation and oversight by civil society is encouraged at the local level by provisions in the LGC for participation in consultative bodies involved in development, and investment planning and the formulation of sectoral policies. The Philippines also has a fully elaborated legal framework for the establishment of institutions of direct democracy and enhancements to representative institutions. This framework includes: (i) constitutional guarantee of freedom from persecution based on political beliefs and freedom of expression enshrined in a Bill of Rights, (ii) the granting of legislative powers to citizens through LGC provisions for referendum, initiative and recall and a separate law called the Referendum and Initiative Act, and (iii) the establishment of a party list system and local sectoral representation. The provisions for referendum, recall, the party list system, and local sectoral representation have proven ineffective. Three attempts at implementing initiatives at the national level have failed. There has also been no progress at the local level in terms of referendum and recall. The implementing procedures are cumbersome and initiatives taken in the name of people, NGOs and POs are not genuine. LGC provisions for civil society participation in local special bodies are largely ineffective. CSO representation is lacking in substance not only due to lack of capacity but also because the exercise of voice is limited to consultation rather than a substantive role in prioritization and decision-making. There are no operational institutional processes where citizens can exercise oversight and negotiation. Thus, there is a disconnect between the capacities built by CDD operations on the demand side and governance processes in which these capacities may be used. Civil society difficulty in exacting accountability is as also due to their limited technical capacity. CSO engagement with local government in budget monitoring, planning and service delivery is still in its infancy. This partly explains why spaces for civil society participation in local special bodies are not fully exploited. Main Findings: Interactions between Local Governance and CDD Operations The case studies confirm the constraints and opportunities created by demand- and supply-side conditions as shaped by macro-level incentives. Norms related to central-local fiscal transfers shape local governance conditions. Because these transfers tend not to be based on transparent rules but on the strength of local political ties with the central authorities that dispense them, this has fostered a governance mindset that values the ability of local political leaders to obtain external funds for development projects. The result is that these norms undermine citizen participation in planning and budgeting. For example, they put PDAF allocations beyond the ambit of Local Development Councils (LDCs), the body through which the community and CSOs can participate in budget planning and oversight. The LGC provisions for civil society participation in local special bodies lack effectiveness in substance and in form. In both the enabled and the constrained municipalities, the only difference is that there is nominal representation in at least two local special bodies in the former vii (i.e., in the LDC and the Local School Board). CSO representation is lacking in substance not only because of the problem of capacity but also because the exercise of voice is limited to consultation rather than a substantive role in prioritization and decision-making. There are no operational institutional processes whereby citizens can exercise oversight and negotiation. Thus, there is an emerging disconnect between the capacities built by CDD operations on the demand side and governance processes in which these capacities may be used. Despite the constraints imposed by these macro-level conditions, innovations in local governance have been triggered by reformist leaders. While the two case study municipalities are dependent on similar size central transfers for financing much of their expenditures, innovations in cost sharing and enhanced structures of vertical and horizontal accountability are being tested in Pilar but not in Pio Duran. In Pilar, two context-specific factors support this openness to innovation: (i) a local bureaucracy previously exposed to new ideas on cost-sharing and community mobilization through their experience with other donor-assisted projects; and (ii) exposure to provincial government innovations in reducing poverty. However, constrained local environments—due to conflict, elite capture and patronage— reinforce macro-level disincentives for good local governance. In these contexts, the interactions between demand- and supply-side conditions are also evident. Local politics undermine building incentives for social accountability as it imposes constraints on community organizing and makes it more difficult to build trust between communities and local government. In such constrained local governance contexts, CDD operations provide a significant channel for the poor to access goods and for communities to exercise voice. CDD operations enable the alignment of some local development funds and transfers from central government institutions with priorities set by communities, an improvement from previous conditions where the use of these funds was based largely on political discretion. Moreover, the use of social accountability tools like participatory planning, budgeting, monitoring and project implementation are helping develop relevant skills in local governments, citizens and civil society. This encourages community volunteers to engage their elected local leaders. However, it seems unlikely that these innovations and reforms will be sustained or expand beyond the CDD project life. In Pio Duran, CDD projects are giving the communities their first taste of engaging local government at the barangay level and in exercising voice in the choice, implementation and monitoring of sub-projects. But because of the absence of institutionalized processes for negotiation and voice in budgeting and planning, this experience remains in a project bubble. For example, it seems that there are prior conditions that have to be met—on the supply side, reforms in central transfers so that more of these are subjected to local control; on the demand side, capacity for voice and association—for the development councils to institutionalize participatory planning and budgeting introduced by CDD projects. In contrast, in an enabled local governance context, CDD operations have been implemented more smoothly and may influence local conditions beyond the project. In Pilar, CDD operations have led to innovations in bidding and procurement, in leveraging local resources in the mobilization of central transfers, and in energizing the local bureaucracy to find better ways of governing. viii Thus, differences in local conditions contextualize CDD operations and their impacts in an important way. The enabling environment plays a key role in determining opportunities for the ability of CDD operations to help improve local governance conditions. In turn, an understanding of locally-specific factors like these is important in evaluating the opportunities for local governance reforms. Recommendations Enhancing the environment for participation in planning and budgeting requires reforms in central-local fiscal transfers, particularly discretionary transfers. Initial reforms may include requiring that these transfers fund only those projects identified in the municipal development plan. This will give municipalities some control over the allocation of these transfers, rather than it being based only on the discretion of legislators. The institutionalization of cost sharing arrangements, including provincial and congressional transfers, is another potential early reform. This arrangement can align central funds with community-set priorities. It is important to strengthen checks and balances for central transfers, and increase the oversight capacity of civil society. A supply-side constraint may be addressed in part by strengthening demand-side conditions, by building the capacity of national and local NGOs to technically and politically engage in national and local budget processes. CDD operations should better incorporate local governance into their design. It cannot be assumed that municipal and barangay officials and community members will see how the skills and social technologies embedded in CDD operations can be applied to local governance processes. It involves determining if local government processes and institutional arrangements can be the nodes for the institutionalization of participatory practices. This strategy needs to be devised in conjunction with an analysis of necessary policy support to mitigate macro-conditions affecting, but not directly within, the ambit of project operations (e.g., the problems posed by politicized central transfers). A local government assessment tool could help CDD operations to adopt context-specific strategies to exploit opportunities for improving local governance. Some local contexts are more conducive than others in mainstreaming participatory and inclusive governance processes. Innovations in cost sharing, mainstreaming participatory procurement, and poverty-targeted budgeting require further investigation, documentation and support. They would make good readiness indicators for CDD institutionalization. The ultimate success of CDD is determined when its key principles of participation, transparency and accountability are incorporated into the planning and budget systems of local governments. This in turn, supports the long-term agenda for reform. This report shows some factors that shape the local governance and accountability space are within the influence of CDD operations. These include shoring up administrative skills of the local bureaucracy for participatory governance, animating governance arenas like the barangay assembly, building community capacity for voice, negotiation and oversight, and using the experience of civil society-local government synergies to generate trust. However, other factors are beyond the influence of CDD operations, ix such as local political dynamics, the politics of central-local transfers, and the design of institutional arrangements for vertical and horizontal accountability. Therefore, CDD operations alone are not enough to institute the necessary reforms for greater accountability in local governance. Rather, they are seedbeds of reform that need to be nurtured by complementary initiatives that will address the problems of patronage, discretion and lack of transparency. x 1. Introduction The past two decades have been a watershed period in the evolution of democratic practice in the Philippines. In 1987, in the aftermath of a popular uprising that ousted President Ferdinand Marcos, the government ratified a new constitution with strong provisions for associational autonomy that laid the framework for decentralization. In 1990, the Local Government Code (LGC) was enacted for implementing decentralization. This law provided for the substantial devolution of public authority to directly elected sub-national levels of government which were also vested with increased shares of internal revenue and the power to generate their own revenues. The LGC also mandated civil society participation in local governance processes. The Philippines also made important strides in poverty alleviation during this period, almost halving poverty incidence from 44.2 percent in 1985 to 24.7 percent in 2003. However, the most recent poverty statistics reveal a rise in poverty incidence to 26.8 percent in 2006. The absolute number of families living in poverty also grew from 4.0 million in 2003 to 4.6 million in 2006. Moreover, income equality has persisted with the GINI coefficient worsening from 41.0 in 1985 to 44.5 in 2003. Community-driven development (CDD) sees the poor as the prime actors rather than targets of poverty reduction efforts. Control of decisions and resources rests with community groups working in partnership with demand-responsive organizations and service providers such as local governments, non government organizations (NGOs) and central government agencies. CDD is associated with community support approaches to the delivery of public goods and services, promoting civil society empowerment strategies, and favoring the mobilization of community-based organizations (CBOs) for collective action and as interlocutors between people and public service providers. Decentralized local governance is the localization of authority in, and accountability for, the use and generation of fiscal resources and the provision of public goods and services. Local governance relates not only to local institutions like local government and local public sector agencies, but also encompasses a variety of civil society institutions such as communitybased resource user groups or citizen oversight bodies. Both these modes of delivering public goods and services hold the promise of making democracy work for the poor by enhancing the means by which those who deliver public goods are held accountable by those who demand them. Indeed, they are complementary approaches. Serrano et al. (2005:2) note they share the same basic principles: “the empowerment of citizens in interactions with governance and service provision institutions, the importance of beneficiary demand for determining service characteristics, greater administrative autonomy among service delivery managers along with greater accountability to citizens and service consumers, and enhanced local organizational and human capacity for increased impact and sustainability.” This study proceeds from recognition of the potential complementarities between community-driven development and decentralized local governance, and the need to identify strategies for operational integration. It aims to deepen the understanding of how the institutional 1 environment for local governance interacts with CDD project operations. It gives special emphasis on the issue of accountability, analyzing how CDD operations are performing in strengthening the capacity of citizens and civil society to hold local authorities and public service providers accountable, and the capacity of the local government to be held accountable. The study utilizes a two-pronged approach. First, it assesses the institutional environment for accountability in local governance. It analyzes the key macro-level institutional constraints and enablers in enhancing accountability in local governance. It presents micro-level snapshots of this institutional environment as manifested in two local contexts, one enabled and one constrained municipal government. Second, it examines the operations of two major World Bank-assisted CDD projects—the KALAHI-CIDDS Project (KCP) and the Agrarian Reform Communities Development Project (ARCDP2)—in the two municipal case study sites. Given that CDD projects both shape and are shaped by local governance contexts in which they are embedded, the study investigates how CDD operations in the Philippines are affected by and are helping reform local governance conditions. It is from the analysis of this interface between CDD operations and local governance conditions that the study aims to generate policy and operational recommendations to enhance the integration between CDD and local governance approaches. There is a unique opportunity to strengthen the demand-side of governance in the current national decentralization and local development policy debate which has predominantly focused on public sector performance and finance. This study draws lessons and makes recommendations on how to deepen, scale up, and strengthen the sustainability of CDD more consistently, building upon and expanding innovations from current operations. Ultimately, this initiative aims to assist in developing analytical tools for making policy, institutional, and operational choices that simultaneously support CDD and local governance reforms by utilizing social accountability as the foundation for increasing local governance transparency, accountability, and effectiveness in service delivery to the poor. The next section of this paper presents the conceptual framework and methodology of the study. Section 3 presents the findings of an assessment of the institutional environment for accountable local governance based on its analysis of supply and demand side conditions and their manifestation in the case study sites. Section 4 presents the key findings in the case studies sites in terms of how this institutional environment impacts CDD operations and vice versa. The paper closes with a synthesis of the key research findings as well as recommendations for enhancing the possibilities for complementarities between CDD and decentralized local governance based on the experience of the Philippines. 2 2. Conceptual Framework and Methodology 2.1 Conceptual Framework In this study, the institutional environment for local governance is conceived as being constituted by conditions that underpin the ability of local governments to be held accountable (supply-side conditions) and the ability of citizens and/or civil society to hold local governments accountable (demand-side conditions). It posits that this environment has a structuring influence on CDD project operations, circumscribing the ability of CDD interventions to make a significant impact on improving the conditions for local government accountability and local governance reforms. For the supply side analysis, the study utilizes the framework developed by Yilmaz, Beris and Serrano (2008) who identify fiscal, administrative and political dimensions of decentralization that circumscribe local government discretion and accountability. The fiscal dimension of decentralization relates to the devolved roles and responsibilities in the regulation of revenue generation, expenditure assignments, intergovernmental transfers and borrowing. The administrative dimension relates to local discretion over legislation, regulatory enforcement and the civil service. The political dimension relates to how citizens elect and interact with local leaders, the party system and oversight mechanisms. These dimensions of decentralization define the discretionary space within which local governments are held accountable upwards by higher tiers of government and downwards by citizens. In the schema, mechanisms for public accountability (systems of check and balances as well as oversight) complemented by social accountability (mechanisms whereby citizens directly engage the government to perform oversight functions) guard against the abuse of local discretion. This study focuses on the incentives for accountability embedded in these dimensions of decentralization, in particular de jure and de facto conditions that enable or constrain the ability of local governments to be held accountable. It analyzes the extent to which the decentralized: (1) fiscal system generates incentives for citizen participation in local governance and for strengthening demand for public accountability; (2) administrative system enables local governments to act on locally produced policies as well as respond to issues affecting local constituencies; and (3) political system provides incentives for elected political leaders to act independently and in line with local interests. For the demand-side analysis, the study uses the framework described by Anheier (2006) to assess the environment for effective civic engagement and social accountability. In this framework, civic action is enabled by the interface of external (i.e., legal framework, governance and accountability conditions, and economic and social conditions) and internal (i.e., CSO capacity for civic engagement, social accountability and service delivery) conditions that nurture association, resources, voice, information, and negotiation. Association is freedom of association and the institutional legitimacy of civil society. Resources refers to the ability of civil society to mobilize resources for organizational objectives. Voice means the ability of civil society to formulate, articulate and convey opinion. Information relates to access to information as well as the organizational accountability and transparency of public institutions. Negotiation pertains to the existence of spaces and rules of engagement for public and internal debate. 3 This study focuses on the legal framework governing the exercise of citizen rights to association, voice, information and the performance of negotiation and oversight functions.1 In particular, it gives a detailed description of how the legal framework enables or constrains: (1) association and the pursuit of collective goals by CSOs; (2) voice and the ability of CSOs to articulate preferences related to societal goals in public processes within and outside formal structures of representation; (3) access to information and the extent to which this enables meaningful CSO participation in local governance processes; (4) negotiation and how spaces for local public debate, lobbying and assembly are utilized to influence public policy choices; and (5) oversight by CSOs of policy formulation, budget planning, execution and procurement processes. In summary, this study conducts an inventory of the above demand and supply-side conditions circumscribing local governance and accountability as they are prescribed in the macroinstitutional environment. It examines how these conditions are manifested in case study municipalities with the presence of CDD operations. Then the study turns to exploring how these conditions affect CDD operations and how CDD operations impact upon these conditions. Using these conceptual categories, the study addresses the following research questions: How does the macro-level institutional environment constrain or enable accountability in local governance? How is this institutional environment manifested where CDD projects operate? What are the effects of the local governance conditions on CDD operations? What impacts do CDD operations have on the local governance context? What policy and operational recommendations can be derived from this analysis? 2.2 Methodology The study was implemented in two phases. Phase 1 involved the analysis of the institutional environment in which local governments and community-based organizations are embedded and the assessment of the extent to which this environment fosters social accountability. Phase 1 was based mainly on a desk review of policies and relevant literature. To validate the analysis, the desk review was complemented by key informant interviews involving: program personnel and key policy staff in government agencies—such as the Department of the Interior and Local Government (DILG), Department of Social Welfare and Development (DSWD), and the Department of Agriculture (DA)—which are either implementing programs under the World Bank CDD portfolio or with a direct mandate to regulate decentralization processes; civil society organizations with projects in participatory local governance including community-based service providers involved in co-production initiatives; and academics working on themes related to decentralization and local governance. 1 The internal conditions—in particular the capacity of CSOs to engage in exercises of social accountability—were explored in the case study sites. Also, instead of “resources”, the study includes “oversight” as the enabling element of interest in the analysis of demand side conditions. “Oversight” relates to the existence of spaces and rules of engagement for the exercise of citizens' control in over local governance processes including policy formulation, budget planning, execution and audit and local public procurement. 