Samal Island City College

Public Administration Program

Old City Hall, Brgy. Peñaplata, IGACOS
(+63) 922-422-3283

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Public Administration Program
Peñaplata, IGACOS

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Self-Instructional Module for Self-Engaged Learning

Module for PAC 203: Governance and Development

Disclaimer: This learning module is a self-paced instructional learning

material for flexible learning. This module is a draft version only, not for
quotation and not for commercial reproduction. The module contains
various topics obtained and copied from various learning
materials/sources from the internet and solely intended for the use of
enrolled students of the Samal Island City College.

Public Administration Course (PAC 203): Governance and Development | 1

Prepared by: Prof. Adriane John P. Luncido
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 Samal Island City College
Public Administration Program
Old City Hall, Brgy. Peñaplata, IGACOS
(+63) 922-422-3283
Table of Contents

Page Number
Preliminaries Table of Contents 2
Course Information 4
Chapter I
Introduction to Governance and Development 5
Weeks 1 to 2
Evolution of Governance 5
Governance and Government 6
Systems of Governance 7
Importance of Governance and Government 9
Players and Actors of Governance 12
Indicators of Good Governance 14
Summary 24
Keywords 24
Self-Check 25
Let’s Analyze 27
References 32
Chapter II
Government: Roles, Functions and its Powers 33
Weeks 3 to 4
Government and its Branches 33
Line Agencies of the Government 37
NEDA Board 41
Inherent Powers of the State 48
Public Goods and Services 49
Reasons for Government Intervention 50
Sources of Government’s Fund 51
Summary 52
Keywords 53
References 54
Let’s Check 54
Let’s Analyze 55
Chapter III The Roles of Government, Private and Civil Society
56
Weeks 5 to 6 Sectors for Development
The Civil Society 57
Private Sector 60
Governance and Human Development 62
The State 62
Summary 66
Let’s Analyze 66
Chapter IV
Tools of Government for Development 69
Weeks 7 to 8
Types of Policy Instruments and Steering 70
Stylized Model for Pursuing Development 71
Fiscal Policy 74
Monetary Policy 75
Supply-Side Economics 79
Summary 80
Keywords/ Self- Check 81
Let’s Analyze 82
Public Administration Course (PAC 203): Governance and Development | 2
Prepared by: Prof. Adriane John P. Luncido
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 Samal Island City College
Public Administration Program
Old City Hall, Brgy. Peñaplata, IGACOS
(+63) 922-422-3283
Table of Contents
Page Number
Chapter V
Fundamental Sectors of Development 82
Weeks 9 to 10
Fundamental Sectors/Areas of Development 83
Chapter VI
Sustainable Development Goals 88
Weeks 11 to 12
Sustainability 89
Sustainable Development Goals 92
Doughnut Model for Development 94
Summary 97
References 97
Let’s Analyze 97
Chapter VII Challenges of Governance and Development in the
98
Weeks 13 to 14 Philippines
Factors Pushing for Good Governance 101
Key Issues and Challenges in Governance 108
List of Laws Related to Graft and Corruption 113
Summary/Sources 118
Self-Check 119
Let’s Analyze 119

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Prepared by: Prof. Adriane John P. Luncido
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 Samal Island City College
Public Administration Program
Old City Hall, Brgy. Peñaplata, IGACOS
(+63) 922-422-3283

Course Information
ADRIANE JOHN P. LUNCIDO
Name of the Coordinator:
Economist/ Environmental Planner
Program: Public Administration
Electronic Mail (e-mail) [email protected]
Contact Number: 0948-146-3825
Required Number of Hours 54 Hours
Consultation Hours: Tuesday/Thursday (1-2pm)
Credit Units: 3.0
Pre-requisite: None
Mode of Delivery: Flexible Learning

Welcome to this PAC 203: Government and Development Module.

This module is in lieu and in view of the vision of the institution becoming
a premier and sustainable City College of Samal, transforming lives and
communities through quality education. Even despite the foregoing world-wide
spread of the COVID19, the SICC is committed to provide access to affordable
and quality higher learning education with the main of becoming drivers of
change for growth and sustainable development of the community and of Samal
in particular.
Our physical classes are, however, constrained to be scheduled as
pursuant to the policy guidelines as provided for by the state, the local
government unit, and by the City College. Hence, most of your time will be
devoted to this module for self-paced learning module.
In this modular course, you will personally deal with the basic principles
of how the government system runs and the basic theories/principles by which
government function/purpose is anchored on. The School of Thoughts of
governance and development theories will also be covered. The link between
the government’s role to achieve development by industry sectors of the
economy shall also be discussed and studied. Moreover, Development Plans
such as Philippine Development Plan (PDP) 2040, the Regional Development
Plan (RDP) of Region XI, and City Development Plan (CDP) of IGACOS shall
also be studied.
This module has specific and limited topics/information as compiled by
the coordinator of the course. Therefore, as a student, you are encouraged to
explore other textbooks, online references or through multimedia (e.g. Youtube)
or any means to further augment your learning and understanding.
Limit NOT yourself in learning! All the BEST and ENJOY!

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Prepared by: Prof. Adriane John P. Luncido
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 Samal Island City College
Public Administration Program
Old City Hall, Brgy. Peñaplata, IGACOS
(+63) 922-422-3283

CHAPTER 1
Introduction to Governance and Development

Development which is not sustainable is not development at all.

