FEDERALISM
MARCH 09, 2018 | JOHNCENT ESPIRITU AND RONNIEL MARCELO
- Describing the political context of the Philippines
William Riker’s definition of federalism goes, “federalism is 6a political organization in which the activities of government are divided between regional governments and a central government in such a way that each kind of government has some activities on which it makes final decisions.” (as cited in Blume and Voigt, n.d.)
Basically, federalism decentralizes the power of government into a national, and local government units which are left to their own dispositions. A proposal for the shifting of the form of Philippine government is not recent news. In fact, there were already a lot of politicians who proposed to shift the Philippines to a federal system back then. Right after the administration of Corazon Aquino, particularly during the Ramos administration, constitutional reforms were laid out to the public until the term of Arroyo. Benigno Aquino III was initially open to the idea of a charter change, but changed his mind around the latter half of his administration.
Before the political and economic consequences of federalism are discussed, common misconceptions about federalism and decentralization must first be debunked. In the country, when federalism is talked about, it is usually completely associated with decentralization. However, there are relevant differences to be noted between the terms so as to preempt possible misunderstanding in the rest of the article. Decentralization does not absolutely mean transferring decision-making powers and independency to sub-national government units. It is a form of transferring power from a central government to local government units without necessarily requiring that the local government unit must stand on its own. In fact, decentralization can be done in a unitary or federal state. In a unitary state, even with the presence of decentralization, the central government can rebuke its initial decision and centralize the power once again. In federalism, a charter change is being implemented in which the form of the government itself is being amended. Simply, as Blume and Voight (n.d.) defined,
“Thus, at the most basic level, the terms federation and decentralization simply distinguish between levels of decision making: federation is a constitutional-level characteristic, whereas the term decentralization describes a policy choice at the post-constitutional level.”
- Political Consequences (e.g. political dynasty, election result differences)
The term political dynasty, for one, is not foreign in the Philippine political discourse. Political dynasties exist in the Philippines, largely because of two competing reasons. One assumes that culture plays a big part of it while the other assumes that weak political institutions in our country makes this political phenomena persistent. While some argue that the presence of political dynasties is not in any way strongly related to a locality being poor, it is still a fact that its presence is inefficient, given that they serve as a barrier for new political entrants. In addition, rent-seeking issues in areas where political dynasties are prevalent shall be dealt with because these issues exacerbate inefficiency.
Cultural notions such as having strong family ties and utang na loob are said to contribute to the persistent phenomena of political dynasties in the country. A lot of Filipinos, especially in the rural areas, see utang na loob whenever they are being helped by a well-off family in their area, so as when this political family run in elections, they persistently win and rule over the locality. On the other hand, a lot of Filipinos have the culture of going to their close relatives when asking for help. This culture transcends to the government, connoting that when someone needs help, it is more to plausible do it to a close relative, or a close friend which also happens to be a government official.
Westminster system, the political system in Australia, for example, prevents the prevalence of political dynasties in their country even when their form of government is federal. The big problem in the Philippine political arena is the presence of a weak political party system. A lot of politicians tend to change parties out of petty reasons such as not being part of the majority. Due to this unbecoming trend coupled with the Filipino culture of having strong family ties and pagtanaw ng utang na loob, the politicians in the country during elections are voted by Filipinos based on his family background and not because of other crucial reasons such as his ideology and political will.
The presence of political dynasties, therefore, is a major concern when the Philippines would shift from being unitary to federal. A strong political party system, with a change of perspective on electing politicians in the country, is needed before changing the form of government. If this would not ensue first, local governments in the country would end up in cemented dynasties controlling political power (Diaz 2018).
The country should undergo a long time of reforming in building a strong political party system in the Philippines. If weak political system will be present in the course of shifting the form of government in the country, political dynasties could serve as virtual dictators controlling political power, such as those in the experiences of Malaysia, Cambodia, and Singapore (Diaz 2018). PDP-Laban’s proposal is reminiscent in this case since they propose that the shift to federalism be coupled with the reform of political system in the Philippines. However, some argue that it might be safer to build-up on our political system first by implementing a Political System Reform Act, and waiting until political systems stabilize, before shifting into a different form of government.
Another perspective on the political consequences in this issue is the idea that federalism could initiate competition amongst different political families and clans in different areas. Aggregating different localities in building a state involves grouping different provinces with different dominant political clans present, to form one state. This grouping could impel competition amongst different political clans, which is a healthy sign for a political scene; but the presence of unchanged culture in the electorate and the weak political system could water down these positive effects of federalism, politically speaking.
- Economic Consequences
A common knowledge about the advantage of federalism between undergraduate economists comes from Charles Tiebout through his Tiebout hypothesis. Basically, he made a comparison between the efficiency of the private sector and the public sector in a federation. The underlying theory of efficiency comes from the concept of competition. Given the presence of competition in the private sector, an efficient provision of private goods becomes possible given that there are a lot of firms operating in the market. With this assumption, the local governments in a federation would also be efficient given that practically, they are operating in the same manner as the private firms. The main difference, however, is private firms exist for profit incentives while local governments would compete for attraction of residents. Through this reason, communities would supply the goods that residents want in the lowest possible cost to ensure efficiency.