4 Phase 2 focused on the analysis of the enabling environment at the local level as it interacts with CDD operations using the case study approach. Two municipal sites were chosen that both had the presence of the KCP and ARCDP2 CDD operations but with different meso-contexts (the province in which municipalities are situated) and the filtering criteria are political stability and the level of development as determined by inputs from field personnel and national managers of the CDD projects (see Annex 2 for a description of the two projects and their objectives, components, and methods of promoting social accountability). The objective is to capture how CDD operations can better reflect the variance in local governance. Therefore two quite different case study sites were chosen: one with an enabled local environment and one with a constrained one (see Annex 3 for maps and key features of the two case study municipalities and provinces). Pilar, in Bohol Province, was considered as having a relatively enabled meso-environment for local governance because it is in a province that has made substantial progress in reducing poverty, improving political stability and implementing governance innovations. Meanwhile, Pio Duran, in Albay Province, was considered as having a relatively constrained environment as it is in a province that is calamity-prone due to its topography, still battling with an insurgency problem and having two changes in provincial leadership within six years. The field research involved collecting primary and secondary data. First, project reviews, appraisal documents and socio-economic studies related to the CDD projects were reviewed to draw out and validate assumptions about the local institutional environment. The municipal development plan, budget and annual investment plan were reviewed. Second, representatives of local agencies involved in the implementation of CDD projects— including the Project Management Office (PMO), mayor’s office, participating CBOs and other NGOs in the municipalities—were interviewed about CDD operations. Key members of the local bureaucracy (e.g., the municipal treasurer, accountant, planning and development officer) and members of the Sangguniang Bayan (SB, the local legislative council) were also interviewed about local governance conditions. Third, focus group discussions (FGDs) were conducted with three distinct groups: (1) representatives of local civil society including the church, media, business groups, school boards and NGOs; (2) village beneficiaries of the CDD projects; and (3) village non-beneficiaries. The FGDs, involving 8-10 individuals each, were used to explore the demand-side conditions in the case study municipalities and to ascertain civil society views about supply-side conditions. In the case of FGDs involving village-level participants, three villages (barangays) were randomly chosen—two from among beneficiary barangays and one from among those that have not received funding from the CDD projects. CDD project community organizers helped identify participants for the FGDs, mostly members of the barangay-level committees of the CDD projects as well as barangay government officials. Sub-FGD groups are formed to make sure that barangay officials are interviewed separately from non-officials. Finally, validation and echo sessions were held at the end of the field visit. Initial results were presented to local stakeholders to obtain comments and other feedback. The findings were also presented to national experts on local governance and CDD at a seminar held in Manila to obtain comments from practitioners. 5 3. Institutional Environment for Accountable Local Governance Decentralization in the Philippines has been described as being among the most in-depth and extensive in Southeast Asia (Rocamora 2003). White et al. (2005:33) note that the Philippines is the only East Asian country with a multiparty political system where direct elections are conducted at all government levels. Whether this institutional environment provides incentives for enhanced accountability of local governments is the focus of this section. Decentralization in the Philippines, as designed and practiced, presents a mixed picture. While it generates opportunities for enhanced accountability, it is also limited by constraints rooted in politics, including its historical and institutional basis. However, this study also finds that reformist leaders have triggered innovations in local governance despite constraints imposed by macrolevel conditions. This section now explores in detail these supply and demand-side opportunities and constraints. By presenting snapshots of the case study sites, it shows the extent to which these conditions are manifested on the ground and under what circumstances challenges are overcome (see Annex 4 for a table summarizing supply and demand conditions in the enabled and constrained environments). 3.1 Supply-side Conditions One of the stronger aspects of supply-side conditions for accountability in the Philippines is a fully-elaborated formal framework for fiscal, administrative and political decentralization. However, this study found that there are elements of the decentralization framework that weaken incentives for accountability. These conditions—both the opportunities and constraints—have a structuring influence on the operations of CDD projects and define the limits of their potential to improve local governance conditions. In this section, advances in each dimension are described and then key constraints are analyzed. 3.1.1 Fiscal Dimension Fiscal Decentralization Framework Key aspects of fiscal decentralization in the Philippines generally enhance the institutional environment for local government accountability by delineating the local government service delivery responsibilities and the means by which local governments finance them. First, expenditure assignments are generally consistent with the subsidiarity principle. This requires that a given public function must be assigned to the lowest level of government whose geographic area internalizes the costs and benefits of decision-making (Shah 1994). In the Philippines, provinces are assigned responsibility for services whose catchment area covers more than one municipality while municipalities are responsible for the delivery of basic services. Second, the vertical assignment of revenues adheres to the tenets of equity and efficiency. Following the equity principle, progressive taxes (i.e., the income tax)—collected to finance the redistributive function of government—are collected by the central government. Following efficiency and collection feasibility principles, local governments collect taxes on immobile factors, like real property and community taxes. 6 Third, the majority of central transfers to local governments are formula-based unconditional grants. In 2003, almost 70 percent of these transfers were in the form of internal revenue allotments (IRA), the local government’s guaranteed share of national income (Soriano et al. 2005). The IRA is distributed across local government units based on the following formula: 23 percent to provinces, 23 percent to cities, 34 percent to municipalities and 20 percent to barangays. The respective shares of local governments are determined on the basis of population (50 percent), land area (25 percent) and equal sharing (25 percent). All these represent a shift away from a highly-centralized fiscal regime, thus creating enhanced incentives for downward accountability, which in turn heightens the stakes for citizens to participate in local governing structures and demand accountability. However, these are countered by disincentives embedded in the fiscal system that hinder accountability by weakening the link between resource generation and spending as well as the capacity of local governments to respond to demands from citizens. Challenges to Fiscal Accountability The weakening of the link between resource generation and spending reduces accountability based on local taxation where tax payers (citizens) demand accountability from tax spenders (local governments). It is caused by the confluence of three interacting factors: weak local revenue generation, some lack of clarity in expenditure assignments, and the degree of dependence on central fiscal transfers by local governments. First, local revenue generation efforts are weak. Local tax revenues constitute a relatively small share of local income. In 2001, own-source revenue (OSR) accounted for 36 percent of total revenues of all local governments—76 percent of OSR is from tax revenues. However, the World Bank (2004:19-20) also finds that the OSR share of total revenues declined more than 20 percent since the 1980s while the share of revenue from national government transfers increased by the same amount. Manasan (2004:21) calculates that local government revenue effort rose only from 0.8 percent of GNP in the pre-Code period to 1.2 percent of GNP in the post-Code period. The design of decentralized revenue assignments and the administrative weaknesses of the local bureaucracy partly explain weak local tax effort. In particular, the structure of revenue responsibilities score low on autonomy and incentives born by horizontal assignments. The LGC limits the power of local governments to set tax rates by: (i) fixing the tax rate of some taxes like the community tax; (ii) setting limits on the tax rates of the rest; and (iii) mandating that tax rates can be adjusted only once every 5 years and by no more than 10 percent (Manasan, 2004:20). The horizontal assignment of taxes across local government units also distorts collection incentives. For example, provinces retain only 35 percent of their real property tax collections (World Bank 2004:18). Local tax administration capacities are weak. Manasan (2004:21) notes that personnel assigned to the tax division tend to not be technically-equipped. Very few units, for example, have certified public accountants thereby impairing audit and assessment capabilities. The World Bank (2004:22- 7 25) finds weak administrative capacity for all major tax administration functions: registration, collection and compliance. Second, there is persistent lack of clarity in some expenditure assignments. This obfuscates the division of responsibilities between central and local government and thereby potentially blurring accountability. Manasan (2004:6) notes that the LGC allows the central government to finance devolved public works, infrastructure projects and other programs and services provided that these are “funded by the national government under the Annual General Appropriations Act, other special laws, pertinent executive orders, and those wholly or partially funded from foreign sources” and to augment the basic services and facilities provided by local government when these are inadequate or unavailable. These provisions are utilized by Congressmen to access pork barrel funds by “the simple act of inserting a special provision in the General Appropriations Act which ordains that monies from such augmentation funds can only be released for projects that are identified by members of Congress (Manasan 2004:7).” During 1994-97, the internal budgets of the Department of Agriculture (48 percent), Department of Health (25 percent), Department of Social Welfare and Development (22 percent) grew faster than the internal revenue allotment (15 percent). Capuno et al. (in Manasan 2004:7) found that agencies such as the Department of Education (DOE), Department of Health (DOH), and Department of Public Works and Highways (DPWH) continued to spend significant amounts on devolved activities during 1995-99. Third, intergovernmental fiscal relations further undermine incentives for local revenue generation. The LGC mandates that IRA transfers equal 40 percent of national tax collections for the previous three years.2 This increased the local government share of national revenues which averaged 13 percent of net receipts in the period 1987-1990 (Manasan 2004:26). The share of IRA in total local government income ballooned from 36.7 percent in the pre-Code period (1985-1991) to 65.3 percent in the post-Code period (1992-2003). Transfers as a share of local government income are even more pronounced in provinces and municipalities. This is not surprising given the limited own-source revenue generated by these units where the share of IRA in total income averaged 81.3 percent and 74.1 percent, respectively, in the post-Code period. Soriano (2005:1) notes that this ratio is probably closer to 100 percent in very poor municipalities. This was true in the case study municipalities where IRA averaged almost 90 percent of local income during 2004-2006 (see Table 1; see Annex 5 for additional data on revenues and expenditures for Pilar and Pio Duran). Contrary to trends in IRA transfers observed in the late 1990s (see for example, Manasan 2004), IRA has been a stable and reliable source of financing since 2000. Interviews in the case study sites indicate that there have been no delays or unexpected reductions in the transfers. The way IRA is distributed among local government units distorts incentives for accountability to the extent that it favors units with latent taxing powers. Budget constraints remain soft even in units which could most withstand hardened constraints. In particular, almost a quarter of IRA is allocated to more than a hundred cities, while about one-third is shared by 2 The implementation of this provision was phased in over three years, beginning at 30 percent and rising to 40 percent in 1994. 8 about 1,500 municipalities. This means that cities, which may be assumed to have larger tax bases than municipalities, receive more IRA rather than municipalities. Manasan (2004:36) notes that the shares in IRA are not proportional to the cost of devolved functions born by different levels of local government. Table 1. Central transfers to Pilar and Pio Duran: 2004-2006 Pilar, Bohol IRA (in M PhP) IRA as a percentage of local income EDF (in M PhP) Legislator’s allocation (in M PhP) Legislator’s allocation as a percentage of EDF Pio Duran, Albay IRA (in M PhP) IRA as a percentage of local income EDF (in M PhP) Legislator’s allocation (in M PhP) Legislator’s allocation as a percentage of EDF 2004 2005 2006 Average 24.9 87.1 4.5 0.7 15.4 25.9 85.2 5.2 1.7 31.9 31.5 88.2 6.3 0.8 11.9 27.4 86.8 5.3 1.0 19.7 34.9 93.4 7.0 3.1 43.8 37.7 85.3 7.5 0.7 8.6 45.6 81.8 9.1 0.0 0.0 39.4 86.8 7.9 1.2 17.5 EDF = Economic Development Fund M PhP: millions of Philippine pesos Source: EDF estimated from the Pio Duran and Pilar Statement of Income and Expenses, 2004-2006 Legislator’s allocation computed from www.dbm.gov.ph/dbm_releases/dbm_releases.htm Specific-purpose grants or non-IRA central transfers, while constituting a relatively small share of local revenue, account for a substantial share of local capital expenditures. This provides further evidence of the dependence of local development financing on central transfers. In 2003, non-IRA transfers constituted only 11 percent of total funds available for devolved functions. However, this figure remains significant because, unlike IRA transfers, a larger portion of non-IRA transfers are allocated for capital expenditures (rather than personnel and overhead costs). Soriano et al. (2005:16) found that up to 89 percent of non-IRA transfers in 2003 were spent on capital outlays compared to no more than 20 percent of IRA transfers. In absolute terms, capital expenditures from IRA and non-IRA are roughly the same: 22.6 billion Philippines pesos (PhP) and 28.2 billion PhP, respectively. Congressional allocations, totaling PhP 14.9 billion, accounted for the lion’s share of nonIRA transfers in 2003. Soriano et al. (2005:21) find that more than 95 percent of these funds were used for capital outlays. More significantly, 70 percent of these were channeled to municipalities. Almost the entire amount (PhP 14.5 billion) went to DPHW infrastructure projects. Line agency funds and ODA grants, although smaller than congressional allocations, are important sources of funds for education, agriculture and roads. Table 1 also shows that there were years when these discretionary central transfers represented an even higher portion of EDF—44 percent in Pio Duran in 2004 and 32 percent in Pilar in 2005. These figures show that in the years under review, at least a fifth—in some years even more—of capital spending in the case study sites are funded by discretionary transfers from the central government Unlike Pio Duran, Pilar is more creative in negotiating the limits of its fiscal constraints and is better able to align public investments with community preferences. On average, during 2004-2006, Pilar generated 10 percent of local income from its own local resources while Pio Duran generated only 5 percent. The business tax collected in 2006 was five times the 9 amount collected in 2004. Pilar’s municipal enterprises3 earned three times the income of those in Pio Duran. This is partly explained by the enabled environment in Bohol, which made possible the influx of donor-assisted funds in the province. These projects energized and trained the local bureaucracy and exposed the municipal government to innovations in cost-sharing. In comparison, Pio Duran’s experience with donor-assisted projects is relatively new. Development planning is a process of surviving from project to project rather than a coordinated means of delivering public goods. Fiscal constraints have led to the government’s dependence on project funds. Because significant funds for development projects are barely coordinated by the municipality and are subject to the political ties of local politicians to national politicians, there is a strong sense that development is a byproduct of projects fortunate enough to receive funding. Local Fiscal Constraints Local fiscal constraints diminish the ability of local governments to respond to citizen demands. This may be detrimental to fostering downward accountability as citizens may judge local governments as unable to respond to their needs and not worth engaging. Manasan (2004) presents three trends in local government expenditure that describe the fiscal squeeze faced by local governments. First, although aggregate spending increased in real terms for almost all services shortly after the devolution, spending stagnated during 1998-2001 and declined during 2001-2003. Real per capita local government spending on health declined from PhP 59 in 2003 to PhP 53 in 2007. Per capita spending on infrastructure also declined. Second, increases in local government spending during 1991-2003 are due solely to the increased share in health spending. The expenditure shares of education, social welfare and housing declined. The increased share in health spending was due to local financing of devolved health personnel. This accounted for more than half of the total cost of all devolved personnel. Third, expenditures in the same period are dominated by personnel services, which on average account for half of local expenditures. Manasan (2004:17) notes that personnel costs reported in financial statements generally tend to underestimate actual spending. In some local government units, as much as 15-20 percent of operational expenses is paid out to contracted personnel. Still other local governments charge some of their personnel costs against public enterprises, such as public markets and slaughterhouses. The fiscal squeeze this imposes is demonstrated by the case study municipalities. Table 2 shows that personal services account for a significant portion of budget appropriations, though within statutory requirements. Note that this line item does not reflect actual personnel outlays to the extent that hiring of some local personnel are sourced from non-cash costs (for example, the budget for municipal enterprises). The employment of non-permanent (casual) employees enables them to hire more personnel because this kind of employee does not receive benefits. 3 These include public markets, slaughterhouses, cemeteries and water utilities. 10 Both municipalities hire more casual employees by declaring plantilla positions “vacant” and then hire casual employees to fill those vacancies. Table 2. Budget Appropriations of Pilar and Pio Duran: 2007 Pilar Amount Share of Items (millions of total pesos) (percent) Personal services 16.42 44.2 Capital outlays .56 1.5 Maintenance and operating expenses 2.80 7.5 Non-office costs* 17.38 46.8 Total budget 37.16 100 Pio Duran Amount Share of (millions of total pesos) (percent) 25.44 55.4 .65 1.4 4.63 10.1 15.22 33.1 45.94 100 Source: Appropriations Ordinance, Office of the Sangguniang Bayan, Pilar and Pio Duran. * Includes Calamity Fund, Economic Development Fund, Gender and Development (GAD), and subsidies to barangay and municipal enterprises. 3.1.2 Administrative Dimension As with fiscal decentralization, formal autonomy and discretion given to local government fosters accountability by clearly delineating what they can be held accountable for. Formal rules defining the autonomy of local governments can be found in the 1987 Constitution, the 1991 Local Government Code (LGC) and the 1989 Organic Act for Muslim Mindanao. Budget and Planning Four features in local budgeting tend to make it non-transparent. First, the annual budget is based on revenue targets that are based on rough estimates of past trends in local government revenue generation. Cuts are made across the board and 10-15 percent reserves on appropriations for maintenance and other operating expenses (MOOE) are made at the start of the year in anticipation of revenue shortfalls. Second, granting additional personnel benefits out of “savings” has led LGUs to manipulate the budget figures to generate “savings”. Third, no consideration is given to program performance and cost-effectiveness in making budget allocations. LGUs approach the budget in an incremental fashion after funds are set aside for mandatory expenditures and assume that the existing funding level is appropriate. Fourth, there is limited effective participation in the preparation and monitoring of the budget. The public usually was not invited to budget hearings although they are officially open to the public. Public monitoring of budget execution is not possible since the budget document and other expenditure statements are not disseminated. There is a weak environment for internal and external controls. In particular, LGU financial management skills are weak, leadership is lacking, and there is weak oversight by national government agencies. Most LGUs do not have internal auditors. The intergovernmental oversight function follows the procedures mandated by the DILG and the Commission on Audit (COA). Department heads and SB members meet twice a year to formulate an executivelegislative agenda in accordance with DILG requirements. However, these meetings appear to be pro-forma. The municipal budget is forwarded to the provincial Sangguniang Panlalawigan which approves it after review to ensure that the budget is within allowable limits, particularly in terms of the statutory items such as the Calamity Fund. 11 In the case study sites, the debilitating effect of the mayor’s discretionary powers on accountability is best exemplified in the budget process. In both the enabled and constrained municipalities, the mayor’s role was decisive in the preparation and approval of the budget for capital and operational expenditures. The municipal budget proposed by the mayor is subject to the approval of the SB, but no real deliberations occur in budget hearings, and the mayor’s budget is typically passed en toto. There is a lack of effective community participation in the preparation and monitoring of the budget and procurement. In Pilar, there are 11 CSO representatives on the Local Development Council (LDC), but the LDC is only presented the Annual Investment Plan (AIP) and there are no real deliberations about the municipal priorities reflected in this plan. In Pio Duran, the 2006 minutes of the LDC indicate that no CSOs were represented on the LDC, a fact that is confirmed by community members interviewed. There is no community participation in the monitoring of municipal budget implementation and procurement activities in either municipality. Capital expenditures are subject to only perfunctory oversight. This basically amounts to finalizing the AIP a list of priority projects to be funded by the municipal EDF. The list is mainly decided by the mayor with technical inputs from the Municipal Planning and Development Officer (MPDO). On paper, there are two layers of checks and balance: (1) the LDC, which needs to approve the AIP; and (2) the SB, which needs to approve the budget for the AIP. In both Pio Duran and Pilar, these checks seemed to be performed only perfunctorily. The LDC meeting is more consultative than a forum for debate and decision-making. The participation of the SB Appropriations Committee Chairperson in the Local Finance Committee, which on paper consolidates the municipal budget proposal, “facilitates” the smooth passage of the budget. At the barangay level, development planning is generally interpreted as annual investment planning. This is mainly done by the barangay council, treasurer and barangay captain with little participation from the community. The budget for operational expenditures—including personnel, maintenance and operations—is supposed to be devised with inputs from municipal department heads. This is done in Pilar. In Pio Duran, a high-ranking municipal official said that this is not regular practice and the one time that he submitted a departmental budget for consideration, he was disheartened because the final budget submitted by the mayor did not reflect any of his proposals. Another official says that mayor ultimately decides on budget cuts in maintenance and operational expenditures and there are no formal rules that form the basis for these cuts. Human Resource Management Local governments generally have the power to hire and promote personnel and determine the organizational structure of the administrative branch. These powers are circumscribed by Civil Service Commission regulations and a wage bill cap of 45-55 percent of the total local budget. The LGC mandates that all local governments design and implement their own organizational structure and staffing pattern taking into consideration its service requirements and financial capability. 