Essay: In a one whole yellow paper, what is the importance of governance to

development? Is there a direct relationship between governance and
development? What is the relevance of this course to your degree program in
Public Administration?

Learning Objectives (FOR Weeks 1-2)

At the end of this chapter, the learners (the students of the public
administration) should be able to:
1) Trace the evolution of governance
2) Understand the importance of governance, both in local and national
level, to growth and development
3) Critically define governance
4) Familiarize the roles and functions of governance towards
development

Evolution of Governance
Since the early
dawn of civilization and
humanity, governance is
already present. Exercise
of power or authority by
the leaders (or any
individuals who possess
the authority to lead) for
the purpose of welfare of
the whole has been
pivotal already for the management and development purposes. However, in
the past, governance in its technical and judicious application is not that of
primordial importance. As the time goes by complexity and structure of
governance evolve for efficient and effective utilization of their limited
resources.
The idea of “governance” began to influence policy debates during the
period of market liberalization and reforms during the 1980’s. Leaders of

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Prepared by: Prof. Adriane John P. Luncido
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Old City Hall, Brgy. Peñaplata, IGACOS
(+63) 922-422-3283
developed nations like Ronald Regan of the United States of America and
Prime Minister Margaret Thatcher of the United Kingdom sought to reorganize
the society anchored on the principles and values of market and property
rights. During their time, it was presumed that through these principles’
economic inefficiency, corruption, and arbitrary rule in developing countries
will come to end. Premised on this context, governance was advanced as an
alternative conception of authority expressed through institutions that would
insulate markets from rent-seeking distributional coalition. This emphasizes
the role of institutions in providing checks and balances on the powers of
various organs of the state to ensure a stable, predictable and non-arbitrary
state – a fundamental condition to spur economic growth and development.
Governance, linguistically, refers or connoted as the act or process of
“governing” or “steering”, directing and controlling a group of people or a
state by their political leaders for common good and development. Governance
is essentially related to politics, in that sense politics is the art of governance.
Just like politics, governance also essentially deals with governments,
institutions, organizations, business and overall public administration. The
powers exercised by the participating sectors of the society promote common
good, as it is essential for cooperation and development of citizens and the
state. This line of reasoning is premised on the fact that government cannot
solely do everything for the people. Thus, in order to survive the state should
not rely solely from the government but also to other sectors of the society.
Governance is related also to the proper, efficient, and effective use of
limited resources to achieve collective goals. In this sense, governance needs
the tools by which efficiency and effectiveness can be achieved – in this the
study of economics is also important.

Governance and Government

Governance is associated with government. Literatures often

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 Samal Island City College
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Old City Hall, Brgy. Peñaplata, IGACOS
(+63) 922-422-3283
interchangeably used them. However, political scientists widened the latitude
and the definition of governance which is not limited only to government but
also to the private entities and the civil-society agents. Governance includes
three broad sectors: 1) public sector (state agents and institutions), 2) the private
sector (household and firms), and 3) the civil society (non-governmental
organizations or NGO). These three sectors play pivotal and interdependent
roles/functions to achieve the common good and development of the
community/country/state. Moreover, these three sectors play important
functions in the process of governance whether for intergovernmental,
transnational or international. In view of this, we can say that governance is
broader than government.
The study of government is associated with control and direction and
governance is for decentralization and relational management. Government
refers to central authority or institution which wields power over its objects and
subjects. It is an instrument patterned after the “command and control” model.
The government being the authority over the affairs of the business entities,
households, and other sectors of the society. Meanwhile, governance is closely
related to the concept of decentralization of powers and inter-sectoral
management. Using this notion of governance, we can say that there is a need
to move rom the “traditional hierarchical” exercise of government to
“dispersed and relational power in governance”

Governance According to UNDP

The challenge for all societies is to create a system of governance that
promotes supports and sustains human development, especially for the
poorest and most marginal. But the search for a clearly articulated concept of
governance has just begun.

Good governance is, among other things, participatory, transparent and

accountable. It is also effective and equitable. And it promotes the rule of law.
Good governance ensures that political, social and economic priorities are
based on broad consensus in society and that the voices of the poorest and the
most vulnerable are heard in decision-making over the allocation of
development resources.

Governance has three legs: economic, political and administrative.

Economic governance includes decision-making processes that affect a
country's economic activities and its relationships with other economies. It
clearly has major implications for equity, poverty and quality of life. Political
governance is the process of decision-making

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Old City Hall, Brgy. Peñaplata, IGACOS
(+63) 922-422-3283
to formulate policy. Administrative governance is the system of policy
implementation. Encompassing all three, good governance defines the
processes and structures that guide political and socio-economic relationships.

Governance encompasses the state, but it transcends the state by

including the private sector and civil society organizations. What constitutes
the state is widely debated. Here, the state is defined to include political and
public sector institutions. UNDP's primary interest lies in how effectively the
state serves the needs of its people.

The private sector covers private enterprises (manufacturing, trade,

banking cooperatives and so on) and the informal sector in the marketplace.
Some say that the private sector is part of civil society. But the private sector is
separate to the extent that private sector players influence social, economic and
political policies in ways that create a more conducive environment for the
marketplace and enterprises. Civil society, lying between the individual and
the state, comprises individuals and groups (organized or unorganized)
interacting socially, politically and economically -regulated by formal and
informal rules and laws.