Rent-seeking behavior from individuals can be greatly reduced through federalism (Weingast, 1995). Rent-seeking behavior is when individuals accumulate personal benefits and/or wealth but do not contribute to the improvement of societal welfare. This behavior is undesirable since this could exacerbate the unequal income distribution between agents of the society, reduced government revenue, and et cetera. Through competition between local communities, regulations for such type of behavior would be possible. In a federalized local state, preferences of individuals can be observed through the goods they buy and because of this, the local government would be providing a certain combination of public goods for the residents. Another advantage that results from federalism is construction of an active citizenry (Stiglitz and Rosengard, 2015). Since there is a more direct relationship between the local government and residents, the latter would ensure that its efforts are geared towards the preferences of its citizens. Through this, the local government could be held more accountable in case of faulty implementation of welfare programs. The residents have more power over the local government since they could demand certain programs which the local government would be compelled to provide. Moreover, in simple terms, every rational person would want more utility for himself. In turn, residents would put pressure on the government to be efficient so as to provide more services.
On the other hand, there are also claims on how federalism could be generally disadvantageous to a country. First off, competition could lead to efficiency, but also inequality. As explained, local communities would be serving the best interests of its residents. Theoretically, local communities would gain more when its residents are middle-income or at best, higher-income individuals. These individuals contribute more taxes, and set up more private firms that could lead to better development of a community. Local communities actually have the incentive to deviate from providing direct services to the poor since by doing so, their community would be filled with more poor people. From this, there is a clear sign of inequality between social statuses of people. This is pure inequality in terms of income redistribution and welfare programs, which generally goes against the principle of equity in the society.
For a country that is not well-off, federalism is claimed to not be an option for developing the society. Shifting from a unitary form of government to a federation without proper preparations of underdeveloped communities would lead to an exacerbation of unequal development within the country. Local communities that have already developed, such as Metro Manila, would have a head start in development. Meanwhile, those localities with not enough resources would find themselves filled with individuals will less developed skills since professionals would prefer living in a local community that could serve their interests better. Going back to the argument against competition, there is a high chance that taxes for business firms would be lowered so as to attract these businesses to establish franchise in the respective community. To offset this loss in local government revenue, local taxes may rise up and in the end, the ultimate beneficiaries of federalism would be the corporations and not poor individuals. Again, inequality is present in federalism.
- Conclusion
Other issues such as the Philippines being composed of different ethnic groups which could result into a cultural subdivide; the Bangsamoro Basic Law issue which the Moro Islamic Liberation Front claims is more favorable than Federalism; and the large economic costs of Federalism must also be taken into consideration. Fixing a plethora of economic and political setbacks first may be a more optimal move than expediting the country’s shift to federalism that which could exacerbate these problems, in the end.
V. References (APA Format)
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Blume, Lorenz and Voigt, Stefan, Federalism and Decentralization - A Critical Survey of Frequently Used Indicators (September 5, 2008). Available at SSRN: https://ssrn.com/abstract=1263995 or http://dx.doi.org/10.2139/ssrn.1263995
Burgonio, T. (2014, August, 16). Aquino won’t push Charter change during his term—Palace spokesperson. Inquirer.net. Retrieved from http://newsinfo.inquirer.net/629674/aquino-wont-push-charter-change-during-his-term-palace-spaokesperson
Diaz, J. (2018, February 25). Federalism will cement dynasties. Inquirer.net. Retrieved from http://opinion.inquirer.net/111294/federalism-will-cement-dynasties
Ferrer, M.C. (2017, June 28). Why the MILF prefers BBL over federalism. Inquirer.net. Retrieved from http://opinion.inquirer.net/105182/milf-prefers-bbl-federalism
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Tomacruz, S. (2018, January 17). LOOK BACK: Past Charter Change attempts and why it failed. Rappler. Retrieved from https://www.rappler.com/newsbreak/flashback/193825-past-attempts-charter-change-philippines-failed
Stiglitz, J. E., & Rosengard, J. K. (2015). Economics of the Public Sector (Fourth ed.). 500 Fifth Avenue, New York, NY: W.W. Norton Company, Inc.
Voigt, S., & Blume, L. (2012). The economic effects of federalism and decentralization—a cross-country assessment. Public Choice, 151(1/2), 229-254. Retrieved from http://www.jstor.org.ezproxy.upd.edu.ph/stable/41406925
Weingast, B. (1995). The Economic Role of Political Institutions: Market-Preserving Federalism and Economic Development. Journal of Law, Economics, & Organization, 11(1), 1-31. Retrieved from http://www.jstor.org.ezproxy.upd.edu.ph/stable/765068