12 The chief executive of every LGU is responsible for human resource management in his unit in accordance with the Constitutional provisions on civil service, pertinent laws, and rules and regulations. The local chief executive (LCE) has the power to employ emergency or casual (nonpermanent) employees for a period of six months paid on a daily wage or piecework basis and hired through job orders for local projects authorized by the Sanggunian without Civil Service Commission approval. The LGC mandates the LCE to establish a personnel selection board to assist the LCE. A Civil Service Commission representative is supposed to sit on this board as an ex officio member. Obstacles to a merit-based system limit the accountability and transparency of the local bureaucracy. Local governments have found ways to circumvent regulations on hiring, firing and the wage bill. LGUs opt not to fill mandatory devolved positions to create fiscal surpluses deployed elsewhere. In some cases, local governments hire temporary “consultants” to fill civil service positions quickly and with minimal bureaucratic intervention (Azfar et al. 2001). Interviews at the case study sites indicate that personnel hiring is highly politicized and many casual employees are employed. The employment of a substantial number of casual employees has significant consequences on the quality of human resources. None of these casual employees are subjected to periodic professional performance evaluation nor benefit from training. Moreover, the municipal treasurers in both municipalities recognize that the hiring of casuals may have serious implications for accountability systems. For example, casual employees have responsibility for “accountable forms” like fee collection receipts. The relatively better local governance conditions in Pilar are reflected by municipal government innovations that support vertical and horizontal accountability. First, municipal department heads meet every Monday morning to report on their activities and achievements. These meetings are open to the public and are attended by the mayor and the SB. They provide an opportunity to inform the public and the SB about local executive branch activities. Second, barangay assemblies have been regularized. Some meet more than the required twice a year. They are attended by representatives from the municipal government, barangay officials and community members. Since 1994, municipal department heads report to the barangay assemblies on the progress of key projects and programs. Third, Pilar began holding SB sessions in a barangay. This was initiated by barangay officials to provide closer links between the municipality and the barangay, and to familiarize the barangay council with parliamentary procedures used by the SB. There have been no such innovations in Pio Duran. Government Procurement The enactment of the Government Procurement Reform Act (GPRA) in 2002 significantly improved the legal framework for procurement. The LGC was passed when no unified framework was available and procurement was governed by 60 laws, presidential decrees, executive orders, and issuances from line agencies. This led to confusion, as each autonomous LGU adopted its own procurement rules. This resulted in inefficient procurement and susceptibility to corruption. From the perspective of this study, the most important features of the GPRA and its rules and guidelines are: (1) reorganizing and strengthening agency and LGU Bid 13 and Award Committee (BAC) and procurement units to ensure accountability in procurement processes, including prohibiting the local chief executive from being the Chairman of the BAC; (2) minimizing anomalous procurement practices such as rigged bidding, fake advertising notices, misrepresentations in bid proposals, and irregularities in bid evaluation, inspection and contract implementation; (3) strengthening rewards and sanctions in procurement performance; (4) establishing an appropriate complaints mechanism; and (5) strengthening CSO involvement in policy formulation and reform implementation (WB 2005:33-34). Implementation is still in its infancy and administration is still weak. In particular, the following need to be monitored: (1) reports that congressional initiatives and pork barrel spending in district-level projects tend to be non-transparent as some officials are reported to predetermine winning contractors; (2) dissemination of information regarding the implementation of the procurement act among stakeholders; and (3) capacity building for BAC members as they lack experience and capacity in dealing with procurement (WB 2005:35-36). The third point was reflected in the case study sites where civil society groups do not participate in the PreQualifications Bids and Awards Committee (PBAC). Officials at the municipal hall say that these groups do not have the skills to engage in PBAC oversight functions. 3.1.3 Political Dimension The formal political system makes locally elected officials directly accountable to their constituencies and gives citizens the means for exacting accountability through mechanisms of direct democracy. Extensive local elections from the barangay to the province enable citizens to hold elected officials accountable for their choices and actions through the power of the vote. The current electoral system involves the direct elections of not only all elective national offices of the presidential-bicameral government, but also all elective local government offices. In general, local government in the Philippines is composed of three levels, each of which is autonomous (although central government institutions exercise some degree of supervision in terms of budgeting and legislation): (1) provinces and independent cities; (2) municipalities and component cities; and (3) barangays. Each LGU level is headed by an elected chief executive (governor, mayor, barangay captain) and has an elected legislative body/Sanggunian (vice governor/vice-mayor and council members). All local government officials are elected every three years with three-term limits, except for barangay officials, who are elected every five years. The Political Culture of Patronage The promise of accountability embedded in the decentralized representative system and institutions of direct democracy is stymied by anti-democratic forces. These are best understood in the historical basis of institutions and the nature of politics. The electoral system predates the enactment of the LGC and has roots more than a century old in the American colonial project of self-government that had two distinct characteristics: (i) the early consolidation of decentralized patterns of power resulting from elections at the municipal and provincial levels pre-dating national legislature elections by almost 10 years; and (ii) the inability to establish strong central administrative controls to discipline the emergent decentralized patterns of power, resulting in decentralized electoral politics pre-dating 14 bureaucratic formation and presaging the weakened capacity of central structures to oversee the decentralization process (Hutchcroft 2003). The timing, phasing and structural design of colonial electoral politics left indelible imprints on the character of the Philippine polity, particularly explaining the entrenchment of local political elites—especially those who are able to develop strong links with central powers. Sidel and Hedman (2001) contend that the historical roots of the Philippine state facilitated the emergence of local bosses who have used their power and discretion over state resources to maximize opportunities for private capital accumulation. The early consolidation of local political power pre-figures what Sidel and Hedman (2001) describe as “a pattern of political competition in which local, particularistic, patronage-based concerns and networks would serve as the building blocks of electoral competition.” Hutchcroft (2001) argues that national electoral politics works through patron-client networks from barangay village leaders to municipal mayors, provincial governors, congressmen and the president. In these networks, central-local relations are marked by the delivery of local votes in exchange for clientelistic largesse once state power is secured by the elite. These networks took the place of political parties as the electoral-organizational base, and the place of policy platforms as the currency for political exchange. This tends to systematically weaken political accountability: by narrowing the range of constituents to whom politicians are responsive and creating disincentives for groups to develop collective forms of representation, thereby further weakening interest group competition (Campos and Hellman 2005). The discretionary powers of the president are mirrored in the powers held by the local chief executives. Governors and mayors likewise hold the power to suspend mayors and barangay captains, respectively, directly under their jurisdiction. Like the president, they also have significant powers to appoint the local bureaucracy. For example, in both case study municipalities, although elections take place regularly, they struggle against the worst aspects of traditional politics including political contests centered on a limited number of families and votebuying during elections. In both areas, politics is still largely personality-driven. Accountability is not part of election season discourse. In the most recent elections, interviews with community members in both municipalities indicate there was vote-buying. In this context, political parties are nothing more than election machines necessary for mobilizing resources for the election campaign. In exchange for providing the local machinery that will ensure that votes for national candidates are delivered, those aligned with parties in power are given easy access to discretionary central transfers. Links with the congressman and provincial governor are the main conduits for these transfers. At the national level, strong executive powers tend to foster loyalty of local officials to central powers. Two aspects of executive privilege underpin the strength of an incumbent president’s hold on local elected leaders. First, the LGC mandates the president with the power to issue administrative suspension orders on governors and mayors of component cities based on loosely worded grounds including “disloyalty to the constitution”, “dishonesty, oppression, misconduct in office, gross negligence and dereliction of duty” and “moral turpitude and abuse of authority.” Second, the president’s control over government finances is extensive. Of particular importance is the fact that releases of congressional insertions into the national 15 budget—including discretionary pork barrel funds allocated to members of the legislative branch—need the authority of the president to be disbursed. Such powers of the president explain why, soon after every presidential election, members of opposition parties gravitate to the party of the President (Rocamora 1998:4). The case studies offer interesting snapshots of how pork barrel politics operate. This study finds that the political alignment with the provincial and national government proved crucial in obtaining resources for the municipality, with the more enabled municipality doing a better job than the constrained one. Pilar has benefited from the strong links between the provincial governor and the President. The governor is the head of the highly influential Union of Local Authorities in the Philippines (ULAP) which supported the President when she was threatened with impeachment in 2006. The mayor of Pilar is known as an ally of the governor and is said to be part of the group of mayors who strongly supported the governor during the election. In contrast, the provincial governor in Pio Duran aligned with the incumbent mayor lost his re-election bid in 2007. The incumbent governor was the district congressman and belongs to a different party, and at the time he was congressman, Pio Duran notably received less discretionary congressional funds (i.e. PDAF and DPWH transfers) than the other municipalities in the district, a fact that highlights the latitude of political discretion for this type of central transfer. It is unclear how this will play out in terms of provincial transfers now that the mayor belongs to a different party than the governor. 3.2 Demand-side Conditions On the demand-side, the strength of the Philippine institutional environment is the constitutional provisions for the exercise of voice, negotiation and oversight by civil society in local governance processes. However, the opportunities for fostering downward accountability are mitigated by persistent, localized threats to associational autonomy and press freedom, the de facto lack of access to public information, and weak technical capacities of civil society. As with the discussion on supply-side conditions, this section first highlights the opportunities afforded by the legal framework and then itemizes the political and technical constraints. 3.2.1 Association Strong constitutional provisions for the right of association and the undemanding requirements for registering associations anchor a robust legal framework for civil society organizing, necessary for fostering downward accountability. The legal framework for associational autonomy is enshrined in 1987 Constitution (see Box 1 for details) and provides the context for the blossoming of civil society since the ouster of President Ferdinand Marcos in 1986. Principles enshrined in this constitution reflect the changing circumstances that civil society actors face in the transition from authoritarianism to democracy. Box 1. Constitutional Provisions Ensuring Rights of Association, Voice and Access to Information The 1987 Constitution articulates a fully-elaborated framework for the recognition of associational autonomy and the role of civil society in a democratic society, the public’s right to information, and the exercise of voice through the enrichment of representative structures of direct democracy. Among the 16 salient features of the 1987 Constitution are the following: Article II, on state principles and policies, enables the exercise of voice, associational autonomy and access to information. It guarantees full respect for human rights; recognizes the role of youth and women in nation-building; affirms labor as a primary social economic force and guarantees protection of their rights and welfare; recognizes and promotes the rights of indigenous peoples; encourages nongovernmental, community-based and sectoral organizations that promote national welfare; ensures the autonomy of local government; and guarantees to adopt and implement a policy of full public disclosure of transactions involving the public interest. Article III, the bill of rights, recognizes the right of people to information on matters of pubic concern, to form unions and associations, and guarantees that no person shall be persecuted on account of his political beliefs. Article VI, on the legislative department, specifies that legislative power is not solely vested in Congress, but also in “the people” through the provisions on initiative and referendum. Article X, on local government, not only instructs Congress to enact a local government code, but also articulates provisions for direct democracy mechanisms and enhancements to the representative system. It provides that the decentralized local government structure should include mechanisms for recall, initiative and referendum. It mandates a law that will enable the creation of local legislative bodies with sectoral representation. The article also instructs the President to constitute regional development councils— composed of local government officials, regional heads of departments and other government offices, and representatives from NGOs in the regions—to achieve administrative decentralization to strengthen the autonomy of LGUs, and to accelerate the economic and social development of regional units. Article XII, on social justice and human rights, has a subsection devoted to the role and rights of peoples’ organizations as vehicles for the citizenry to pursue and protect collective interests through peaceful and lawful means. It also recognizes their participation in decision-making and guarantees that the State will facilitate the establishment of consultative mechanisms. Brillantes (in Hutchcroft 2003:18) attributes the explosive growth of NGO activity in the late Marcos years, continuing into the post-Marcos years, to the 1987 Constitution and the “antiauthoritarian instincts of the Aquino administration which encouraged the bias for NGOs.” In 1986, more than 27,000 NGOs were registered with the Security and Exchange Commission. This number doubled to 50,800 in 1992 and to an estimated 95,000 by 2003, with 7,000 NGOs at the grassroots level. However, the failure of the state to establish the rule of law and continuing threats to associational autonomy limit the capacity and opportunity for civil society to play its role effectively. For example, unresolved cases of illegal detention and torture, abductions and killings of community leaders, mostly occur outside Metro Manila and in regions where government forces are engaged in conflict with armed opposition groups. Such cases tend to create an atmosphere of fear. This partly explains the concentration of NGOs in Metro Manila and other more progressive urban centers in the country. For example, DILG officials observe that the implementation of the NGO accreditation process is hindered by the limited presence of CSOs, especially in some remote rural areas. 17 Philip Alston—Special Rapporteur on extrajudicial, summary or arbitrary executions— conducted a February 2007 review of the Philippine situation covering the previous six years. He indicates that the majority of the cases were perpetrated by state agents. Alston is hesitant to state the number of these illegal executions, ranging from 100 to 800 in the past six years, as statistical sources are understandably unreliable and scarce. But the preliminary report finds the government response deficient. Context-specific factors explain why the environment for association seems more conducive in Pilar than in Pio Duran. The rough terrain in Pio Duran makes community organizing more difficult and tends to isolate barangays from one another. The presence of insurgent groups also complicates organizing in Pio Duran. The insurgency has been more successfully suppressed in Pilar, where the last of the skirmishes was in the late 1990s. The province-wide anti-insurgency drive, centered on facilitating the inflow of development funds from foreign donors and central agencies, has proven successful in Pilar. In contrast, in Pio Duran, the mayor was ambushed in 2007, and there is speculation that insurgents may have been involved. Some community members are wary that any initiative to organize might be misconstrued as support of insurgents. As a result, it is church-based groups that have the most extensive networks in both municipalities. In Pilar, longer experience in implementing donor-assisted projects facilitates positive interaction between the municipal government, barangays and CBOs. In Pilar, the municipality is already following the NGO accreditation process prescribed by the DILG, something that is yet to be done in Pio Duran. The relationship between the government and civil society has evolved to the point that the mayor allocates a portion of his office’s budget to farmers and women’s organizations. The MPDO says that the local government sees peoples’ organizations as extension workers and the assistance ensures that the organizations are able to develop their action plans for the implementation of LGU programs. 