Systems of Governance

Systems of governance play an

essential role for country’s growth and
development. Through these systems, it
allows government to address inefficiency
and/or ineffectiveness of agents of the
delivery of goods and services needed most
by the people. These systems are designed for
specific situation faced by a country.
Basically, there are three systems of governance all over the world. Some
of which are still practiced, and some are abandoned already. These systems
are a) Centrally Planned; b) Free-Market and c) Mixed System.
Centrally Planned System is a system in which decisions as to what to
produce, how to produce and its locations, and who are going to produce the
basic goods and services needed by the people are decided by central body.
This central authority being referred to is the government. It must be
remembered that in this type of system all resources are collectively owned by
the government. Consequently, private individuals do not have the right to

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 Samal Island City College
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Old City Hall, Brgy. Peñaplata, IGACOS
(+63) 922-422-3283
possess any private property. Try to think of a country that all resources are
collectively owned by the government? Perhaps, the first country that will
come to your mind is North Korea. The definition of this system fits to the case
of the North Korea where all decisions are centrally planned by their political
leader.
However, this kind of system has its own disadvantages in which many
countries around the globe tried to veer away from their existing policies and
practices. This is due to the impracticality and inefficiency of this system where
growth and development results to sluggish performance. Total production,
investment, trade and even consumption are too complicated since it all
depends on the command of central government. Centrally planned decisions
make bottlenecks which result to delay of delivery of essential and non-
essential needs of people. Misallocation of resources, shortages and surpluses
are more pronounced. The private entities/firms which can deliver basic goods
and services with quality and speed is not present in this kind of system. Since,
there is no price system in operation, resources will not be used efficiently.
Arbitrary decisions will not be able to make the best use of resources. Incentives
tend to be distorted. Workers with guaranteed employment and managers who
gain no share of profits are difficult to motivate. Moreover, the dominance and
control of the government may lead to a loss of personal freedom and liberty
of choice. Finally, government may not share the same aims with the majority
of the population. Yet, by power, may implement plans that are not popular,
or even false.
Meanwhile, Free-Market System is a system in which private enterprise
rules the market activities. Capitalism (or a doctrine in which acquiring of
wealth and assets in a legal way) is more pronounced in this kind of system.
Government, in this instance, has no power to regulate and interfere any of the
market activities. It also does not intend to provide any public goods as needed
by the people but leave all the market activities to private
providers/entities/firms. Private players of the market (i.e. the consumers and
the sellers) determine the quantity and quality of the product to be sold. In this
sense, it is expected that surplus or shortage of goods and services are
minimized to none. This type of system is viewed as a self-righting mechanism
in which surpluses or shortages are addressed by the price adjustment system
and agreements.
The disadvantage of having a Free-Market System is that consumer is
prone to manipulation and price control set by the suppliers of product. This
puts disadvantage especially in times of unusual events (e.g. disaster,
pandemic, typhoon and among others) where consumers are forced to buy
necessities at a higher price without government’s control and regulations.

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 Samal Island City College
Public Administration Program
Old City Hall, Brgy. Peñaplata, IGACOS
(+63) 922-422-3283
Illegal market activities may also flourish because of government’s no
interventions. Demerit goods (i.e goods which are not good for people such as
drugs or child prostitution, among others) will be over provided because of
driven high demand, high price and profit motive. Merit goods (i.e. goods or
services which are good for people such as education or healthcare) might be
underprovided since selected few or selected group of people can only afford.
Furthermore, limited resources (e.g. timber, golds, silver, and other non-
renewable resources) may be consumed quickly by few individuals promoting
also environmental damages like pollution. Large and multinational firms may
grow at faster rate and dominate industries leading to high prices, loss of
efficiency, and excessive market powers.
During the 1800’s to early of 1900’s, this type of system was adopted by
most of the government in the West (e.g. Europe and America) not until after
the experience of Great Depression which led to new opening of system of
governance which is the mixed system. The downfall or abandoning of this
system was mainly attributed to failure to solve the problem of inefficiency (i.e.
surplus and shortage) and market failures.
In present times, most of the economic and governance system of all
country around the globe has shifted to Mixed System of Governance. This
system of governance is a combination of free-market and centrally planned
systems of governance. Learning from the mistake of too much liberalism
where market activities are left behind to market players alone, the birth of
mixed system of governance emerged. In this system, government’s
involvement to market operations as referee and as a third party is deemed
essential. Since there are some real dangers exists if free market is left to operate
without interference, the government now provides fair rules of the game
promoting healthy competition and dismantling monopoly of market
activities. Further, government also acts and plays essential role in planning
and execution of development objectives and goals while allowing the private
sector to participate in areas needing of investments to develop.

