Decentralization in the Philippines: From Inclusive to Shared Growth

Chapter 11 (co-written with Damcelle Torres-Cortes, Assistant Professor, College of Public Affairs and Development, University of the Philippines Los Baños) elaborates on a mechanism by which the problem of skewed distribution of income and wealth in the Philippines could be solved: decentralization. The chapter is essentially a meta survey of related literature on decentralization and its relation to shared growth, as manifested in the two socio-economic goals of efficiency and equity. We find that more rigorously done studies tend to reveal the positive contribution of decentralization on efficiency. On the other hand, decentralization was observed to have an aggravating effect on equity, suggesting the need for the implementation of countermeasures. It was noted, however, that inter-regional competition may help mitigate the widening of the income/wealth gap.