3.2.2 Access to Information Although the Philippines has fully-fleshed out constitutional provisions for the right to information, the absence of a right to information act has meant that the legal framework to this right is provided by other means. First, the Code of Conduct and Ethical Standards for Public Officials and Employees mandates that all public officials provide information on their policies and procedures. It ensures openness of information unless otherwise provided by law and when required by the public interest. This law (RA 6713) specifies the date by which annual performance reports are to be released and public requests are to be acted upon, requires that public documents be readily accessible for inspection by the public, and obligates public officials (except honorary, casual and temporary employees) to report (within specified time frames) notarized declarations of their assets, liabilities and net worth along with the business and financial interests of their spouses and children under 18 living with them and to make related documents available to the public. Second, the Supreme Court makes rulings on what constitutes information that are public in nature. Supreme Court rulings in favor of the disclosure of party list nominees and against 18 provisions in Executive Order 464 that prohibit executive branch officials from appearing before legislative-sponsored hearings without the prior consent of their superiors are seen as supporting the constitutional right to information. Third, administrative orders classify documents as public or instruct public agencies on ways to disclose public information. President Corazon Aquino, for example, issued an executive order that ordered the publication of all laws in general circulation newspapers in 1986. In 1993, President Fidel Ramos issued an executive order requiring national government agencies to adopt procedures that they can follow in response to public requests for information. Finally, the 1991 LGC contains important provisions that compel local government to provide information to the public. It requires posting notices in “conspicuous” places in the locality of publication in local newspapers (see Box 2 for the specific provisions). Box 2. Local Government Code Provisions on Access to Information The 1991 Local Government Code contains important provisions that compel local government to provide information to the public through posting notices in conspicuous places such as publication in local newspapers. These provisions include the following: Section 37c mandates posting all minutes of all meetings of the local PBAC in “a prominent place”. Section 59 requires the posting of all ordinances and resolution “on a bulletin board at the entrance of the provincial capital or city, municipal or Barangay hall, as the case may be and in at least two other conspicuous places in the local government unit.” This section further provides that the text of the ordinance or resolution should be disseminated in Filipino or English and the dialect or language understood by majority of the local population. It also requires that ordinances with penal sanctions shall be published in a general circulation newspaper within the relevant province, while the gist and main features of ordinances or resolutions enacted in highly urbanized cities shall be published in a general circulation newspaper. Section 188 requires the publication of tax ordinances and revenue measures within ten days of approval either in a local newspaper or at least two conspicuous public places. Section 316 mandates the Local Finance Committee to conduct a semi-annual review of costs and achievements against performance standards applied in undertaking development projects. A copy of this report is to be posted in conspicuous and publicly accessible places in the barangay. Section 352 requires local treasurers, accountants, budget officers and other accountable officers to post in three publicly accessible and conspicuous places, within thirty days of the end of each fiscal year, a summary of all revenues collected and funds received, including the appropriation and disbursement of these funds. Section 363 requires the publication of calls for bids in at least three publicly accessible and conspicuous places in the barangay, and their circulation, to any known prospective participant in the bidding process. It requires that the results of the bidding process be similarly published. Section 513 specifies sanctions for the failure by the local treasurer or the local chief accountant to post in prominent places in the main office building of the local government concerned or, where available, in a general circulation newspaper, itemized monthly collections and disbursements. 19 Advocates for freedom of information find this framework insufficient. The absence of right to information legislation, along with public attitudes about demanding information, serves as a constraint for the full elaboration of the right of access to information, and diminishes the space for nurturing accountability. First, the right to information is not absolute and is subject to the interpretation of what constitutes information that is of public concern. It is also subject to record custodians’ decisions to define “reasonable regulation of access.” There are various other restrictions including access to information that would impinge on the right to privacy (for example, birth and adoption records), legislative proceedings on matters of national security, court documents related to witness protection, and trade secrets. All bank deposits and investments in government bonds are confidential except in cases of impeachment or upon order of a competent court in cases of bribery or dereliction of duty by public officials. Aspects of the investigation of civil servants are shrouded in secrecy. For example, the Office of the Ombudsman can determine which cases may not be made public (Chua 2003:130-132). To make the right to information less discretionary and more predictable, the NGO Access to Information Network (ATIN) opines that legislation is required to clarify exemptions to the right to information. It finds the recourse of going to court to compel access problematic, especially in cases where media requests for information may be irrelevant by the time the courts order its release (CMFR 2006: 27). Second, compliance with LGC provisions compelling local governments to publicly post relevant information is not strictly monitored. For example, in the case study sites, annual budgets were not posted in conspicuous sites. In both municipalities, key municipal information like the municipal budget, procurement activities and development plans are not systematically distributed. Instead, informal sources are the important sources of information (e.g., relatives or neighbors working in the municipality, as well as barangay officials). The only significant difference, aside from the relatively regular barangay assemblies in Pilar, is that Pilar at least has a public information officer (PIO). However, this official also holds other functions, making it impossible to fulfill his functions as the PIO. When asked how he performs his PIO functions, he says it is primarily through attending barangay assemblies. Barangay Assemblies are proving to be an important node for consultation and local government reporting—more in Pilar, where they are relatively more regularized, than in Pio Duran. But the communication seems to be one-way. There is no evidence that these meetings are being used as a means of providing feedback on local government action. The larger problem is the absence of a cultural predisposition for the right to information. Advocacy remains limited to the media and organized groups. The problem of ordinary citizens, for example, is as basic as access to official personal documents and the prevailing culture is that they are not entitled to such access. Meanwhile, the default attitude of public officials is also not predisposed to ease of access, although internet-based information systems have made some headway in modernizing the infrastructure for public information. 20 3.2.3 Voice, Negotiation and Oversight As with associational autonomy, the Philippines has a fully elaborated legal framework for the establishment of institutions of direct democracy and enhancements to representative institutions. This framework includes: the constitutional guarantee of freedom from persecution based on political beliefs and freedom of expression enshrined in a Bill of Rights (see Box 1 for the relevant constitutional provisions); the granting of legislative powers to citizens through LGC provisions for referendum, initiative and recall and a separate law called the Referendum and Initiative Act (RA 6735) (see Box 3 for details); and the establishment of a party list system and local sectoral representation (see Box 4 for a summary of the relevant legal provisions). Box 3. Legislation on Mechanisms of Direct Democracy: Referendum, Initiative and Recall Referendum and initiative. RA 6735 was passed in 1989 and allows people to: (i) initiate proposals to amend the constitution or to enact or amend laws through an election called for that purpose, (ii) approve or reject legislation through an election called for that purpose, and (iii) exercise “indirect initiative” whereby accredited peoples’ organizations may file a petition, which will take precedence over all other pending legislative measures before the committee, that is, the bill will be prioritized although the people may not take part in legislative debates on the bill. Chapter II, sections 120 to 127 of the LGC, also enable direct legislation. Citizens can exercise an initiative (by 1000 registered voters in provinces and cities, 100 in municipalities, or 50 in barangays) by filing a petition with the local Sanggunian (legislature) proposing adoption, enactment, repeal or amendment of an ordinance. Registered voters may also directly approve, amend or reject any ordinance enacted by the Sanggunian through a local referendum, which the LGC mandates shall be held under the control and direction of the Commission on Elections (COMELEC) within 60 days in provinces and cities, 45 days in municipalities and 30 days in barangays. Recall. Chapter 5, Sections 69 to 75 of the 1991 LGC, provide the means for the people to terminate tenure by popular vote through two modes of recall: (i) recall initiated by registered voters through a petition signed by at least 25 percent of the voters and filed with COMELEC; and (ii) recall initiated through a Preparatory Recall Assembly (PRA), comprised of elective officials in a given locality, with the majority of the PRA adopting a resolution for the recall of provincial, city or municipal officials. Box 4. Legislation Enhancing Representative Institutions Party list system. The Party List System Act (RA 7941), enacted in 1995, enables a system of proportional representation, whereby parties who garner at least 2 percent of the total votes cast obtain one seat in the House of Representatives. The law enables citizens belonging to underrepresented sectors, organizations and parties—who lack the well-defined constituencies that district representatives have—to obtain seats in Congress, 20 percent of which are mandated by party list representatives. Local sectoral representation. The LGC provides for local sectoral representation in the Sanggunian at all local levels of government, where three seats are reserved for representatives of marginal sectors: one for women, one for labor and the third from a sector to be determined by the Sanggunian. 21 The exercise of voice, negotiation and oversight is encouraged at the local level by LGC provisions of that LGC that mandate the formation of local special bodies with significant civil society representation and responsible for formulating policy recommendations, devising developmental and sectoral plans and proposing measures that will guide the Sanggunian (see Box 5 for details). On paper, the required participation of civil society formations in these bodies enables these groups to influence the direction of capital investments at the local level, multiyear development plans, the way in which schools are managed, and the shape of local policies in health and peace and security. It also guarantees the exercise of civil society oversight in local government procurement. Despite these measures, institutions of direct democracy are unable to countervene the weaknesses of the representative system either because they are operationally toothless or have been mainly used by entrenched political interests to advance their own interests. Box 5. LGC-Mandated Local Special Bodies The LGC mandates the formation of local special bodies—which formulate policy recommendations, devise development and sectoral plans, and propose measures that will guide the Sanggunian—with provisions for significant civil society representation. They include, but are not limited to the following: Local Health Board. The local health board proposes budgetary allocations for health programs to the Sanggunian, serves as an advisory committee, and sets technical and administrative standards for health. One seat on the board is allocated to a health NGO or private sector representative. Local School Board. The local school board is an advisory committee on educational matters, determines the supplementary budget for school maintenance, and authorizes disbursement of that budget. Three representatives from NGOs or the private sector sit on the board—one from the local parents-teachers association, one from the local teachers’ organization, and one from the organization of public school non-academic personnel. Local Peace and Order Council (POC). The POC assesses the peace and order situation, and formulates, monitors, and implements plans and programs to improve peace, order and public safety. Three representatives of the private sector—representing academic, civic, religious, youth, labor, legal, business and media organizations—are appointed by the chairman of the board in consultation with POC members. Local Pre-Qualification Bids and Awards Committee. This committee decides on bids and awards for local infrastructure projects, although its jurisdiction does not include procurement of supplies, office equipment, renovations, or other local government expenditures. Two NGO and PO representatives seated on the Local Development Council (LDC) also sit on this committee. The committee also includes a certified public accountant from the private sector designated by the local chapter of the Philippine Institute of Certified Public Accountants. Local Development Council. The LDC initiates and proposes a comprehensive multi-sector five-year development plan to be approved by the Sanggunian, formulates public investment programs and incentives to promote the inflow of investment capital, and coordinates, monitors and evaluates the implementation of development programs and projects. The LDC may also form sectoral or functional committees to assist them. No less than 25 percent of the LDC is to be constituted by accredited NGOs, peoples’ organizations or private sector representatives. 22 Three attempts at implementing initiatives at the national level have failed. The first was the People’s Agrarian Reform Law. The second was an attempt to initiate constitutional change in 1997. The Supreme Court ruled against the petition on the grounds that RA 6735 did not allow constitutional change through peoples initiatives, no budgetary provisions were appropriated by Congress for the initiative, and the petition was for a revision and not an amendment of the Constitution. The third attempt was an effort to change the Constitution in 2006. In this case, the Supreme Court again ruled against the petitioners saying that the initiative was void and unconstitutional because “an initiative that gathers signatures from the people without first showing to the people the full text of the proposed amendments is most likely a deception, and can operate as a gigantic fraud on the people (Salazar 2006).” Of these attempts, the last two were widely perceived as attempts by incumbent administrations to take advantage of the law to push their own interest, staying in power. Romero (in Iszatt 2004) finds that there has also been no progress at the local level in terms of referendum and recall. He finds the implementing procedures cumbersome and initiatives taken in the name of people, NGOs and POs are not genuine. Iszatt (2002) observes that legislation for recall has not been used mainly by NGOs and POs, but is concerned that the provision may be abused by local particularistic interests because of the loose grounds on which a recall may be initiated and the relative ease of manipulating the process because of the PRA provision which is not direct recall in the strictest sense. Operational problems plague the party list system and local sectoral representation. These include: (i) low voter awareness of the system (in 2004, only 23 percent of the voters cast a ballot for the party list system); (ii) problems with the mathematical allocation of seats, which make it impossible for party list representatives to fill the 20 percent membership quota; and (iii) the use of the system by entrenched traditional political groups, most pronounced in the 2007 elections when the administration is said to have fielded parties that represent marginalized groups in name only but whose representatives have direct links with the administration or are their relatives. No enabling law has been passed to enact local sector representation despite active lobbying by NGO networks like the Local Governance Policy Forum (LGPF) and Taskforce LSR and because of the lack of political will by national government executive and legislative bodies. A number of studies reveal the operational difficulties of establishing local special bodies. For example, Azfar et al. (2000) estimate that only 30-50 percent of local governments have local development councils in place and less than one-third of local governments had development plans with meaningful civil society participation (GOLD 2002 in World Bank, 2004:29). Gabito (2001) estimates that only 56 percent of local special bodies has been convened and that 33 percent of CSO representatives were either appointed or selected by the local chief executive. A DILG study found that LDCs have many operational problems. After reviewing people’s participation in LDCs, it found: (i) NGO representatives constitute a minority in the council, diluting their power in the executive committee; (ii) the council has too many members and members often lack technical expertise; (iii) political interference in the accreditation process, poor turnout of NGOs, few NGO networks, and poor representation of marginalized groups; (iv) lack of LDC member awareness of their functions, poorly developed project monitoring and 23 investment promotion functions, and inability to integrate sectoral issues; (v) no fundraising by LDCs and inadequate funds for proposed activities; and (vi) no prescribed procedures, poor attendance of NGOs, and lack of a quorum. DILG officials indicate that among local special bodies, only LDCs and local school boards tend to operate at the municipal level. Local special bodies are operational because they have a budget. They decide on the use of the Special Education Fund (SEF) generated by a 1 percent tax on real property. LDCs are convened to pass the AIP, necessary to obtain the IRA. In the case study sites, local special bodies mandated by the LGC are far from fully activated. In Pilar, institutional spaces for citizens’ participation are relatively more developed, particularly the LDC and the Local School Board. CSOs, identified through the accreditation process take part in LDC meetings although their participation is more consultative than decisive. Aside from the LDC, the most active local special body with civil society participation is the Local School Board, where CSO participation is through the Parent-Teachers Association. As in the LDC, the quality of participation seems questionable as well. In an interview with community members of one barangay, the allocation of the Special Education Fund (SEF) in Pilar is said to have been concentrated in educational facilities close to the municipal center, therefore raising doubts about whether CSO representation in the SEF is making a difference in terms of reducing elite capture. Besides the LDC and the Local School Board, no other special body seems to be operational and the government has no stated plans to activate any of these. In Pio Duran, none of the Local Special Bodies seem to be operational at either the municipal or the barangay level. The minutes of the 2006 LDC reveal that civil society organizations were not represented, a fact confirmed by community interviews. Even where institutional spaces are at least opened up to citizens’ participation, their role as social accountability mechanisms remains relatively weak. Their relative ineffectiveness as social accountability fora is a function of the weakness of community voice and the contrasting strength of executive power in these spaces. The absence of meaningful CSO participation in LDCs and other LSBs can be seen as both the cause and effect of weak access to municipal government information. Because CSO participation in LSBs is mainly consultative, incentives for understanding the budget are weakened. CSO participation is ineffective and demand for opening up these spaces is weak because of poor understanding of government information. In both municipalities, civil society’s capacity for both negotiation and oversight is uniformly weak and limited. There are no meaningful spaces, beyond those offered by CDD project operations, for the exercise of either function. For example, there is no participation of NGOs or POs in Pre-Qualification Bids and Awards Committees (PBAC). As a result, relevant skills are still in the process of being developed. With both the budget and procurement processes remaining closed, CSOs have no institutional hooks to latch on to. Weak oversight is also due to CSO priorities. In Pilar, the development of capacity for voice beyond preference articulation is limited by the nature of relations between the municipal government and CBOs—i.e., the latter view themselves as beneficiaries of government- 24 sponsored projects. This weakens their monitoring and evaluation of government performance because CBOs are worried that performing oversight functions might threaten their access to municipal resources. CSOs in Pilar have not performed oversight functions because they are still focused on project implementation. Given their vested interests, CSOs lack the impartiality necessary to be effective at oversight. Political constraints tell only half the story; the other half is the capacity constraints of civil society groups. This is most telling in the case study sites where civil society organizing is just beginning. While NGOs have built up considerable capacity on a wide range of development issues (e.g., microfinance, gender and development; community work, and corporate social responsibility), their capacity in engaging in more technical aspects of governance is weaker. This partly reflects a lack of space offered by national government agencies in engaging in constructive dialog with CSOs but it also reflects a challenge that the NGO movement faces in terms of (a) developing the necessary technical capacities to actively participate in key functions of government such as national budget scrutiny or the public procurement process; and (b) moving beyond the significant historical experience of being part of the political opposition movement (Annex 8 provides some examples of NGO work in this area). There is no community or CSO participation in procurement due to lack of capacity. At the municipal level, the Bids and Awards Committee (BAC) is composed of local government personnel. The BAC invited provincial representatives but none responded. The MPDO believes that there are no CSOs in Pio Duran who have the capacity to participate effectively in BAC activities. There are no BACs in any of the barangays in Pio Duran. The difficulty of developing civil society capacity for social accountability is intimately linked with problems related to municipal government information. Because participation in activated bodies is consultative rather than decisive, incentives for understanding the budget is weakened. But it is also because understanding of government information and processes is weak, that CSO participation in these spaces is ineffective and partly explains weak demand for the further opening up of these spaces. 25 4. Accountable Local Governance and CDD Operations CDD interventions at the local level are both limited by, but also helping change, local governance conditions. This study finds that supply-side conditions for local governance and accountability affect CDD operations in two distinct ways: first, by compromising the environment for making local service delivery work for the poor; and second, constraining the possibilities of sustaining the participatory governance innovations introduced by CDD operations. Meanwhile, demand side-conditions for local governance affect CDD operations the same way that supply-side conditions do: by imposing limits on the possibilities for sustainability and institutionalization of governance reforms introduced by CDD and by imposing constraints on CDD processes and project implementation. The first half of this section elaborates these themes. The second half of this section is concerned with how CDD interventions are helping promote accountability and good local governance. CDD projects embody social technologies for delivering local public goods that bring together local governments and communities in coproduction and co-financing arrangements. Thus, they do not just provide local governments with the means to deliver public goods but also introduce them to new norms in the delivery of these goods—norms that give priority to the voice and participation of communities in all stages of project implementation. How effectively such norms have influenced conditions for local governance and accountability is explored in the last part of this section (see Annex 6 for a table summarizing local governance conditions and their interactions with CDD operations). 