Importance of Governance and its Study

(source: governancetoday.com)

The importance of governance to organizational efficiency and

effectiveness in achieving goals and objectives can never be underemphasized.
It plays a pivotal role. The following are the some of the importance of
governance to organizational development:

• It preserves and strengthens stakeholder confidence – nothing

distracts an organization more than having to deal with a disgruntled
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 Samal Island City College
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Old City Hall, Brgy. Peñaplata, IGACOS
(+63) 922-422-3283
stakeholder group caused by a lack of confidence in the governing body.
And on the positive side, a supportive stakeholder base can generate
benefits for the organization though social and emotional support,
intangible but very valuable attributes that all organizations should
strive to achieve and sustain;
• It provides the foundation for a high-performing organization – the
achievement of goals and sustainable success requires input and
support from all levels of an organization. The Board, though good
governance practices, provides the framework for planning,
implementation and monitoring of performance and without a
foundation to build high performance upon, the achievement of this
goal becomes problematic. Achievement of the best performance and
results possible, within existing capacity and capability, should be an
organization’s on going goal. Good governance should support
management and staff to be “the best they can be”; and
• It ensures the organization is well placed to respond to a changing
external environment – business today operates in an environment of
constant change. Technology has created an information age that has
transformed our world, and for business to both survive and remain
profitable to enable it to fulfil its mission and achieve its vision, a system
has to be in place to assist an organization to identify changes in both
the external environment and emerging trends. This process of
understanding our changing world does not happen by chance, it
requires leadership, commitment and resources from the governing
body to establish and maintain such a system within the
organization. Change generally does not happen “over-night”, it is
there for all to see if they have in place a system for looking. Governing
bodies, as the ultimate leaders of an organization, should take prime
responsibility for this activity.
• It educates the public to demand good governance – good governance
allows the best of the public service and public goods to be rendered in
a swift and efficient manner. People can distinguish and replace
performing officials from non-performing officials making our social
institution more firm and solid.

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(+63) 922-422-3283

In summary, governance encompasses the processes by which organizations

are directed, controlled and held to account. It includes the authority,
accountability, leadership, direction and control exercised in an
organization. Greatness can be achieved when good governance principles
and practices are applied throughout the whole organization and that’s why
governance is important. The disadvantages of poor governance may be
considered as the inverse of all of the points made above and many more.

Processes and Players in Governance

(source: https://tamayaosbc.wordpress.com/2014/08/21/what-is-governance/)

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Prepared by: Prof. Adriane John P. Luncido
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 Samal Island City College
Public Administration Program
Old City Hall, Brgy. Peñaplata, IGACOS
(+63) 922-422-3283

Source: https://isoc.bj/internet-governance-actors-and-intiative-in-benin/

Decision-Making and Implementation

Governance entails two processes: decision-making and implementation of
the decision. In broad terms, decision-making refers the process by which a
person or group of persons, guided by socio-political structures, arrive at a
decision involving their individual and communal needs and
wants. Implementation is the process that logically follows the decision; it
entails the actualization or materialization of the plan or decision. Governance
is not just decision-making because decision without implementation is self-
defeating. Neither is it just implementation because there is nothing to
implement without a decision or plan. Thus, the two processes necessarily go
hand-in-hand in, and are constitutive of, governance.

Actors and Structures

1. Understanding the two processes requires an analysis of the “actors”
involved and “structures” established for making and implementing a
decision. An actor is a sector or group or institution that participates in
the process of decision-making and implementation. A structure refers to
an organization or mechanism that formally or informally guides the
decision-making process and sets into motion the different actors and
apparatuses in the implementation process.
2. Having such a broad scope, governance has different facets and may be
applied in different contexts, such as corporate governance, international
governance, and national and local governance. In each context,
governance has different actors and structures. Depending on the kind of
decision made and the structure implementing it, governance may be
good or bad governance.
3. The government is almost always the main actor in governance, whether
it is in the corporate, international, national or local level. The government
is called the “public sector.” While it is the biggest actor in governance, it
is not the only actor. Modern complex societies, in order to meet the
growing demands of development, are managed in different levels by
various actors. Even communist governments work with other sectors,
especially with international organizations and multi-national
corporations, in meeting their communist ends. The main role of the
public sector is to provide an enabling environment for the other actors of
governance to participate and respond to the mandate of the common
good.

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4. All actors other than the government are called the “civil society.” The
civil society includes non-governmental organizations, and other
community-based and sectoral organizations, such as association of
farmers, charitable institutions, cooperatives, religious communities,
political parties, and research institutes. These organizations are private
in nature but have public functions or objectives. The Philippine Red
Cross, for instance, is a non-governmental organization. It is a private
charitable institution that serves the community especially during
disasters and emergencies by providing medical assistance and disaster
support services.
5. The study of Philippine governance, however, includes the business or
private sector as an indispensable partner in development. To cope with
the ever-growing demands of development, the public sector must
necessarily tie-up with the private sector most especially in the financial
6. In the national and international level, decision-making is greatly
influenced by actors like the media, international organizations, multi-
national corporations, and international donors. Thus, from the
foregoing, it should be clear that governance involves several actors in
multi-level structures.

Informal Actors and Bad Governance

1. Other informal actors also exist, such as organized crime syndicates and
powerful families. Their influence is felt more clearly in local governments,
and in rural and urban areas. Most often than not, these actors are the cause
of corruption, in that legitimate government objectives are distorted by
their illegal and private interests. Worse, they manipulate government
officials and agencies, and cause widespread yet organized violence in the
community. In urban and rural areas, for example, the rich and powerful
families control the economy by controlling the local government officials.
They bring about a controlled environment so that decisions must always
favor them. Allegedly, even government officials, both local and national,
are not just influenced but themselves members of organized crime
syndicates with the purpose of using public office and, consequently,
public funds for personal aggrandizement.
2. When these actors and informal structures disrupt, corrupt and upset the
legitimate objectives and ideals of the society, bad governance will result
which is considered as the chief problem of the society. Problems deepen
and multiply because of bad governance. Inasmuch as economics and
politics are interrelated, poor economy is caused by bad governance.
International aids and loans, for instance, are scarce in a badly governed

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(+63) 922-422-3283
country. International donors and financial institutions are increasingly
basing their aid and loans on the condition that reforms that ensure “good
governance” are undertaken. Recognizing these realities, current economic
and political goals of countries all over the world are aimed at “good
governance.” It is an ideal so broad and elusive the realization of which is
yet to be achieved. More so, the contemporary meaning of “development”
is good governance, or more specifically a reform from faulty governance
to good governance.

