The Performance Governance System in the Philippines: Building the Capacity of Local Institutions

Abstract

Since 2004, the Center for International Private Enterprise (CIPE) has worked with the Institute for Solidarity in Asia (ISA) to develop and promote ISA’s performance governance system (PGS) as a management tool for local governments in the Philippines. When a city adopts the PGS – an adaptation of a management evaluation tool developed by Dr. David P. Norton, Director of Palladium Consulting, and Dr. Robert K. Norton, Professor at Harvard Business School – city government officials work with broad-based community groups to design specific public policy goals, develop an action plan to accomplish them, and implement performance metrics by which to measure progress. The system requires a city to implement a series of reforms that fundamentally transform its policymaking process and its bureaucratic structure, and city staff must complete a rigorous training regimen.

In early 2005, eight Philippine cities became the first local governments to adopt the public governance system. By late 2009, over 40 local governments were working with ISA, along with more than a dozen national public agencies and civil society groups. While progress has not been uniform, the positive impacts are clear for those cities that are successfully implementing the PGS. For example, several cities are now generating significantly more local revenue, enabling them to both reduce their financial dependence on the central government and to make additional investments in their communities. One city increased the volume of resources mobilized through public-private partnerships by nearly seven-fold, and the length of time required to register a business was cut from two weeks to two hours. In another city, property tax collection rates improved from the city’s historical average of around 10 percent to nearly 70 percent.

Such improvements in public governance are, in large part, made possible by the systems and practices introduced by the PGS and the enhanced capacity of local institutions developed through ISA training. Moreover, by institutionalizing the input of community groups and business associations in the policymaking process of local governments, this project encourages democratic participation by citizens and private sector organizations. This, in turn, strengthens the incentives of public officials to improve transparency, to foster economic growth and to improve the quality and reliability of public services.

“For democracy to deliver,” explains Dr. John D. Sullivan, Executive Director of the Center for International Private Enterprise, “local government has to perform.” This project’s success gives reason to hope that reform can take hold in the Philippines.

John Morrell is the Regional Director for Asia &the Pacific at CIPE. He has experience with development projects throughout the world on issues such as micro-finance, emerging market risk analysis, non-profit management, governance, and urbanization. He has conducted several studies on topics related to corruption and public sector governance and has helped direct internal fraud investigations of multinational corporations. John Morrell holds a bachelor’s degree in economics from the University of Virginia, a master’s degree in public policy from Georgetown University, and was a Graduate Fellow in the International Management Program at Oxford University.