4.1 Impact of Local Governance Conditions on CDD Operations The two supply-side local governance conditions that have a direct impact on CDD operations are tight fiscal conditions and unchecked executive powers. On the demand side, conditions related to voice and association—particularly the technical and political capacity of civil society—is proving to have a considerable impact on CDD operations. 4.1.1 The Impact of Supply-side Conditions Tight Fiscal Conditions Tight fiscal conditions—characterized by a dependence on unconditional central transfers and limited capacity for capital expenditures—constrain local government capacity to raise counterpart funds and, more broadly, to align local budgets with the demands of the poor. In Pio Duran, the KCP counterpart is financed by re-allocations of the budget: in 2006, by expropriating a portion of the Calamity Fund; and in 2007, by utilizing unused balances of the previous fiscal year. This means that counterpart funds effectively compete with other potential uses of scarce municipal resources. This is not necessarily bad because these counterpart municipal funds are at least used for financing public services expressly chosen by barangays. But the use of the Calamity Fund as counterpart funds, for example, is problematic in a place like Pio Duran where natural calamities are frequent. 26 The limited control of municipal governments over discretionary central transfers and the constrained capacity to generate own resource revenues weaken the incentives for citizens' participation in governance. This could very well be the most serious challenge to instituting voice and participatory project management mechanisms beyond CDD operations and into local governance processes. While CDD project funds facilitate the mobilization of communities for barangay assemblies and the establishment of community-level participatory management, monitoring and oversight structures, the tight municipal fiscal space put municipal and barangay funds largely beyond community control. For example, this is probably why there is no evidence that CDD operations are leading to the activation of local special bodies with meaningful CSO participation. In turn, with no municipal processes or bodies to latch on to, innovations in project implementation and governance introduced by CDD operations remain in a “project bubble” and are unable to influence local governance practice as verified by CDD project staff in both case study sites. Parallel governance structures for CDD sub-project identification, implementation, monitoring and procurement are not easily mainstreamed into local governance praxis. The constrained fiscal space also poses difficulties on the possibilities for operating, maintaining and expanding services initially delivered with CDD project support. In the case study sites, this is evident for livelihood training centers established with KCP support. Neither the municipal government nor the relevant barangay government officials were able to answer how the facilities will be maintained—or indeed if a market study has been made relevant to the livelihood projects being envisioned—once KCP funds end. Pilar’s innovations in dealing with tight fiscal conditions have important consequences for CDD operations. In particular, it has coped with tight fiscal conditions by leveraging its investment capacity through the promotion of cost sharing arrangements with barangays, the congressman, the governor, and international donor agencies. The practice of cost sharing was introduced only recently through ODA-funded projects in agrarian reform but has since been regularized and extended to health programs, a partnership with a local NGO and the WB-assisted CDD projects. This is as an example of how the constraints imposed by macro-level institutional environment can be overcome through local innovation. The cost sharing scheme is operationalized in KCP operations through a covenant between the municipality and the barangays. To provide incentives for barangays to raise counterpart funds, the covenant guarantees that the municipal government will match the barangay counterpart and involves an agreement among barangays that each will have a share of KCP funds in at least one of the three cycles of the program. Box 6 describes how the use of counterpart funds in Pilar has greatly enabled the municipal government to overcome its limited fiscal space. On one hand, this scheme has the unfortunate effect of undermining the CDD principle of giving priority to the barangays that need the resources most. The covenant apportions KCP funds to all barangays, diluting the power of inter-barangay negotiations at the municipal interbarangay forum (MIBF) to determine priorities at the municipal level. Such a scheme may well be a necessary intermediate step to make the enactment of community prioritization processes feasible. It demonstrates municipal commitment to opening up decision-making processes and 27 heightens the stakes for participation and co-production in Pilar. The emergence of “lower equilibrium” solutions—such as the cost sharing scheme—needs to better documented and understood as they provide insights into what is feasible in terms of participatory governance given the nature of constraints imposed by tight local fiscal conditions in the Philippines. Box 6. Leveraging Local Resources: Cost Sharing in the LGU Economic Development Fund (EDF) in Pilar, Bohol In a typical rural municipality in the Philippines, such as Pilar, financing for development projects is dominated by the EDF which is 20 percent of the IRA. In Pilar, this amounts to an annual allocation of PhP 6 million. This is divided among 21 barangays with a population of about 25,000. With more than 50 percent of its barangays listed as a “high deprivation” areas (based on the Local Poverty Reduction Action Plan 2005 survey), Pilar’s challenge is to address the severe poverty of the majority of its population which had made Pilar a fertile ground for insurgents. Pilar has been a recipient of projects from the Agrarian Reform Support Program (ARSP), Belgian Integrated Agrarian Reform Support Program (BIARSP), and Philippine-Australia Technical Support on Agrarian Reform and Rural Development (PATSARRD), which provide cost-sharing among communities, barangays, the LGU, the provincial government, and PDAF from the Congressman. By allocating its limited EDF to various development programs involving partnerships with NGOs, other government agencies and foreign-donors, Pilar has been able to increase its financing for development projects. Cost sharing is an innovation in implementing the KCP in Pilar. A covenant, signed by municipal and barangay governments in June 2006, automatically appropriates a portion of the LGU and barangay EDF as the counterpart for KC-prioritized projects for a period of three years. The covenant aims to mobilize resources from the LGU and all 21 barangays in Pilar to raise the counterpart funds for the KCP through the creation of a municipal trust fund. The covenant calls for equal contributions of PhP 75,000 from each barangay to be deposited in the trust fund, with a commitment from the municipality of PhP 150,000 for the first prioritized project for every barangay. The covenant led the Pilar municipal government to generate PhP 2 million a year from 2006 to 2008 in KCP funds that were invested in community-prioritized subprojects. This was equal to one-third of the total EDF. This can be considered a good practice of leveraging LGU funds with donor funds in projects that are contributing to better government processes and responsiveness. Cost sharing has the potential to develop a multi-stakeholder approach to development programs beyond financing. Executive Branch Dominance A strong executive branch in the context of a political culture steeped in the practice of patronage and prior development of administrative structures of horizontal accountability poses specific difficulties for various aspects of project operations. Where the environment for local governance is constrained, as in Pio Duran, this may be reflected in the powerful role the mayor plays in inter-barangay planning and CDD project decision-making processes, even if on paper, this role is merely to convene these processes. This creates perceptions that processes like the MIBF are politicized. More seriously, this flags the dangers of local elite capture that serve to undermine the redistributive goals of CDD operations. 28 Another issue that serves to highlight this point is the practice in both case study sites of recruiting underqualified casual employees through a hiring process that is mostly based on the mayor’s prerogatives. This not only undermines the accountability lines of the bureaucracy but also the quality of CDD engagement with local government processes. For example, exposure to training programs in budgeting, planning and procurement—sponsored by CDD projects—is understandably limited to a small set of permanent municipal employees. This concentrates acquired skills in a small section of the bureaucracy with most staff remaining untrained and unexposed to opportunities for skills enhancements. This undermines the overall quality of local service delivery. 4.1.2 The Impact of Demand-side Conditions Weak Association and Voice There is little awareness about local government action, processes and decisions, partly due to limited access to public information. Project design should include community education on the relationship between project processes and local government processes and the governance implications of new approaches to the delivery of local public goods. Even in the relatively enabled environment of Pilar, no clear links have been established between operational Local Special Bodies at the municipal level with CDD project structures. LDC processes could be easily linked to MIBF processes, while the Local School Board could be linked to operations and maintenance committees in barangays with school subprojects. That link seems to be missing. Where local conditions hinder voice and association, as in Pio Duran, CDD operations face credibility challenges. For example, in the relatively remote village of Barangay Panganiram, a community which has failed to have its community proposals for KCP funding approved in all three cycles and has not been regularly visited by elected municipal officials, community members feel that the MIBF and its rules are stacked against them and are dominated by more powerful barangays. Such barangays typically adopt a wait-and-see attitude and have to be convinced that participation in CDD processes will lead to immediate changes. This also probably explains why KCP facilitators in Pio Duran admit difficulty in mobilizing community members to attend barangay assemblies in the early part of project implementation. The same problems were not encountered in the relatively enabled environment of Pilar, where previous LGU-community engagement was fostered by other donor-assisted development projects and basic trust had been established. The development of CBO capacity for voice beyond articulating preferences is limited by the relationship between CBOs and the municipal government. CBOs view themselves as beneficiaries of government projects. This belief seems to be mirrored by municipal level CSOs that take part in planning processes (like Municipal Development Council meetings) to lobby for government funds for their projects but express no interest in performing oversight functions. The Pilar-based NGO, ICRAFT, is the same. Lobbying for counterpart funding and getting their programs included in LGU programs is their main goal. According to the ICRAFT representative, CSOs in Pilar have not yet performed oversight functions because they are still 29 focused on project implementation and community empowerment (as if oversight is not part of community empowerment). The disjuncture between project and LGU processes at the barangay and municipal levels reflects the difficulty of institutionalizing these organizations and processes. The planning and prioritization process for KCP subprojects using the MIBF and participatory situational assessment (PSA) is parallel to the planning and budgeting process done using the MDP and AIP process at barangay and municipal levels. LGU and barangay officials recognize the benefits of participatory approaches in animating engagement between government and communities and in facilitating joint decision-making. However, the short-term view of project structures and processes prevails and its adoption in local governance is very limited. There is no CSO participation in the municipal BAC. The BACs are not organized and decisions remain limited to barangay captains. The absence of a culture of public debate and consensus-building fosters competitive behavior among barangays. For example, in Pio Duran, this sense of competition fostered selfinterested behavior in the selection of sub-projects. Community volunteers and barangay officials in an upland barangay admitted to using this strategy in the first two cycles of the KCP. They gave high scores to neighboring, contiguous barangays and admitted that they were not voting based on the appropriate criteria. This explains why, for the first two cycles, projects seemed to cluster around contiguous upland barangays and barangays near the municipal center. In turn, this was detrimental to remote, isolated barangays who did not have the same allies as clustered barangays. In Pilar, this problem was addressed by the cost sharing covenant, which eliminated the need for inter-barangay negotiations as all barangays were assured of a project. 4.2. Impact of CDD Operations on Local Governance Conditions The study finds that the impact of CDD operations on local governance conditions is contextspecific. In constrained local governance contexts, CDD operations provide a significant channel for the poor to access public goods and for communities to exercise voice and agency. However, it is unlikely that these innovations and reforms will be sustained or expanded beyond the CDD project life. In an enabled local governance context, CDD operations have the potential to influence local conditions beyond project parameters and in a much more fundamental way. This section closes by elaborating on changes brought about by CDD operations—some of which are common to the two contexts, some specific to the enabled context only. 4.2.1 The Impact on Supply-side Conditions Expanding Fiscal Space and Aligning Investments with Community Preferences The most immediate impact of CDD operations is the expansion of fiscal space. It enables cash-strapped municipalities to implement infrastructure projects they could not afford on their own. In both constrained and enabled municipalities, community members are quick to point out the various ways these infrastructure projects have improved their lives: farm-to-market roads that enable them to bring their produce to the commercial center, school buildings for children who used to study in dilapidated structures, communal water systems that finally provide 30 households with access to water—the list goes on. These projects do not have just welfare implications on households that benefit from them. The municipalities reap external benefits brought about by these projects including enhanced tax bases due to increased economic productivity, and help ease peace and order concerns as remote communities become more accessible and feel more included in development efforts. CDD operations, in that they encourage municipal and barangay cost sharing, also cause the alignment of a portion of the municipal budgets with community-identified priorities. To the extent that provincial funds and legislators’ allocations are tapped as KCP and ARCDP counterpart funds, these central transfers are effectively aligned with such priorities as well—an improvement from being based purely on political discretion. Pilar’s innovations in cost sharing show how discretionary central transfers, and significant portions of the barangay and municipal IRA, may be pooled and apportioned based on community demands. If discretionary central transfers could be channeled through such a mechanism, then a significant source of financing for capital spending will be brought closer to the control and priorities of municipalities. This is an example of a local innovation, spurred partly by CDD operations, that needs to be supported by national rules so that it could be institutionalized and mainstreamed. Increasing Participation and Accountability in Local Governance CDD operations create bridges between communities and municipal and barangay officials. Municipal department heads appreciate the effectiveness of CDD projects in mobilizing communities and barangay officials. CDD operations strengthen accountability links between municipal department heads and barangay officials through the MIBF. Municipal heads now value barangay officials’ inputs to MIBF meetings when they formulate their department plans. Through the ARCDP, the Office of the Municipal Agriculturist strengthened its links with community-based groups. CDD operations develop the administrative skills of municipal and barangay officials for inclusive and transparent local governance. For example, in Pio Duran, the revised MIBF process mobilizes the MPDO, the Municipal Social Welfare and Development Officer (MSWDO), the Municipal Engineer and the Municipal Health Officer (MHO) on a panel that ranks community proposals based on criteria collectively approved by the barangays. This exposes key municipal officials to a criteria-based prioritization process in a bureaucracy previously unexposed to bottom-up governance. The MPDO says that involvement in such processes increased the confidence of the local bureaucracy and spurred them to bid on other donor-assisted infrastructure projects. Barangay officials are also learning how to prioritize projects and undertake transparent procurement. CDD operations also contribute to the activation of barangay assemblies. In Pio Duran, KCP and ARCDP operations led to the convening of barangay assemblies—in some barangays for the first time. In Pilar, KCP operations have led to the regularization of barangay assemblies—in some of them, convened more than the twice-a-year required by the DILG. These assemblies have emerged as an important conduit for relaying municipal information to the communities. 31 In the enabled environment, CDD approaches to procurement have been transferred to LGU procedures and have increased transparency and accountability. In particular, La Suerte’s adoption of the KCP Bids and Awards Committee as its Barangay BAC is an interesting example of self-initiated institutionalization that deserves close observation. The La Suerte Barangay BAC involves not only the Barangay Captain, Treasurer and Barangay SB Appropriations Committee head, which is often the case, but also at least one community volunteer. This committee used the KCP procurement process for a street lighting project funded by cash transfers from the congressman (see Box 7 for details). Box 7. Strengthening Community Oversight through CDD Projects: The Case of La Suerte, Pilar Barangay La Suerte is an upland barangay in Pilar and ranks as the second most deprived barangay out of 21. It ranks fifth in the number of households living below the food poverty line (63 percent) and fifth in terms of households living below the income poverty line (73 percent). The participatory processes introduced through the KCP are transforming the relationship between the communities and barangay officials. Community-based associations among farmers, women and senior citizens have become active participants in analyzing community problems and identifying which projects in the village should be prioritized by the government. People enthusiastically refer to the new experience of participating in the BAC for KC projects. This new system requires that bids and awards for sub-project construction, such as waterworks or farm-tomarket roads, are done in public with the active participation of the community through representation on the project BAC. LGU and KCP staff provide guidance on BAC rules and processes to barangay officials and community representatives so that an informed decision can be made. Project BAC members learn to distinguish differences in material quality and costs, undertake monitoring, and manage the bidding process. The proposal for a farm-to-market road which was included in the barangay priority list was approved during the second cycle of the KCP. This project mobilized counterpart funding from the Congressman. This provided insights on the differences in pricing between national projects and community-led search processes. They realized that barangay-owned projects can be cheaper and prevent overpricing. Community members contrast this process to before when barangay officials made decisions on projects and allocation. They say that the KCP is different from other government projects. It has opened space for the poor to participate in barangay decision-making and enables them to get support for their projects. This participation gave them confidence in their discussions with government. The sense of empowerment of community representatives in the KCP BAC comes from greater knowledge and participation in project decision-making processes. The positive experience has paved the way for the adoption of the KCP BAC as the barangay BAC. Introducing the Discourse of Reform There are two ways that CDD operations have proved critical in the ability of the mayors to secure second terms after unseating local strongmen during their first terms. First, CDD projects allowed them to take credit for securing project funds. Steeped in personality-driven politics, the ability to deliver project funds proved a key issue in the elections. Second, CDD project processes enabled these politicians to distinguish themselves from traditionally-minded political leaders they unseated. In such a setting, it is not surprising to find politicians supporting 32 project processes that actually have the effect of diminishing their discretionary power to allocate project funds. The true test is if they are going to sustain these processes once project funds run out. Rightly or wrongly, the new projects being implemented through KCP and ARCDP are being attributed to the “strong performance” of the incumbent mayors in Pilar and Pio Duran. While the delivery of community-demanded infrastructure represents a limited sense of good governance, its entry into political discourse represents progress, especially in a constrained setting like Pio Duran, where the politics of guns and goons previously dominated the discourse. 