Indicators of Good Governance

Eight Indicators of Good Governance

Good governance is understood through its eight indicators or
characteristics: (1) Participatory; (2) Rule of Law; (3) Effective and
Efficient; (4) Transparent; (5) Responsive; (6) Equitable and Inclusive; (7)
Consensus Oriented; and (8) Accountability. They are inextricably related
to each other. For instance, without active participation among the
various actors in governance, there would be a concomitant lack of
responsiveness. Likewise, if decision-making is not transparent, then
inevitably there would be no participation, accountability, and decisions
are not consensus oriented. These indicators should, however, be
understood in the context of good “democratic” governance. Some of the
indicators cannot be applied in other forms of government. For example,
good communist governance could never be consensus oriented or
genuinely participatory.

It must also be emphasized that good governance and

development should not be based exclusively on economic growth.
Through global persuasion, good governance and development signify a
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(+63) 922-422-3283
broader spectrum of things, such as protection of human rights, equitable
distribution of wealth, enhancement of individual capabilities and
creation of an enabling environment to foster participation and growth of
human potentials. As it evolved today, sustainable development
necessitates “people empowerment” and “respect for human
rights.” After all, economic prosperity or the minimization of poverty and
unemployment depends on how the state unleashes the full potential of
its human resource by recognizing their vital roles and according full
respect for human rights.

a) Participation
Good governance essentially requires participation of different
sectors of the society. Participation means active involvement of all
affected and interested parties in the decision-making process. It requires an
enabling environment wherein pertinent information is effectively
disseminated and people could respond in an unconstrained and
truthful manner. It also means gender equality, recognizing the vital
roles of both men and women in decision-making.

More fundamentally, the need for participation is a recognition

of the limits of a “verticalized system” of governance. A verticalized
system, or the top-down approach, refers to a state or government
monopoly both of powers and responsibilities. While the government
is still the most potent actor in the process of governance, the
participation of other sectors is already a necessity because of the
always evolving complexity and ever-growing needs of the societies,
especially in the financial sphere. What should now be utilized is the
so-called “horizontal system” where the government works hand in
hand with other sectors of the society. The different sectors are
considered partners of the government in attaining development goals.
Governance should no longer be government monopoly but
government management or inter-sectoral participation.

Participation in representative democracies may either be direct

or indirect, and recommendatory or actual. It could be indirect and
recommendatory because in principle the form of government is based
on delegation of powers. In the Philippines, which possesses features
of both direct and indirect democracy, indirect participation is done
through public consultations or hearings, while direct participation is
through elections, initiatives and referendums.

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The management of highly complex societies and of their ever-

growing needs requires a participatory form of governance by
diffusing power. The move for decentralization is a response to this as it
widens the base of participation and allows local government units to
exercise governmental powers directly within their respective districts.
Service delivery is enhanced because of the proximity of local
government units to their constituents, and because of the linking
which happens between the national government and regional
concerns.
Participation is one of the strengths of Philippine governance.
The 1987 Philippine Constitution is replete of provisions dealing with
relational and inter-sectoral governance. The Local Government Act of
1989 was borne out of the need for decentralization in Philippine
governance. As such, these and other related legislations may be
considered as normative standards for good governance.

b) Rule of Law
Democracy is essentially the rule of law. It is through the law that
people express their will and exercise their sovereignty. That the
government is of law and not of men is an underlying democratic

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principle which puts no one, however rich and powerful, above the
law. Not even the government can arbitrarily act in contravention of
the law. Thus, good democratic governance is fundamentally
adherence to the rule of law.
Rule of law demands that the people and the civil society render
habitual obedience to the law. It also demands that the government
acts within the limits of the powers and functions prescribed by the
law. The absence of rule of law is anarchy. Anarchy happens when
people act in utter disregard of law and when the government act
whimsically or arbitrarily beyond their powers. In more concrete
terms, rule of law means “peace and order,” “absence of corruption,”
“impartial and effective justice system,” “observance and protection
of human rights,” and “clear, publicized, and stable laws.”

What the law seeks to promote is justice. When there is dearth of

legislation for curbing social evils, or even if there is, but the same is
ineffectual or unresponsive, and when there is no faithful execution
of the law, then justice is not attained. When the justice system is
biased and discriminatory, when it favors the rich and the influential
over the poor and lowly, or when the legal processes are long,
arduous, unavailable or full of delays, then justice is not attained.
Then when the actors of governance can minimize, if not eliminate,
these injustices, then there is said to be rule of law.

Rule of law also requires that laws are responsive to the needs of
the society. Archaic or irrelevant laws must be amended or repealed
to cater to modern demands.

The Philippines does not fare well in this aspect of good

governance. In spite of being one of the oldest democracies in the
region, the Philippines ranked as last among seven indexed Asian
countries according to the World Justice Project Rule of Law Index.
Generally, the reasons for ranking last are “lack of respect for law,”
“pervasive and systemic corruption in the government,” and
“circumvention of the law.” Lack of respect for law is generally
caused by distrust on the integrity of law enforcement agencies. Order
and security are compromised, and criminal justice is rendered
ineffectual.

