FRAGMENTATION

OF LO CAL GO VERNMENT
F R A G M E N T AT I O N O F
LOCAL GOVERNMENTS
L AW 2 2 / 1 9 9 9
-T h e l o c a l e l i t e s i n I n d o n e s i a
reportedly abused an article.
L AW 3 2 / 2 0 0 4
-I t p r o v i d e s f o r t h e c r e a t i o n o f n e w
local governments, by proposing many
new local governments.
•The first eight years after decentralization saw the
number of local governments increase from around 340
to 470 (Brodjonegro, 2009, p. 105).

•It led to a reduction in the per capita allocation of

national grants and transfers to established local
governments; larger urban governments were the most
affected (Sarosa, 2006, pp. 166 -167).
- Ironically, the emergence of new local governments
only made local governments more heavily dependent
on the general allocation fund, the country’s main
inter-governmental transfer instrument.

- The role of locally sourced revenues became minor

since most of the new local governments do not have
sufficient economic base for local taxes and charges
(Brodjonegoro, 2009, p. 106).
  Inter-local
Two possible solutions Government
to these challenges Cooperation
identified by
BRODJONEGORO:
 Amalgamation
of Local
Governments
He suggested that the central government could
offer an incentive for neighboring local
governments to merge into one, in the form of
additional transfers to merged local governments.

However, Indonesia, so far, does not have that

kind of incentive (p.107).
In the PHILIPPINES, the fragmentation of
provinces has also increased although this was seen
costly, considering the tremendous administrative
overhead involved.

Despite this, there are still several more proposals to

divide province, which smack of a variation of
gerrymandering.
On a more positive, there have been some
successful cases of POLITICAL
AMALGAMATION, albeit among lower-tier
local governments.

 For instance, the Island Garden City of Samal was

formed through the amalgamation of five
municipalities in the island.
LACK OF
COORDINATION
BETWEEN CENTRAL AND
LOCAL GOVERNMENTS
In the PHILIPPINES,
Both central and local governments pursue local and
regional development, but their efforts are hardly
coordinated

This has resulted in duplication and the misallocation of

scarce resources.
- An example is the weak link between the planning and
budgeting processes at the national level are characterized
by a sectoral bias and a very weak spatial and physical
orientation.
Efforts had been made by the national government to
address the problem.

Four central government agencies issued a joint

circular (2007)
Department of the Interior and Local Government (DILG)
National Economic and Development Authority (NEDA)
Department of Budget and Management (DBM)
Department of Finance (DOF)
 Toprovide guidelines on the
harmonization and
synchronization of local
planning, investment
programming, revenue
administration, budgeting, and
expenditure management.
 To strengthen the interface between
LGUs and national government
agencies and the coordination between
and among all LGU levels in planning,
investment programming, revenue
administration, budgeting, and
expenditure management.
 To clarify and spell out the
responsibilities of the DILG,
NEDA, DBM, and DOF relative
to local planning, investment
programming, revenue
administration, budgeting, and
expenditure management .
 This only goes to show
that realities on the
ground can also
influence the policies of
higher-level
government
authorities.
THANK
YOU!
JACKIELYN V. DONATO