4.2.2 The Impact on Demand-side Conditions CDD operations are helping create and strengthen community capacity for voice. The KCP and ARCDP provide community volunteers with training and direct experience in participatory analysis and identification of projects that respond to the felt needs of communities. Even in villages not prioritized by the KCP, exposure to participatory analysis is making community members acutely aware of the gap between community needs and recent barangay priority projects. In at least one barangay in Pio Duran, this led community volunteers to ask their barangay captain to communicate their concerns to the municipal government. While training in preference articulation has provided volunteers with opportunities for gaining confidence and skills in articulating community concerns and in interacting with government, these skills and newfound confidence have not yet been utilized beyond the project or for reforming local governance processes such as barangay planning and budgeting. The key question is how to sustain and use the newfound skills and confidence of community members once CDD projects end. For example, in the exit conference in Pio Duran, a MPDO staff member noted the energy at the community level unleashed by the KCP and how it may be wasted once KCP funds end. While recognition of the problem is an important first step, it is telling that the municipality view seems to be that this puzzle is for the KCP to solve rather than an opportunity for the municipality to further stimulate community voice and initiative. CDD operations are strengthening the capacity for voice by leading to the formation of new project-based organizations. These include rural water system associations, farmers’ cooperatives and women’s organizations. Some of these organizations will be sustained through their operations and maintenance functions as in the case of the Rural Waterworks and Sanitation Association (RWSA), which generates its own funds from user fees. Other organizations, particularly those engaged in enterprises (through the ARCDP), are expected to face difficulties given the short time to bring the enterprises from build-up to take-off and the limited existing capacities of these organizations. CDD operations are having a political impact at the barangay level, particularly as they facilitate the emergence of community volunteers as a new political force. These new leaders claim that their confidence was developed by involvement in KC project implementation. Evidence of their strength is that barangay officials now see volunteers as a potential challenge to their power. Community members see volunteers as having the same legitimacy as barangay officials. One barangay captain, who is facing term limits, says he is supporting the candidacy of a KCP volunteer. 33 CDD projects have also contributed to increased public access to information. It created demand for information on barangay IRA and AIP that would otherwise not have been accessed. Moreover, CDD activities have contributed to opening up new avenues for information sharing between municipalities and barangays through the participatory situational assessment, barangay assemblies and the KCP MIBF. Communities have also increasingly recognized the difference between public goods delivered by CDD projects and those funded by PDAF and the DPWH. KCP Beneficiaries particularly value the experience they are gaining in terms of identifying corruption in the delivery of public good as well as training in procurement and project implementation. In Pio Duran, for example, beneficiaries cite that while it took the KCP just PhP 1.3 million to build three new school buildings, roofs for two school buildings cost PhP 400,000 of PDAF. While a KCProad project cost only PhP 1.6 million for 1.2 kilometers, the DWPH spent PhP 15 million for 2.6 kilometers. And they even saw cracks already appearing in the DWPH roads, but none in the KCP roads. 34 5. Conclusions 5.1 Main Findings 5.1.1 Opportunities for Enhanced Accountability The Philippines has a fully elaborated legal and institutional framework for accountability in local governance (see Annex 7 for a table summarizing the main findings on how the enabling and constraining conditions of the meso-environment affect the space for accountability in local governance). First, aspects of fiscal decentralization generally enhance the institutional environment for local government accountability. Expenditure assignments are generally consistent with the subsidiarity principle, revenue collection responsibilities are consistent with parameters of efficiency and administrative feasibility, and central transfers are mostly formula-based unconditional grants. All these represent a shift away from a highly-centralized fiscal regime, thus enhancing incentives for downward accountability, which in turn heightens the stakes for citizens to participate in local governing structures and demand accountability. Second, accountability is also strengthened by a legal political framework that allows for direct subnational elections from the village to the province, with all elective officials having clear term limits. The system specifies a clear separation of powers between the legislative and executive branches at both the national and local level. The democratic system also allows for the exercise of direct democracy through constitutional provisions for recall, initiative and referendum. At the local level, citizens can propose the enactment, repeal or amendment of an ordinance as well as directly amend, reject or approve an ordinance through a referendum. The de jure political system is one that makes locally elected officials directly accountable to their respective constituencies and gives citizens tools for exacting accountability through mechanisms of direct democracy. Third, local governments have enough leeway to exercise autonomy. The LGC and the Constitution provide a clearly elaborated set of rules defining administrative autonomy allowing for discretion to legislate, decide and act on locally-produced policies. Local governments also have power over human resource management—including recruitment, hiring, and promotion, and defining the organizational structure of the local bureaucracy—although these are all subject to Civil Service Commission regulations. Fourth, the formation of civil society groups is encouraged by strong constitutional provisions for the exercise of civil liberties. Freedom of association and expression, and the right to information, are guaranteed by the 1987 Constitution. Enforcing this right to information are rich jurisprudence, a number of executive issuances and a law that obligates public officials to provide information. Fifth, access to information is buttressed by four elements of the legal policy framework. First, the Code of Conduct and Ethical Standards for Public Officials and Employees mandates that all public officials provide information on their policies and procedures. Second, the 35 Supreme Court makes rulings on what constitutes information that are public in nature. Third, administrative orders classify documents as public or instruct public agencies on ways to disclose public information. Finally, the 1991 LGC contains important provisions that compel local government to provide information to the public. Finally, the exercise of voice, negotiation and oversight by civil society is encouraged at the local level by provisions in the LGC for participation in consultative bodies involved in development and investment planning and the formulation of sectoral policies. The Government Procurement Reform Act not only provides a unified legal framework for procurement but also space for the exercise of oversight through CSO representation in the Pre-Qualification Bids and Awards Committee (PBAC). 5.1.2 Challenges to Social Accountability While there is a well-elaborated framework for local governance and social accountability, a number of challenges in the macro-environment constrain its implementation. First, fiscal decentralization notwithstanding, local governments face tight fiscal conditions. They are characterized by limited own resource generation, limited capacity for capital spending, dependence on central transfers and budget constraints softened by the availability of significant discretionary central transfers. All these serve to delink local spending from local revenue generation and weaken the incentives for citizens to participate in local governance activities, particularly holding their local government accountable. The tight fiscal conditions are underpinned by technical problems like the structure of IRA distribution, which tends to soften budget constraints in jurisdictions with more robust tax bases (i.e., cities), horizontal assignment of taxes that tend to distort tax collection incentives, weak local tax administration capacities, and the persistent lack of clarity of expenditure assignments because of the central government’s continued involvement in financing devolved public works and infrastructure projects. These conditions are also a reflection of political dynamics. For example, it is not easy to address the problems posed by discretionary central transfers, a significant portion of which come in the form of legislator allocations including: (1) the softening of local budget constraints; and (2) taking control over funds used to finance local capital expenditures outside the ambit of local government. These funds are an important leveraging mechanism of the executive, which authorizes release of the funds, and the legislative branch, which allocates use of the funds. Political accountability is further weakened to the extent that these transfers tend to foster loyalty of elected congressmen to the incumbent president. Second, political dynamics also limit the effectiveness of formal democratic institutions and decentralized administrative arrangements. The absence of platform-based political parties and preponderance of personalistic political culture tends to systematically weaken political accountability by narrowing the range of constituents to whom politicians are responsive. The situation is exacerbated by strong tendencies for local state capture by historically-entrenched local bosses, which historically form the basis for state formation. 36 Third, access to information is one of the major obstacles to enhancing the space for exacting local government accountability. Constitutional provisions and jurisprudence are evidently not enough to enforce this right. The existence of a non-harmonized and looselyworded list of government information exempt from constitutional provisions is also a problem. At the local level, the enforcement of LGC provisions compelling local governments to post relevant information is not closely monitored. Just as serious is the absence of a widespread predisposition for citizens to demand information. Fourth, the provisions for referendum, recall, the party list system, and local sectoral representation have proven ineffective. Three attempts at implementing initiatives at the national level have failed. There has also been no progress at the local level in terms of referendum and recall. The implementing procedures are cumbersome and initiatives taken in the name of people, NGOs and POs are not genuine. Fifth, human rights violations by state agents and armed groups constrain the capacity of citizens to hold local government accountable. These threats discourage organizing. They also probably explain why the most advanced initiatives in social accountability are concentrated in urban areas. Finally, civil society difficulty in exacting accountability is as much due to the existence of spaces provided by state institutions as to their technical capacity. CSO engagements with local government in budget monitoring, planning and service delivery are still in their infancy. This also partly explains why the spaces for civil society participation in local special bodies are not fully exploited. 5.1.3 Interactions between Local Governance and CDD Operations The case studies confirm the constraints and opportunities created by demand- and supply-side conditions as shaped by macro-level incentives. The following three are the most notable. Norms related to central-local fiscal transfers shape local governance conditions. Because these transfers tend not to be based on transparent rules but on the strength of local political ties with the central authorities that dispense them, this has fostered a governance mindset that values the ability of local political leaders to obtain external funds for development projects. The result is that these norms undermine citizen participation in planning and budgeting. For example, they put PDAF allocations beyond the ambit of LDCs, the body through which the community and CSOs can participate in budget planning and oversight. The LGC provisions for civil society participation in local special bodies lack effectiveness in substance and in form. In both the enabled and the constrained municipalities, the only difference is that there is nominal representation in at least two local special bodies in the former (i.e., in the LDC and the Local School Board). CSO representation is lacking in substance not only because of the problem of capacity but also because the exercise of voice is limited to consultation rather than a substantive role in prioritization and decision-making. There are no operational institutional processes whereby citizens can exercise oversight and negotiation. Thus, 37 there is an emerging disconnect between the capacities built by CDD operations on the demand side and governance processes in which these capacities may be used. Despite the constraints imposed by these macro-level conditions, innovations in local governance have been triggered by reformist leaders. As has been shown, Pio Duran and Pilar are dependent on central transfers of roughly the same size for financing much of their expenditures. And yet innovations in cost sharing and enhanced structures of vertical and horizontal accountability are being tested in Pilar but not in Pio Duran. In Pilar, two contextspecific factors support this openness to innovation: first, a local bureaucracy previously exposed to new ideas on cost-sharing and community mobilization through their experience with other donor-assisted projects; and second, exposure to provincial government innovations in systematically reducing poverty. However, constrained local environments—due to conflict, elite capture and patronage— reinforce macro-level disincentives for good local governance. In these contexts, such as in Pio Duran, the interactions between demand- and supply-side conditions are also evident. Its local politics undermine building incentives for social accountability as it imposes constraints on community organizing, and makes it more difficult to build trust between communities and the local government. In such constrained local governance contexts, CDD operations provide a significant channel for the poor to access goods and for communities to exercise voice. CDD operations enable the alignment of some local development funds and transfers from central government institutions with priorities set by communities, an improvement from previous conditions where the use of these funds was based largely on political discretion. Moreover, the use of social accountability tools like participatory planning, budgeting, monitoring and project implementation are helping develop relevant skills in local governments, citizens and civil society groups. This has built confidence among community volunteers to engage their elected barangay leaders. CDD projects can also be seen as a trust-building initiative that provides experience in local state-civil society engagement for the co-production of public goods. Trust is a particularly important theme in Pio Duran, where terrain and poverty has left many villages isolated. KCP processes are providing opportunities for dialog between community volunteers and elected barangay officials. A key challenge is how to sustain and use the newfound skills and confidence of community members once CDD projects end. For example, in the exit conference in Pio Duran, a MPDO staff member noted the energy at the community level unleashed by the KCP and how it may be wasted once KCP funds end. While recognition of the problem is an important first step, it is telling that the municipality view seems to be that this puzzle is for the KCP to solve rather than an opportunity for the municipality to further stimulate community voice and initiative. However, in this constrained local context, it seems unlikely that these innovations and reforms will be sustained or expand beyond the CDD project life. In Pio Duran, CDD projects are giving the communities their first taste of engaging local government at the barangay 38 level and in exercising voice in the choice, implementation and monitoring of sub-projects. But because of the absence of institutionalized processes for negotiation and voice in budgeting and planning, this experience remains in a project bubble in Pio Duran. For example, it seems that there are prior conditions that have to be met—on the supply side, reforms in central transfers so that more of these are subjected to local control; on the demand side, capacity for voice and association—for the development councils to institutionalize participatory planning and budgeting introduced by CDD projects. CDD operations are seedbeds for reform that need to be nurtured by complementary initiatives that will strengthen civil society capacities and weaken the institutional vestiges of patronage. In contrast, in an enabled local governance context, CDD operations have not only been implemented more smoothly, but also have the potential to leave a mark on local conditions beyond the project. In Pilar, CDD operations have led to innovations in bidding and procurement, in leveraging local resources in the mobilization of central transfers, and in energizing the local bureaucracy in regard to better ways of governing. Thus, differences in local conditions contextualize CDD operations and their impacts in an important way. Progress in local governance reforms in an enabled local environment may be expected to be more fundamental given its stronger starting point. The enabling environment thus plays a key role in determining opportunities for the ability of CDD operations to help improve local governance conditions. In turn, an understanding of locally-specific factors like these is important in evaluating the opportunities for local governance reforms. Fiscal conditions alone are not sufficient predictors: opportunities may be found in the most unlikely places. 5.2 Recommendations The main findings suggest the following operational and policy recommendations. First, enhancing the environment for participation in planning and budget requires reforms in central-local fiscal transfers, particularly discretionary transfers. Initial reforms may include requiring that these transfers should fund only those projects identified in the municipal development plan. This will give municipalities some control over the allocation of these transfers, rather than it being based purely on the discretion of legislators. The institutionalization of cost sharing arrangements in Pilar extended to include provincial and congressional transfers is another potential early reform. This arrangement will at least align central funds with community-set priorities. Second, it is important to strengthen checks and balances for these transfers, and increase the oversight capacity of civil society. A supply-side bottleneck may be addressed in part by strengthening demand-side conditions. Build the capacity of national and local NGOs to technically and politically engage in national and local budget processes. Third, CDD operations should better incorporate local governance into its design, particularly in activating local special bodies. It cannot be assumed that municipal and barangay officials and community members will easily see how the skills and social technologies embedded in CDD operations may be applied to local governance processes. This may entail 39 more than synchronizing the planning and budgeting calendars of CDD projects with municipal and barangay planning and budgeting calendars. It involves analyzing if local government processes and institutional arrangements can be the nodes for the institutionalization of participatory practices. This strategy needs to be devised in conjunction with an analysis of necessary policy support to mitigate macro-conditions affecting but not directly within the ambit of project operations (for example, the problems posed by politicized central transfers). These strategies should also harness the energy at the community level (i.e., CDD contributions to the enhancement of demand-side conditions). Finally, a local government assessment tool could help CDD operations to adopt contextspecific strategies to exploit opportunities for improving local governance. Some local contexts are more conducive than others in mainstreaming participatory and inclusive governance processes. Innovations at cost sharing, mainstreaming participatory procurement, and poverty-targeted budgeting require further investigation, documentation and support. They would make good readiness indicators for CDD institutionalization. The ultimate success of CDD is determined when its key principles of participation, transparency and accountability are incorporated into the planning and budget systems of local governments. This in turn, supports the long-term agenda for reform. This report shows some factors that shape the local governance and accountability space are within the influence of CDD operations, including: shoring up administrative skills of the local bureaucracy for participatory governance, animating governance arenas like the barangay assembly, building community capacity for voice, negotiation and oversight, and providing the experience of civil society-local government synergies that could be used to generate trust relations. However, other factors are beyond the scope of influence of CDD operations, including: local political dynamics, the politics of centrallocal transfers, and the design of institutional arrangements for vertical and horizontal accountability. Therefore, CDD operations alone are not enough to institute the necessary reforms for greater accountability in local governance. Rather, they are seedbeds of reform that need to be nurtured by complementary initiatives that will address the problems of patronage, discretion and lack of transparency. 40 Annex 1: Bibliography Anheier. 2006. Arroyo, Dennis, and Karen Sirker. 2005. “Stocktaking of Social Accountability Initiatives in the Asia and Pacific Region.” No. 37255. Washington, D.C.: World Bank Institute. Azfar, O, T. Gurgur, S. Kahkonen, A. Lanyi and P. Meagher. 2000. “Decentralization and Governance: An Empirical Investigation of Public Service Delivery in the Philippines.” College Park, MD: IRIS Center, University of Maryland. Bhargava, V. 2000. “Combating Corruption in the Philippines.” Manila: The World Bank Philippine Country Management Unit. Brillantes, A. B., Jr. 1994. “Redemocratization and Decentralization in the Philippines: The Increasing Leadership Role of NGOs.” International Review of Administrative Sciences 60:575-86. Campos, J. and J Hellman. 2005. “Governance Gone Local: Does Decentralization Improve Accountability” in East Asia Decentralizes: Making Local Government Work. Washington, D.C.: The World Bank. Chamberlain, R. A. 1998. Manila: PCNC. “Regulating Civil Society: The Philippine Council for NGOs.” Chua, Y. 2001. “The Power of an Informed Citizenry” in Sheila Coronel (ed.), The Right to Know: Access to Information in Southeast Asia. Manila: Philippine Center for Investigative Journalism. Caucus of Development NGO Networks (CODE-NGO). 2007. PDAF WATCH: A Civil Society Monitoring Tool (Preliminary Report). Manila, Philippines: CODE-NGO Estrella, M. and N. Iszatt. 2004. Beyond Good Governance: Participatory Democracy in the Philippines. Manila: Institute for Popular Democracy Gabito, M. 2001. “Status of Compliance with Department of Interior and Local Government Memorandum Circular No. 2001-89.” Appendix D, 10-10-10 Celebration: CSO Conference on Participatory Local Governance. Manila: Traders Hotel, October 7-9, 2001. Hedman, E. and J. Sidel. 2000. Philippine Politics and Society in the Twentieth Century: Colonial Legacies, Post-Colonial Trajectories. London: Routledge. Hutchcroft, P. 2003. “Paradoxes of Decentralization: The Political Dynamics Behind the 1991 Local Government Code of the Philippines” in Michael H. Nelson (ed.), KPI Yearbook 2003. ___________. 2001. “Centralization and Decentralization in Administration and Politics: Assessing Territorial Dimensions of Authority and Power”. Governance: An International Journal of Policy and Administration. Vol. 14, No.1, pp. 23-53. Hutchcroft, P. and J. Rocamora. 2003. “Strong Demands and Weak Institutions: The Origins and Evolution of the Democratic Deficit in the Philippines.” Journal of East Asian Studies 3:259292. 41 Iszatt, N. 2002. “Legislating for Citizens' Participation in the Philippines.” Manila: Logolink. Manasan, R. 2004. “Local Public Finance in the Philippines: In Search of Autonomy with Accountability.” PIDS Discussion Paper Series no. 2004-42. Makati, Philippines: Philippine Institute for Development Studies. Montinola, G. 2005. “Countries at the Crossroad: Philippines Country Report”. Freedom House. http://www.freedomhouse.org/modules/publications/ccr/modPrintVersion.cfm?edition=2&ccr page=8&ccrcountry=95 accessed June 2007. PHILDHRRA. 