Systemic corruption has long been a problem in the Philippines

that like a malignant tumor it keeps on sucking the life out of the
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country. Allegedly, it is the key officials in the government who direct

the perpetration of this crime. What became clear from a long string
of corruption and plunder cases is the true motive of many aspiring
politicians – money. The huge amount of money spent during election
campaigns are but mere investments for a more profitable return
during their term in office.

In addition, the justice system is flooded by legal practitioners

who are experts at circumventing the law. Circumvention happens
when there is compliance with the letter of the law but violation of its
spirit and purpose. Due to technicalities, for instance, highly paid
lawyers can find ways for their rich and powerful clients to evade the
law. Although apparently there is observance of law, it is only
superficial as the real end of the law is forfeited. As such, there is a
concomitant violation of fundamental rights of the people and
ineffective administration of justice.

Nevertheless, the Philippines has exerted efforts in promoting the

rule of law. The series of cases filed against high ranking officials,
previous Presidents, members of the judiciary, and high profile
persons for graft and corrupt practices prove one thing clearly: the
honest drive of the current administration to clean the government
from corrupt traditional politicians. In addition, legislations were
made to hasten the legal process. The “Alternative Dispute Resolution
Act of 2004” (R.A. 9285), for instance, seeks to unclog the court
dockets by promoting a speedy, efficient, and less expensive
resolution of disputes. The “Judicial Affidavit Rule” issued by the
Supreme Court in 2013 also lessened to a great extent the time and
expenses of litigation.

c) Effectiveness and Efficiency

Good governance requires that the institutions, processes, and
actors could deliver and meet the necessities of the society in a way that
available resources are utilized well. That the different actors meet the
needs of the society means that there is effective governance. That the
valuable resources are utilized, without wasting or underutilizing any
of them, means that there is efficient governance. Effectiveness (meeting
the needs) and efficiency (proper utilization of resources) must
necessarily go together to ensure the best possible results for the
community.

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Concretely, effectiveness and efficiency demands “enhancement
and standardization of the quality of public service delivery consistent
with international standards,” “professionalization of bureaucracy,”
“focusing of government efforts on its vital functions, and elimination
of redundancies or overlaps in functions and operations,” “a citizen-
centered government,” and “an improved financial management system
of the government.”

Public service delivery, especially of front-line agencies, must

promptly and adequately cater the needs of the citizens. Doing so
requires simplified government procedures and inexpensive transaction
costs. Cumbersome procedures and expensive costs trigger corruption
and red tape. “Red Tape” refers to the disregard for timeframes in
procedures by government agencies through procrastination in public
service delivery or under-the-table or unofficial transactions. To further
curb such possibilities, the government agencies must comply with their
citizen’s charter and use up-to-date information and communications
technology to reduce processing time. There must also be coordination
among various government agencies to eliminate redundant
information requirements.

Professionalism in Philippine bureaucracy requires competence

and integrity in civil service. Appointments to civil service must be
depoliticized and must be based solely on merits. Effectiveness and
efficiency also demands that the programs and objectives of the various
government agencies are aligned with individual performance goals.
The increases in compensation are likewise necessary for the economic
well-being, sustained competence and boosted morale of the civil
servants.

Although still insufficient, efforts were made to attain

effectiveness and efficiency in Philippine governance. The Anti-Red
Tape Act of 2007 (ARTA), for instance, was passed to require the setting
up of Citizen’s Charter for a simplified procedure and to facilitate
governmental transactions. Also, many government departments and
agencies pursued a rationalization program to check excessive and
redundant staffing.

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d) Transparency
Transparency, as an indicator of good governance, means that
people are open to information regarding decision-making process and
the implementation of the same. In legal terms, it means that information
on matters of public concern are made available to the citizens or those
who will be directly affected. It also means that transactions involving
public interests must be fully disclosed and made accessible to the
people. It is anchored on the democratic right to information and right
to access of the same. Transparency is necessary not just from
government transactions but also in those transactions of the civil
society and private sector imbued with public interests.

The reason why there should be transparency is to promote and

protect democratic ideals. When there is transparency, people are placed
in a better position to know and protect their rights as well as denounce
corrupt or fraudulent practices in the public sector and in the private
sector.

Although again insufficient, efforts were made in pursuit of

transparency in Philippine governance. As far as the government sector
is concerned, the current administration, consistent with its drive of
curbing corruption, promotes honesty and integrity in public service. It
is currently pursuing the passage of the Freedom of Information Bill and
other related legislations, as well as intensifying people’s engagement in
local governance. Transparency in budget and disbursements are,
however, still far from being substantially implemented.

e) Responsiveness
Responsiveness means that institutions and processes serve all
stakeholders in a timely and appropriate manner. It also means that actors
and structures of governance easily give genuine expression to the will
or desire of the people. In other words, the interests of all citizens must
be well protected in a prompt and appropriate manner so that each of
them can appreciate and take part in the process of governance. While
responsiveness is also a characteristic sought from the private sector and
civil society, more is demanded from the government or the public
sector.

