Federalism as decentralization

There have been many objections to federalism as a political model. This political structure is believed to be the cause of  more red tape and bureaucracy because it supposedly introduces another level of governance.

However, it is best that we look at federalism as an organizational model. Take a look at federalism as a means of decentralization.

In management, decentralization is a form of organization in which the authority of the central body is delegated to sub units. The purpose here is to facilitate efficiency and effectiveness. In business, decentralization, in fact, ensures efficiency by making sure that  managers closest to the local information make decisions and in a more timely fashion. The result is the reduction of congestion in communication and quicker reaction to unanticipated problems.

Decentralization improves a company’s ability to deliver services, improves information about local conditions and allows more accountability because the failures of each unit are not hidden by the overall profitability of the company.

Political decentralization aims to give citizens and their local representatives more power. Federalism is really about the “devolution” of power. This means the transfer of responsibility for certain decisions from the national level to the sub-national level such as the regional government or the state.

In deciding the extent of decentralization, management organizations usually use size and diversity as the yardstick. The bigger the size and the greater the diversity,  the greater the level of decentralization.

In most countries, the geographical composition  of the states are often based on historical or natural formation. In the Philippines, the regions become a natural basis for federalism or decentralization.

In fact, decentralization or regionalization is already accepted as a fact by decision makers. For example, there is no national minimum wage level which is set at different levels on a regional basis. This is an acceptance that there are different economic considerations between the different regions.

The Gross Domestic Product ( GDP) growth rate may be an acceptable goal. But wouldn’t a regional GDP growth rate be fairer and inclusive? It really minimizes the economic benefit if the GDP growth rate is not evenly distributed.  If the nation has a high economic growth rate but the concentration of that economic growth is concentrated in Metro Manila, CALABARZON and Central Visayas, then the rest of the country will certainly remain as economic hardship areas. The result will be the continued existence of extreme poverty in other regions. Another result would be continued migration from the poor regions to the wealthier regions leading to the deterioration of the quality of life even in the wealthier regions.

If the economic goal is shifted from a national GDP growth to regional GDP growth, there will necessarily be regional economic development plans that will be different from each other. Obviously, a Metro Manila economic development plan will not be the same as an Eastern Visayas or Bicol economic development plan.  But if the economic growth rate target for CALABARZON, for example, is nine percent, why should it be lower for Western Mindanao or Bicol?

The one thing that is clear, is that the regional economic plans will be very different. Agriculture may be the engine of growth in one region, manufacturing in another region and technology in another region.

Metro Manila has always been considered as the center of imperialism in the Filipino life. This is justified by the insistence of Metro Manilans that the problems of this region should become national issues.

A perfect example is the EDSA traffic which Metro Manilans perceive as a national crisis. But this issue has no consequence to people living outside the metropolis especially to those living in the Visayas and Mindanao. Even in Metro Manila, there are actually people who never traverse EDSA. The traffic in EDSA is  a major regional issue.

Because the Philippines is such an overly centralized nation in every aspect – political, economic, social, cultural – every Metro Manila issue takes on the perception of becoming a national issue. In the meantime, the problems besetting other regions, where the majority of Filipinos live, become secondary problems.

If economic planning becomes decentralized, this does not mean that there is no need for centralized planning. Clearly, there will always be a need for centralized monetary and fiscal policies. However, the economic and geographic diversity of the nation requires regional economic development plans which must be implemented also on a regional basis rather than on a national basis.

The argument has been made that the local government units can be the vehicle for decentralization. The problem is that LGUs are not economically viable units on their own. At the same time, a national unit will not account for the economic and geographic diversity which exists in this country, There is a need for a intermediate level. This is the regional government or state.

Even in business management, decentralization does not mean that all tasks should be decentralized. Which decisions and tasks will be  centralized and which ones will be decentralized? This is always the biggest issue in organizations planning to decentralize.

The ideal way is always to set objectives and then determine how to organize in order to achieve the objectives we want. How do we best provide for national defense, health care, education? How do we develop agriculture? How do we ensure inclusive growth and eradicate poverty? How do we ensure that providing services to the ordinary Filipino is done in the fastest and most efficient manner? In many cases, the answer will be centralization but in other cases it will be decentralization. There will even be cases where it will be a combination of both centralization and decentralization.

Federalism as decentralization, rather than just as a political model, may be the best way to start the debate on federalism in this country.

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