2001. “A Decade of Civil Society Participation in Governance. Paper prepared for the 10-10-10 Celebration: CSO Conference on Participatory Local Governance. Manila: Traders Hotel, October 7-9, 2001. Philippine Development Forum (PDF). 2006. “Strengthening Local Governance: Progress and Challenges.” Discussion paper presented at a meeting of the PDF Consultative Group and other stakeholders. Tagaytay City, Philippines: March 30-31. Ramos, C.G. 2007. “Decentralization and Democratic Deepening in the Philippines”. Manila, Philippines: Logolink. Rocamora, J. 2003. “Legal and Policy Frameworks for Participation in the Philippines.” Manila: Institute for Popular Democracy. Unpublished manuscript. Rocamora, J. 2004. “Conclusion.” in Beyond Good Governance: Participatory Democracy in the Philippines, edited by M. Estrella and N. Iszatt. Manila: Institute for Popular Democracy ___________. 1998. “Philippine Political Parties, Electoral System and Political Reform. http://www.philsol.nl/ accessed January 2007. Romero, S. E. 1997. “Issues and Trends in NGO-PO Participation in Local Governance” in NGO-PO Perspectives for the Local Government Code Review. Quezon City: Institute of Politics & Governance. Salazar, L.C. 2006. “Philippines: Charter Change in Full Steam, Once Again” Viewpoints, February 6, 2006, Institute of Southeast Asian Studies (ISEAS). http://www.iseas.edu.sg/viewpoint/lcs6feb06.pdf Accessed June 2007. Serrano. 2005. Shah. 1994. Songco, D., M.Ibañez and Rowell Candelaria. Accountability Projects.” Mimeo. 2007. “Preliminary Scanning of Social Soriano, M.C., J. Steffensen, E. Makayan and J. Nisperos. .2005. “Assessment of Non-IRA Transfers and Other Funds for Devolved Services in the Philippines: Final Main Report.” Manuscript. White. 2003. World Bank. 2004. “Decentralization in the Philippines: Strengthening Local Government Financing and Resource management in the Short term”. Report No. 26104-PH. Asian 42 Development Bank, Philippine Country Office; and The World Bank, East Asia and Pacific Region. Yilmaz, S., Y. Beris and R. Serrano-Berthet. 2008. “Local Government Discretion and Accountability: A Diagnostic Framework for Local Governance.” World Bank: Social Development Working Paper 113. 43 Annex 2: Description of the Case Study Projects 1. The Agrarian Reform Communities Development Program Project Context and Objectives The agriculture sector accounts for less than 20 percent of the Philippines gross domestic product (GDP) and represents the largest employment sector. More than half of the population lives in rural areas and are directly or indirectly dependent on agriculture for their livelihood. Only 51 percent of the total farm area is owned by farmers. With such a large number of tenant farmers, poverty remains a major concern in rural areas. An agrarian reform program has been underway for some 40 years, but it was only in 1988 that it received higher priority through the Comprehensive Agrarian Reform Law (CARL). While the Comprehensive Agrarian Reform Program (CARP) has had considerable success, particularly in providing support service to agrarian reform communities (ARCs), its covers about 50 percent of all ARCs (1,410). The CARP has focused on the land acquisition and distribution priorities mandated by the government. However, agrarian reform beneficiaries (ARBs) are receiving inadequate support services for community building, agricultural extension, physical infrastructure, credit and marketing. The Agrarian Reform Communities Development Program (ARCDP) was adopted as the key implementing strategy for the CARP. The ARCDP also supports the overarching objective of the Philippines Medium-Term Development Plan (MTDP) and the World Bank’s Country Assistance Strategy (CAS) to restore sustainable economic growth and to accelerate environmentally sustainable rural development with social equity. The ARCDP’s objectives are: (i) to assist ARBs and other farm families (non-ARBs) in the selected ARCs to gain access to productive resources and social and physical infrastructure, and (ii) to mobilize and coordinate support to ARCs from line agencies, Local Government Units (LGUs), non-governmental organizations (NGOs) and People’s Organizations (POs). Project Components Table 1. ARCDP1 (1997-2003) Project Components and Costs (millions of USD) Component Community development/technical assistance Agriculture and enterprise development Rural Infrastructure Project Management Total Actual/Latest Estimate Bank Government 6.10 37.00 45.50 11.20 4.20 1.30 49.70 55.60 Total Percent 6.10 37.00 56.70 5.50 105.30 6 35 54 5 100 Source: The World Bank, ARCDP 1 Implementation Completion Report, 2004. Community Development and Technical Assistance. This component sought to enable ARBs to achieve community-determined objectives through detailed and realistic planning, enhanced organizational capability and more effective resource management. It aimed to increase 44 community participation in barangay planning processes and implementation of development activities, and to maximize the sustainability of project interventions. Based on the component’s key sustainability indicators, this component has resulted in: incorporation of the three-year investment plans of 232 participating barangays’ in their respective Municipal Development Plans; strengthened POs’ capacity which led to increased membership of non-ARBs and women; and continued functioning of all barangay implementation teams and infrastructure and operations maintenance groups which are responsible for sustaining project investments. Rural Infrastructure. This component supported infrastructure investments such as the reconstruction or rehabilitation of roads, extension of existing irrigated areas and construction or rehabilitation of drinking water supply scheme. A total of 447 sub-projects were completed including 239 roads, 44 bridges, 56 irrigation systems, 75 water systems and 33 multi-purpose centers. The LGU required counterpart (in cash or in kind) for infrastructure was generally 10-30 percent of the total subproject cost. It was 70 percent for multi-purpose centers (later lowered to 50 percent), which lessened the demand for multi-purpose centers. Agriculture and Enterprise Development. This component aimed to promote and develop farm production and other income-generating activities of the beneficiaries through the provision of business consultant and technical advisory services. Agrarian reform beneficiaries are assisted in refining ARC development plans and in beneficiaries’ undertaking of individual projects. Initial benefits included adoption of improved and appropriate technologies by 56 percent of training participants, increased crop yields, and engagement of 46 percent of the target 40,000 farmerbeneficiaries in off-farm and non-farm activities. ARCDP 2 continues the initiatives of ARCDP1 and builds on the original program components. The new component, Support to Rural Finance, seeks to provide support and training to existing and new cooperatives to attract the involvement of microfinance institutions in the ARCs to increase the availability of market-driven rural financial services. Table 2. ARCDP2 (2003-2007) Project Components and Costs (millions of USD) Component Community Development and Capacity Building Agriculture and Enterprise Development Rural Infrastructure Support to Rural Finance Project Management Total Actual/Latest Estimate GOP Bank 1.44 5.99 36.53 2.08 3.37 54.80 .31 2.22 11.73 0.21 .81 20.00 Total Percent 1.75 8.21 48.26 2.29 4.18 74.80 3 13 75 3 6 100 Target Areas and Groups Geographic coverage. The selection of ARCs was based on the following criteria: (i) at least 50 percent of the total households are ARBs; (ii) the ARC Level of Development Assessment (ALDA) rating is 3 or higher; (iii) at least 75 percent of the households have land tenure; (iv) a 45 high level of interest and commitment of the LGU to support the project; and (v) high potential for project impact and availability of technical support. For ARCDP1, the original target of 100 agrarian reform communities was slightly exceeded with the selection of 102 ARCs. These were spread over 8 regions, 13 provinces and 93 municipalities. The ARCDP2 decreased the number of ARCs to 80, covering 17 provinces and 112 municipalities. Beneficiaries. Program beneficiaries were farmers from ARCs composed of one or more barangays. Project investment was focused on contiguous barangays within a defined area to enhance multiplier effects. The selection of the ARCs was based on criteria consistent with existing national programs, including the targets of Philippines 2000, the Department of Agriculture’s Medium-Term Agriculture Development Plan (MTADP) and the Department of agrarian Reform’s Strategic Operating Provinces (SOPs). Table 3. Project Operations Impact on the Space for Social Accountability ARCDP Design Elements Impacts on Local Governance Reform Means Fund flows Fund flows from the central level (Department of Agricultural Reform) to the local level (provinces, municipalities) are governed by transparent, poverty-targeted rules. Fiscal relations. Performance-based financial arrangement may serve as model for rules-based fiscal transfers from line agencies. Introduction of new norms in centrallocal fiscal relations. Political relations. Because transfers are rules-based, political discretion of central political actors lessened. Project processes Target agrarian reform communities take part in participatory planning assessment exercises. Voice. Capacity for voice is built in participating ARC barangays. Association. Emergence of barangay volunteers taking part in participatory needs assessment. Use of social accountability tools. Emergence of barangay-based social accountability champions. Sub-project planning and selection Project Management Board at the national level selects subproject proposals based on criteria agreed upon by the body. Voice. Capacity for exercise of voice in the choice of where public resources are to be allocated. Barangay-based committees develop project and prepare project concept, proposal and implementation plan. Use of social accountability tools. Help in the operationalization and institutionalization of LGC-defined participatory planning process at the barangay and municipal level. Trust-building through active engagement with municipal and barangay governments. Sub-project implementation Barangay-based committee manages implementation processes, operations and maintenance. Oversight. Capacity for oversight and management of local public services built in participating barangays. 46 Use of social accountability tools. Help in the operationalization and institutionalization of LGC-defined participatory planning process at the barangay and municipal level. ARCDP Design Elements Impacts on Local Governance Reform Means Trust-building through active engagement with municipal and barangay governments as well as through co-management and coproduction of public services. Strengthening of local government institutions Project strengthens barangay and municipal government as barangay and municipal development councils are targeted to be activated by processes engaging parallel project implementing bodies. Public controls. Operationalization of special barangay and municipal committees. CSO strengthening. Association. Encourages volunteerism Use of social accountability tools. at the barangay level. Emergence of barangay-based social Voice. Creates capacities for voice at accountability champions. various stages of the sub-project processes. Trust-building through active engagement with municipal and Access to information. Creates barangay governments as well as demand for access to information, through co-management and coespecially in the prioritization process. production of public services. 47 Use of social accountability tools. Emergence of barangay and municipalbased social accountability champions. 2. The KALAHI-CIDDS Project Project Context KALAHI, which stands for Kapit-Bisig Laban sa Kahirapan or “linking arms in the struggle against poverty,” is both a program and the primary poverty fighting framework of the President Arroyo administration. The KALAHI-CIDSS Project contributes to this broad strategy by enhancing the planning and implementation capabilities of communities, in particular in procurement, financial management, and project implementation. It complements other Bank assistance that focuses on improving investments in human resources (education and health), ensuring the poor have access to productive resources, and supporting efficient provision of other basic services. The project also contributes to strengthening the organizational and financial capacity of local actors, such as barangays, and the poor in particular. Core design features of the project reinforces the Country Assistance Strategy by promoting good and effective governance with a focus on: (i) fighting graft and corruption in projects; (ii) improving citizen access to information; (iii) promoting civil society participation in budget formulation and monitoring, and institutionalizing citizen feedback on quality and access to government services; and (iv) strengthening public sector rules and capacity. KALAHI-CIDSS adopts a community-driven approach to development and poverty reduction by: (a) empowering communities to manage their assets, lives and livelihoods in ways that restore their sense of responsibility and human dignity; (b) strengthening their social networks and linking them up with policy and administrative structures of the state; and (c) promoting representation and accountability at different levels of the decision making pyramid. The community nature of this investment identifies the barangay as the unit of analysis, not subgroups or individuals within the barangay. Given its focus on the community as a functioning unit, the project is designed to operate within existing institutional structures but to change processes within those structures. Given its community-centric focus, most of the investments are public or common goods. The project objective is to assist the government in strengthening local communities’ participation in barangay governance, and developing their capacity to design, implement and manage development activities that reduce poverty. This objective establishes a strong link between improved local governance and poverty reduction. This goal is pursued through three interlinked activities: empowerment of communities through participatory planning, implementation, and management of local development activities. It fosters an engagement with government at all levels to access, influence, and manage resources to meet community priorities. improvement of local governance by strengthening formal and informal institutions to become more inclusive, accountable, and effective. provision of grants for community investment programs by matching needs with limited resources in a competitive manner. Communities and LGUs engage in a demand-driven process of problem solving. The limited project grant resources will trigger better local resource mobilization, effective community ownership of investments, and induce the type of behavioral change required for long-term sustainability of such investments. 48 Project Components To respond to the stated goal of the creation of public value, investment options are based on an open menu as constrained by a negative list. Under this open menu scheme, barangays can request funds from the project to construct infrastructure, such as roads, bridges, water supplies and sanitation facilities. The project consists of the following three components: (a) Community Block Grants, (b) implementation support, and (c) monitoring and evaluation. Community block grants. The project assists communities (barangays in the selected municipalities) through a facilitated participatory planning process to develop sub-project proposals that are selected at an inter-barangay competitive forum comprising all participating barangays. This process takes four to six months. To ensure that communities and other institutional stakeholders initiate, plan, implement and manage subproject components chosen by them, the project provides implementation support for (a) social mobilization and community organizing, and (b) capacity-building and technical support. Social mobilization and community organizing involves a multi-level and multi-stakeholder organizing, socialization, and facilitation process to ensure that consistency with project principles is achieved. Social mobilization and community organizing are cross-cutting activities of the project happening at all stages of the project cycle: inception and area targeting, social marketing, information dissemination and sharing, community organizing, participatory community planning, sub-project preparation, municipal competition, project implementation, project monitoring and the preparation and completion of project reports. Capacity-building and technical support is provided to create capacity through training at the community level for project planning, contracting, construction supervision, operations and maintenance, bookkeeping and financial management to members of the Barangay Development Council and volunteers. The communities also receive technical assistance from the municipalities to assess the technical feasibility of sub-projects, project design and budgeting. Training is also provided at the municipal level to technical staff (the Local Chief Executive, Planning and Development Officer, Social Welfare Officer, and Engineer) to strengthen their capacity to support barangay level activities and undertake monitoring. Monitoring and evaluation. Monitoring is designed to provide for a continuous learning and adjustment of the project approach and involves: (i) participatory monitoring by communities based on self-defined indicators; (ii) internal monitoring of inputs, process, and outputs by the Project Management Office (PMO); (iii) independent external monitoring and evaluation by consultants; and (iv) civil society monitoring by NGOs and the media. A computerized management information system (MIS) enables internal input, process, and output monitoring, as well as an analysis of project impacts. Baseline data for impact monitoring is established early during project implementation when beneficiary barangays have been selected through the process of inter-barangay forums, and mid-term and terminal surveys will be undertaken subsequently. 49 Table 4 depicts the project costs for each of the above components. There is no minimum counterpart for LGU and community contributions per subproject. However, in the interbarangay selection process, community subprojects with higher LGU and community contributions (cash or in kind) have better chances of being selected. LGUs are required to provide contributions at the municipal level. This is around 30 percent (cash or in kind) of the total grant allocation. Table 4. KALAHI-CIDDS (1997-2003) Project Components and Costs (millions of USD) Component Community block grants Implementation support Monitoring and evaluation Total GOP 41.6 39.2 1.2 82.0 Bank 90.6 7.0 1.4 99.0 Total 132.2 46.2 2.6 181.0 Percent 72 26 1 100 Source: Kalahi-CIDDS Project Appraisal Document, 2002. Target Areas and Groups Geographic coverage. The project is national in scope, with the exclusion of the areas covered by the ARRM Peace and Development Social Fund. It aims to cover one-fourth of all municipalities in 42 provinces, where the incidence of poverty is above the 1997 national average of 33.7 percent. Municipalities were chosen based on a study that ranks municipalities within the target provinces based on: (i) household expenditures; (ii) human capital; (iii) housing and living conditions; and (iv) access to trade centers. The final list of municipalities within a province is finalized in a provincial workshop involving the provincial governor, the mayors and representatives from the academe, the media and non government organizations. Beneficiaries. All barangays in target municipalities are eligible for block grants. Funds are allocated to barangays through a process of open competition, with criteria and rules set by the Municipal Inter-Barangay Forum (MIBF). The MIBF is convened by the municipal mayor and constituted by Barangay Representation Teams (BRT)—one of the numerous barangay-level organs of KALAHI-CIDDS and constituted by three representatives from each barangay in the municipality—along with municipal government department heads and representatives of the local media, academe and NGOs. Only BRT members have voting powers in the forum. They decide the criteria on which basis community projects are prioritize but KALAHI-CIDDS typically pushes set criteria in trainings that prepare BRT members for the MIBF. The Kalahi-CIDDS planning and implementation cycle is constituted by four steps, each occurring in the municipal project sites: Social preparation and capacity building. Stage at which the project provides inputs (orientation training activities, community planning workshops, barangay assemblies and other skills enhancement activities) that will enable the respective communities to participate effectively in different aspects of the sub-projects. Project identification and conceptualization. At this stage, beneficiary-communities in an identify and conceptualize the project that they perceive will solve commonly-perceived problems of the community. 50 Project selection and prioritization. This stage is concerned with the process where the communities, through their elected representatives, meet to rank or prioritize project proposals endorsed for funding. Project implementation monitoring and evaluation. Implementation of sub-projects, the finalization of operations and maintenance plans to ensure sustainability and the conduct of periodic monitoring and field validation activities constitute the core of this stage. Volunteer teams organized to attend to the different concerns of project implementation. Table 5. Project interface with Social Accountability Space ARCDP Design Elements Impacts on Local Governance Reform Means Fund flows Fund flows from the central level (DSWD) to the local level (provinces, municipalities) are governed by transparent, poverty-targeted rules. Local funds flow directly to barangay account. Fiscal relations. May serve as model for Introduction of new norms in centralrules-based fiscal transfer from line local fiscal relations. agencies. Political relations. Because transfers are rules-based, political discretion of central political actors is decreased. Fiscal relations. Misses out on the processes of accountability ascribed in the municipal budget process. Introduction of new norms in centrallocal fiscal relations. Voice. Capacity for voice is built in participating barangays. Association. Emergence of barangay volunteers taking part in participatory needs assessment. Use of social accountability tools. Project processes Target barangays take part in participatory planning assessment exercises. Emergence of barangay-based social accountability champions. Sub-project planning and selection Inter-barangay municipal forum selects sub-project proposal based on criteria agreed upon by the body. Barangay-based committees develop project and prepare concept, proposal and implementation plan. Political relations. Empowerment of Use of social accountability tools. village members as subproject choice not limited to choices of village leaders. Help in the operationalization and institutionalization of LGC-defined Voice. Capacity for exercise of voice in participatory planning process at the the choice of where public resources barangay and municipal level. are to be allocated. Trust-building through live engagement Negotiation. Capacity for rules-based with municipal and barangay prioritization process. governments. Public controls. New rules for prioritization may be used for municipal planning process. Sub-project implementation Barangay-based committee manages implementation procurement processes. Oversight. Capacity for oversight and management of local public services built in participating barangays. Barangay-based committee manages operations and Public controls. Operationalization of special barangay committee for 51 Use of social accountability tools. Help in the operationalization and institutionalization of LGC-defined participatory planning process at the barangay and municipal level. ARCDP Design Elements maintenance. Impacts on Local Governance Reform Means procurement Trust-building through active engagement with municipal and barangay governments as well as through co-management and coproduction of public services. Strengthening of local government institutions Project mainly strengthens barangay government as barangay assemblies and barangay development councils are targeted to be activated by related sub-project processes. Public controls. Operationalization of special barangay committees. Use of social accountability tools. Emergence of barangay-based social accountability champions. Municipal government participation is through the Mayor, MIAC and MIBF. The project has only recently articulated the need for devising a strategy for integrating KC processes with municipal government processes. CSO strengthening. Association. Encourages volunteerism at the barangay level. Voice. Creates capacities for voice at various stages of the sub-project processes. Use of social accountability tools. Emergence of barangay-based social accountability champions. Trust-building through active engagement with municipal and Access to information. Creates demand barangay governments as well as for access to information, especially in through co-management and cothe prioritization process. production of public services. 