Gender equality is engrained in the egalitarian principles of

democracy. Gender concerns that respond to the women and their

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community must always be part of the agenda of public sector and civil
society. Thus, emerging as important areas in the study of democratic
governance are “Gender and Development” and “Gender
Responsiveness.” The participation of women in governance within the
context of “gendered socialization” rests on how responsive the
structures and processes are to their roles and needs.

Some of the important efforts made to attain responsive

governance in the Philippines are decentralization, creation of citizen’s
charter in all frontline agencies (as required by ARTA), and gender
sensitivity programs. First, through decentralization, local governments,
which are more proximate to their constituents, serve more promptly
the people, who in turn become more involved in decision-making.
Second, every government agency now has it Citizen’s Charter, which
provides timeframes for every step in attaining frontline services.
Agencies now must also respond to written queries sent by the
stakeholders or interested parties within a period of ten days, otherwise
there will be delayed service. However, this aspect of governance still
remains to be one of the causes for the decline of public’s confidence in
the public sector. Although the ARTA has been passed, there is still so
much delay in public service delivery. The failure of the government
agencies to explain the charters to the stakeholders is one of the main
reasons why there is still delay.

f) Equity and Inclusiveness

Equity and inclusiveness mean that all the members of the
society, especially the most vulnerable ones or the grassroots level,
must be taken into consideration in policymaking. Everyone has a
stake in the society, and no one should feel alienated from it.
Particularly, those who belong to the grassroots level must not only be
the subject of legislation, but they must be given the opportunity to
participate in decision or policy making.

Social equity refers to a kind of justice that gives more

opportunity to the less fortunate members of the society. It is based on
the principle that those who have less in life should have more in law.
Good governance demands that the actors must give preferential
attention to the plight of the poor. Laws must be geared towards this
end and the society must actively participate in the promotion of the
same.

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The Philippine Government has done extensive efforts in

promoting equity and inclusiveness. The Constitution makes it as one
of its state policies the promotion of social justice. Pursuant to this, the
Congress has enacted social legislations like the Comprehensive
Agrarian Reform Law which aims at freeing the farmer tenants from
the bondage of the soil. Also, representation in the Congress, under the
party list system, is constitutionally mandated to have sectoral
representation of the underprivileged. Gender and Development
programs are in the process of being integrated with the various
structures and institutions in the country. But legislation is one thing;
implementation is another. It is in the faithful implementation of these
laws that the country failed. Inequality is especially felt in the justice
system, electoral system, and even in the bureaucracy itself.

g) Consensus Oriented
Governance is consensus oriented when decisions are made after
taking into consideration the different viewpoints of the actors of the
society. Mechanisms for conflict resolution must be in place because
inevitably conflict that will arise from competing interests of the actors.
To meet the consensus, a strong, impartial, and flexible mediation
structure must be established. Without such, compromises and a broad
consensus cannot be reached that serves that best interest of the whole
community.

Fundamentally, democratic governance is based on the

partnership of the actors of the society in providing public services.
Decisions-making must therefore entail recognition of their respective
interests as well as their respective duties. The essential of governance
could never be expressed in a unilateral act of policy making by the
public sector or other dominant sectors. Public hearings or
consultations in arriving at a consensus are therefore inherently
necessary in the process of governance.

Among the things done by the Philippines in promoting a

consensus oriented governance are: (1) creation of a wide-based of
representation in the Congress; (2) a two-tiered legislature or
bicameralism which subjects legislation to the evaluation of national
and district legislators; and (3) necessity of public hearings or
consultations of various governmental policies and actions.

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h) Accountability
Accountability means answerability or responsibility for one’s
action. It is based on the principle that every person or group is
responsible for their actions most especially when their acts affect
public interest. The actors have an obligation to explain and be
answerable for the consequences of decisions and actions they have
made on behalf of the community it serves.

Accountability comes in various forms: political, hierarchical,

and managerial accountability. Political accountability refers to the
accountability of public officials to the people they represent.
Hierarchical accountability refers to the ordered accountability of the
various agencies and their respective officers and personnel in
relation to their program objectives. Managerial accountability refers
to employee accountability based on organization and individual
performance. A system of rewards and punishment must be in place
to strengthen the processes and institutions of governance.

The Philippines in the recent years had endeavored to comply

with the requirements of accountability. It had put in action the
concept of political accountability as it held answerable erring public
officials involved in graft and corruption and for acts contrary to the
mandate of the constitution. It had also strengthened parliamentary
scrutiny through legislative investigations and creation of special
committees exercising oversight functions. The Office of the
Ombudsman, considered as the public watchdog, has become ever so
active in investigating and prosecuting graft and plunders cases.
Citizen’s Charter, as required by ARTA, was also an important tool in
promoting professional public service values. In this area, Philippine
governance has done relatively well.

Theories of Governance

If Max Weber and Woodrow Wilson were to suddenly appear on the

landscape of modern public administration, normative theories in hand, it is
likely they would be unable to recognize the field of governance. The
comprehensive, functionally uniform, hierarchical organizations governed by
strong leaders who are democratically responsible and staffed by neutrally
competent civil servants who deliver services to citizens – to the extent they

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ever existed – are long gone. They have been replaced byan ‘organizational
society’ in which many important services are provided through multi
organizational programs. These programs are essentially “interconnected
clusters of firms, governments, and associations which come together within
the framework of these programs” (Hjern and Porter, 1981, pp. 212-213).