52 Annex 3: Maps and Key Features of the Case Study Municipalities Map and Key Demographic and Geographic Features of Pio Duran and Albay Source: http://www.globalpinoy.com/travel/province/albay_map.htm Albay Region: Bicol Region (Region V) Boundaries: Pacific Ocean on the east, Lagonoy Gulf on the northeast, Burias Pass on the west and southwest Land Area: 255,260 hectares Capital: Legazpi City Number of Municipalities: 15 Number of Cities: 3 Number of Barangays: 720 Number of Households: 208,640 Population: 1,090,907 (2000) Income Class: 1st Poverty Incidence: 47% (2005) Employment Rate: 83% (2003) Main industry: agriculture Main crops: coconut, rice, sugar, abaca Pio Duran Income Class: 4th Population: 44,423 No. of Households: 7,966 No. of Barangays: 33 Land Area: 13,370 hectares Source: http://www.nscb.gov.ph/ru5/ 53 Map and Key Demographic and Geographic Features of Pilar and Bohol Source: http://www.globalpinoy.com/travel/province/albay_map.htm Bohol Region: Region VII Boundaries: Cebu on the West, Leyte on the Northeast, Mindanao on the South Land Area: 411,726 hectares Capital: Tagbilaran City Number of Municipalities: 47 Number of Cities: 1 Number of Barangays: 1,109 Number of Households: 209,588 Population: 1,139,130 (2000) Income Class: 1st Poverty Incidence: 70% Employment Rate: 87% (2003) Main industry: agriculture Main products: rice, corn, coconut, banana, fish, copra, mango, prawns, seaweed Pilar, Bohol Land Area: 6,248 hectares Number of Barangays: 21 Population: 25,095 (2000) Number of Households: 4,489 Income Class: 4tth Source: http://www.bohol.gov.ph/pilar.html 54 Annex 4: Local Governance Conditions: Comparing Enabled and Constrained Environments Supply- and Demand-Side Categories Conditions Common to the Two Case Study Municipalities Conditions Specific to Pilar (an enabled environment) Conditions Specific to Pio Duran (a constrained environment) A. Supply-side conditions 1. Fiscal 2. Administrative dependence on IRA personnel costs dominate expenditures weak own resource revenue generation lack of local control over discretionary central transfers Practice of some innovations including: cost sharing to leverage local resources greater efforts to increase own resource generation mayor-dominated planning, budgeting and procurement processes weak systems of horizontal oversight weak public information system substantial number of temporary employees Practice of some innovations including: Monday morning public meetings of municipal heads to report on activities regular barangay assemblies attended by municipal officials SB meeting held at the barangay participatory strategic planning using surveys and focus group discussions 3. Political presence of insurgency problem caused by poverty local political strongmen personality-driven electoral politics violence free elections and tolerance of political opposition political leadership is fair and just emerging community leaders presence of civil society organizations beyond sectoral groups instituted NGO accreditation process nominal participation of civil society organizations in the LDC and LSBs business tax is decreasing municipal enterprises are receiving subsidies four times their income forgoing CDD funds due to lack of municipal counterpart funds no legislation or practices to strengthen accountability Local Special Bodies are inactive local political violence and conflict with insurgents weak trust relations between citizens and local government B. Demand-side conditions 1. Voice 2. Information 3. Negotiation and oversight weak civil society capacity for the exercise of voice weak civil society voice in Local Special Bodies (LSB) weak demand for local government information (budgets, plans, policies) reliance on informal links with the municipal government for information recognized the important role of the barangay assembly in accessing local government information some limited attempts to convey information (Barangay Assemblies) public information not used for decision making weak civil society capacity for oversight and negotiation weak vertical institutions of accountability for negotiation and oversight CSOs prefer to lobby for funding support rather than exercise negotiation or oversight lack of barangay experience in negotiation 55 civil society organizations limited to neighborhood and sector organizations no NGO accreditation process no civil society participation in the LDC and LSBs Annex 5: Key Financial Data of the Case Study Municipalities Table 1. Pio Duran Income Sources: 2004-2006 Income source Total Income (M PhP) IRA (M PhP) Non-IRA (M PhP) Income from grants and donations (M PhP) Subsidy from other funds (M PhP) Own resource revenues (M PhP) own resource revenues as a percentage of total non-IRA income own resource revenues as a percentage of total income Business tax (M PhP) business tax as a percentage of own resource revenues Real property tax (M PhP) real property tax as a percentage of own resource revenues Income from enterprises (M PhP) income from enterprises as a percentage of own resource revenues IRA: Internal Revenue Allotment M PhP: millions of Philippine pesos (percent) 2004 37.4 34.9 2.5 .3 .0 2.2 88.4 5.9 .6 28.6 .3 13.4 .3 14.3 2005 44.2 37.7 6.5 1.0 3.2 2.3 35.9 5.3 .5 23.2 .3 11.6 .6 27.6 2006 55.7 45.6 10.2 7.4 .0 2.8 27.4 5.0 .7 23.6 .2 8.7 .5 16.2 Source: Pio Duran Statement of Income and Expenses, 2004-2006. Table 2. Pilar Income Sources: 2004-2006 Income source Total Income (M PhP) IRA (M PhP) Non-IRA (M PhP) Income from grants and donations (M PhP) Subsidy from other funds (M PhP) Own resource revenues (M PhP) own resource revenues as a percentage of total non-IRA income own resource revenues as a percentage of total income Business tax (M PhP) business tax as a percentage of own resource revenues Real property tax (M PhP) real property tax as a percentage of own resource revenues Income from enterprises (waterworks, public markets, etc.) (M PhP) income from enterprises as a percentage of own resource revenues IRA: Internal Revenue Allotment M PhP: millions of Philippine pesos (percent) Source: Pilar Statement of Income and Expenses, 2004-2006. 56 2004 28.6 24.9 3.7 .0 .0 2.7 74.5 9.6 .2 6.7 .7 25.5 1.4 49.3 2005 30.4 25.9 4.5 1.5 .6 3.8 85.4 12.5 .3 8.0 .6 15.2 1.5 40.2 2006 35.7 31.5 4.2 3.0 3.4 3.4 74.8 8.8 .9 8.8 .8 26.4 1.4 44.9 Table 3. Pio Duran Budget Appropriations: 2007 Budget Item Personal services Capital outlays Maintenance and operating expenses Non-office costs Calamity Fund (5 percent) Gender Fund (5 percent) EDF (20 percent) Subsidy to barangays Consultant and auditing services Travel expenses (PNP and BMJP) Representation allowance (DILG and Judge) to municipal enterprises Subsidy Total Budget Amount Share of (millions of total pesos) (percent) 25.44 .65 4.63 15.22 2.14 2.14 8.27 .03 .20 .02 .08 2.34 45.94 55.4 1.4 10.1 33.1 100.0 PNP: Philippine National Police BJMP: Bureau of Jail Management and Penology EDF: Economic Development Fund DILG: Department of Interior and Local Government Source: Pio Duran Municipal Budget, 2007. Table 4. Pilar Budget Appropriations: 2007 Budget Item Personal services Capital outlays Maintenance and other operating expenses Non-office costs Calamity Fund (5 percent) EDF (20 percent) Subsidy to barangays Subsidy to municipal enterprises Total Budget Amount Share of (millions of total pesos) (percent) 16.42 .56 2.80 17.38 1.78 5.90 .03 2.21 38.10 44.2 1.5 7.5 46.8 100 EDF: Economic Development Fund Source: Appropriation Ordinance No.02, Office of the Sangguniang Bayan, Pilar, Bohol. 57 Annex 6: Local Governance Conditions and Their Interactions with CDD Operations Supply- and Demand -side Categories Conditions Common to the Two Case Study Municipalities Effect of Local Governance Conditions on CDD Operations Effect of CDD Operations on Local Governance Conditions A. Supply-side Conditions 1. Fiscal dependence on IRA personnel costs dominate expenditures weak own resource revenue generation absence of local control over discretionary central transfers 2. Administrative 3. Political mayor-dominated planning, budgeting and procurement processes weak systems for local horizontal oversight (e.g., SB-executive branch) weak public information system substantial number of temporary and casual employees insurgency problem caused by poverty local political strongmen personality-driven electoral politics constrains LGU ability to raise counterpart funds weakens local government capacity to be more responsive to the needs of the poor weakens incentives for institutionalizing core participatory governance principles introduced by CDD operations constrains LGU ability to maintain, operate and expand services CDD helped deliver intermediate expansion of fiscal space enables cash-strapped governments to fund infrastructure projects they could not afford on their own municipal and barangay cost sharing causes the alignment of a portion of the municipal budgets with community-identified priorities looming presence of local executive poses increase in administrative skills of municipal the following challenges and barangay officials for inclusive and - perceptions of politicized CDD processes transparent modes of local governance - hindrance to institutionalizing core animation of barangay assembly and participatory governance principles thereby opening up contact between introduced by CDD operations municipal government and barangays diminishes the quality of CDD engagements with the LGU where trust relations between local government and citizens are problematic, trust in CDD processes are depreciated makes successful implementation of CDD projects politically important for incumbent politicians 58 introduction of performance and public service delivery into the election season discourse Supply- and Demand -side Categories Conditions Common to Two Case Studies Effect of Local Governance Conditions on CDD Operations Effect of CDD Operations on Local Governance Conditions B. Demand-side conditions weak civil society capacity for the exercise of voice weak civil society voice in Local Special Bodies 2. Information weak demand for local government information (budgets, plans, policies) reliance on informal links with the municipal government for information recognized the important role of barangay assembly in accessing local government information 3. Negotiation and oversight weak civil society capacity for oversight and negotiation where oversight and negotiation are exercised, they are mainly through lobbying activities and the use of personal connections weak vertical institutions of accountability for negotiation and oversight 1. Voice operational problems in mobilizing creation and strengthening of community community members for CDD processes capacity for voice in preference articulation like barangay assemblies at the onset of promotes the formulation of project-based CDD project implementation CBOs increases difficulty for institutionalizing core participatory governance principles introduced by CDD operations CDD projects need to educate community enhanced demand for information on members on the relationship between CDD barangay priorities processes and local government processes CDD decision-making processes requiring creation and strengthening of community the investment of time for meetings and the capacity for negotiation and oversight commitment of counterpart to be eligible for project funds perceived as cumbersome and costly by community members absence of prior experience in negotiation by barangays fosters sense of competition among barangays and difficulty in having a broader municipality-wide view of development 59 Annex 7: Local Governance Conditions and the Space for Social Accountability Conditions Affecting Social Accountability Space in Local Government Enabling Conditions Disabling Conditions 1. SUPPLY SIDE CONDITIONS 1.1 Fiscal Dimension 1.1.1 Transfer system 1.1.2 Revenues Majority of the transfers are formula-based unconditional transfers in the form of Internal Revenue Allotments (IRA) Revenue collection responsibilities consistent with economic efficiency, equity and administrative feasibility 1.1.3 Expenditures Expenditure assignments generally consistent with principle of providing control over the minimum geographic area that internalizes benefits and costs of provision 1.1.4 Local public financial management systems IRA formula weakens budget constraints in localities with relatively more robust tax bases (i.e., cities) unpredictability of timing and amount of IRA transfers Deep vertical imbalance, with majority of local expenditures funded by central transfers, including discretionary congressional funds (“pork barrel”) Limits on the autonomy of local governments to set tax rates Horizontal assignment of taxes across local governments distort collection incentives Weak local tax administration capacity Tendency of local officials not to fully exercise tax powers assigned to them for fear of electoral reprisal Persistent lack of clarity of expenditure assignments because central government is not barred from financing devolved public works and infrastructure projects Limited fiscal space, with the wage bill taking up a major portion of local budgets Participation of civil society in local planning and oversight bodies Existence of harmonized and clear legal framework for procurement Weak administrative capacity for internal and external controls Direct elections of executive and legislative braches of government in all barangays, municipalities and provinces Clear term limits for all elective officials Absence of platform-based political parties and preponderance of personalistic political culture Strong tendencies for local state capture by historicallyentrenched elite and local bosses Clear definition of roles for local chief executive in the LGC Clear definition of roles for legislation and oversight by local Sanggunian in the LGC 1.2 Political dimension 1.2.1 Electoral system for local officials 1.2.3 Separation of powers 60 Historically strong powers exercised by the executive at the national level (especially power to release pork barrel funds) tends to foster loyalty to the incumbent president Strong powers by the executive tend to weaken de facto oversight functioning of the Sanggunian Conditions Affecting Social Accountability Space in Local Government Enabling Conditions Disabling Conditions 1.3 Administrative dimension 1.3.1 Discretion to make and change laws and regulations pertaining to local affairs Existence of clear sets of rules defining administrative autonomy of local governments in the Constitution and in the LGC 1.3.2 Discretion over civil service/employment policies Local governments have power over human resource management, including recruitment, hiring, promotion and organizational structure of administrative branch subject to Civil Service Commission regulations Limits on powers to set pay policy Tendency for local chief executive to exercise discretion in hiring of temporary and contractual employees and in the appointment of teachers rather than institution of merit-based system 2.1.1 Freedom of association Strong constitutional provisions for the right to association Localized threats to associational autonomy due to cases of human rights violations by state agents and armed groups 2.1.2 Legal requirements for recognition of CSOs Absence of onerous requirements for registration Absence of harmonized framework for registration acts as disincentive for organizations to apply for legal recognition and makes difficult tracking number of CSOs Constitutional provision for the right to information, with rich jurisprudence and some executive issuances enforcing said provision Absence of Right to Information Act Existence of poorly harmonized and loosely-worded list of government information exempt from constitutional provision for the right to information Absence of widespread predisposition for citizens to demand information 2. DEMAND-SIDE CONDITIONS 2.1 Associational autonomy 2.2 Access to information 2.2.1 Right to information 2.2.2 Government reporting of information Code of Ethics for Public Officials (RA 6713) include responsibility to furnish information Web presence of most national executive agencies and many local government units Weak remedial measures for violation of RA 6713 Low compliance on requirements to publish local government policy decisions, budgets Absence of widespread predisposition for government agents to supply information 2.3 Voice 2.3.1 Freedom of expression 2.3.2 Unfettered media Constitutional provisions for freedom of expression, including right not to be persecuted based on political beliefs Unregulated national media 61 Existence of threats to local media freedom, including rising case of killings of local journalists Conditions Affecting Social Accountability Space in Local Government Enabling Conditions Disabling Conditions 2.3.3 Direct democracy institutions for the exercise of voice Constitutional provisions and legislation for the exercise of initiative and referendum De facto, spaces have been utilized by entrenched interest groups rather than citizens as implementing procedures are cumbersome 2.3.4 Enhancements to representative institutions Legislation for party list candidates Legislation for local sectoral representation (LSR) Operational problems lessen the impact of party list system on expanding the representation of marginalized groups Absence of enforceable law and implementing guidelines for the operationalization of LSR LGC provisions for CSO representation in LDC LGC provisions for CSO representation in other local special bodies, mostly sectoral councils, including but not limited to Local Health Board, Local Peace and Order Council 2.3.5 Citizen's consultation in local government decision-making processes De facto, only LDCs tend to be functional—for compliance to approve of AIP Local capture of CSO representation as registration process is administered by local government and not independent Weak capacity for meaningful participation by CSOs in LDCs Low compliance in the establishment of other local special bodies 2.4 Oversight 2.4.1 Direct democracy institutions Legislation for the exercise of recall De facto, still largely not operationalized and danger of being manipulated by particularistic interests because of provisions for role of elective officials (i.e., provision for Preparatory Recall Assembly) in what should be a purely citizen process 2.4.2 CSO participation in government oversight bodies Legislation for CSO representation in oversight bodies like the Pre-Qualification Bids and Awards Committee (PBAC) and Local School Board Weak CSO capacity for meaningful participation in PBAC 62 Annex 8: Examples of CSO Engagement in Social Accountability To play a more effective role in holding national government to account for their performance, NGOs and CSOs will need to match their skills in advocacy with technical skills in areas where they have had more limited experience to date. Two examples of this emerging role for NGOs include the following: Procurement Watch, Inc., an NGO based in Manila and established in 2001, seeks to combat graft and corruption in government procurement through its advocacy, research, and training activities. In 2003, it piloted the use of a public bidding checklist and monitored two procurement activities of three LGUs in Metro Manila, following the implementing rules and regulations of the Government Procurement Reform Act. It maintains active monitoring partnerships with the departments of Budget and Management, Health, Labor, and Public Works and works with them on procurement reform (Arroyo and Sirker 2005). PDAF Watch is a project of the Caucus of Development NGO Networks (CODE-NGO) that aims to monitor projects funded by the legislators’ Priority Development Assistance Fund (PDAF) and congressional allocations. The project mobilized volunteers to monitor PDAF projects in 37 congressional districts. In 2006, the group successfully lobbied for the insertion of a provision in the 2007 General Appropriations Act requiring legislators and government agencies to make information on the PDAF and congressional allocations easily accessible to the public (CODE-NGO 2007). Meanwhile, CSO engagements with local government in the technical functions of budget monitoring, planning and service delivery are still in their infancy—although there are probably more local NGOs than national-based NGOs involved in this work. The following examples are from a stocktaking report on locally (sub-nationally)-based NGOs involved in social accountability in the Philippines (Songco et al. 2007): The Transparent and Accountable Governance-Mindanao project, an initiative of the Mindanao NGO-PO Network (MINCODE), mobilizes CSOs in the cities of Cotabato, Dapitan, General Santos, Iligan, Island Garden City of Samal, Marawi and Surigao to lobby for reforms in procurement, public market services, city terminal operations and urban housing. It has triggered reforms in several functions of the seven local government units: procurement, public market services, city terminal operations, and urban housing. The Naga City People’s Council, a coalition of NGOs based in Naga City, is involved in city-sponsored processes for direction-setting and sectoral policy formulation. This council chooses and appoints NGO representatives to the local special bodies and pushed for the publication of a guidebook to city services including detailed procedures, response times, fees, personnel responsible, maps and a customer feedback form. Songco also identifies NGOs with either national scope or based in Manila involved in relevant local initiatives, including the following: 63 The Women’s Action Network for Development’s (WAND) “Local Level Gender Budget Initiative in the Philippines” project piloted the assessment of the impact of local government policies on gender, the identification of strategies for strengthening genderresponsive budgeting and the development of indicators for gender-responsiveness of budgets in health and agriculture. The International Center for Innovation, Transformation and Excellence in Governance’s (InciteGov) budget tracking project documented the use of financial resources in the Autonomous Region for Muslim Mindanao since it was created in 1989. 64