These implementation structures operate within a notion of governance

about which a surprising level of consensus has been reached. There is a
pervasive, shared, global perception of governance as a topic far broader than
‘government’; the governance approach is seen as a “new process of governing,
or a changed condition of ordered rule; or the new method by which society is
governed” (Stoker, 1998, p. 17).

Similarly, in the scholarship that has followed the ‘Reinventing

Government’ themes of public effectiveness; much has been written of New
Public Management practices by which governance theory is put into action
(Mathiasen, 1996; Lynn, 1996, 1998; Terry, 1998; Kelly, 1998; Peters and Pierre,
1998).

In this complex, devolved mode of service delivery, the unit of analysis

for some students of policy implementation is the network of nonprofit
organizations, private firms and governments. As Milward and Provan note,
in policy arenas such as health, mental health, and welfare, "...joint production
and having several degrees of separation between the source and the user of
government funds...combine to ensure that hierarchies and markets will not
work and that networks are the only alternative for collective action" (2000, p.
243).

The discussions below describe the relationship of governance and other

Public Administration theories, the New Public Management, in particular.
The (mostly European) literature on governance and the increasingly
international scholarship on New Public Management (NPM) describe two
models of public service that reflect a ‘reinvented’ form of government which
is better managed, and which takes its objectives not from democratic theory
but from market economics (Stoker, 1998).

While some use the terms interchangeably (for example, Hood, 1991),
most of the research makes distinctions between the two. Essentially,
governance is a political theory while NPM is an organizational theory (Peters
and Pierre, 1998). As Stoker describes it, Governance refers to the development

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of governing styles in which boundaries between and within public and private
sectors have become blurred. The essence of governance is its focus on
mechanisms that do not rest on recourse to the authority and sanctions of
government….Governance for (some) is about the potential for contracting,
franchising and new forms of regulation. In short, it is about what (some) refer
to as the new public management. However, governance …is more than a new
set of managerial tools. It is also about more than achieving greater efficiency
in the production of public services (1998, p. 17-18). Peters and Pierre agree,
saying that governance is about process, while NPM is about outcomes (1998,
p. 232). Governance is ultimately concerned with creating the conditions for
ordered rule and collective action (Stoker, 1998; Peters and Pierre, 1998;
Milward and Provan, 2000). As should be expected, all efforts to synthesize the
literature draw from theories found in the separate traditions. Berman owes
debts to Van Meter and Van Horn (1975, 1976) and Goggin, et al (1990), among
others. See Kaboolian (1998) for a description of reform movements in the
public sector that collectively comprise

“New Public Management” (NPM). I adopt her definition of NPM as a

series of innovations that – considered collectively – embody public choice
approaches, transaction-cost relationships, and preferences for efficiency over
equity. notes, the outputs of governance are not different from those of
government; it is instead a matter of a difference in processes (1998, p. 17).

Governance refers to the development of governing styles in which

boundaries between and within public and private sectors have become
blurred. The essence of governance, and its most troublesome aspect, according
to its critics, is a focus on mechanisms that do not rest on recourse to the
authority and sanctions of government (Bekke, et al, 1995; Peters and Pierre,
1998; Stoker, 1998; Rhodes, 1996, 1997). Stoker (1998, p. 18) draws five
propositions to frame our understanding of the critical questions that
governance theory should help us answer. He acknowledges that each
proposition implies a dilemma or critical issue.

1. Governance refers to institutions and actors from within and beyond

government. (But there is a divorce between the complex reality of decision-
making associated with governance and the normative codes used to explain
and justify government). The question, as it relates to policy implementation,
is one of legitimacy. The extent to which those with decision-making power are
seen to be legitimate (in the normative sense) will directly impact their ability
to mobilize resources and promote cooperation and build and sustain

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partnerships. Thus, the normative dilemma has pragmatic overtones. Beetham
suggests that for power to be legitimate it must conform to established rules;
these rules must be justified by adherence to shared beliefs; and the power must
be exercised with the express consent of subordinates (1991, p. 19).

2. Governance identifies the blurring of boundaries and responsibilities for

tackling social and economic issues. This shift in responsibility goes beyond
the public-private dimension to include notions of communitarianism and
social capital. (However, blurring of responsibilities can lead to blame
avoidance or scapegoating). An interesting research area that has grown in
scope and importance following the implementation of welfare reform is the
study of faith-based organizations’ role and impact in service delivery. Public
agencies have not merely endorsed or encouraged this partnership, but in some
cases have institutionalized these arrangements. This suggests a shift in
responsibility beyond the more traditional notions of contracting out and
privatization. At the same time, all of these activities contribute to uncertainties
on the part of policy makers and the public about who is in charge and who
can be held accountable for performance outcomes. Implementation theory
must attend to the nature and impact of responsibility and accountability.

3. Governance identifies the power dependence involved in the relationships

between institutions involved in collective action. Organizations are
dependent upon each other for the achievement of collective action, and thus
must exchange resources and negotiate shared understandings of ultimate
program goals. The implementation literature is replete with studies of
coordination barriers and impacts (for example, Jennings and Ewalt, 1998).
(Nonetheless, power dependence exacerbates the problem of unintended
consequences for government because of the likelihood of principal-agent
problems.) For implementation scholarship to contribute to a greater
understanding of governance relationships, arrangements for minimizing (and
impacts of) game-playing, subversion, creaming and opportunism must be
explored.

4. Governance is about autonomous self-governing networks of actors. (The

emergence of self-governing networks raises difficulties over accountability).
Governance networks, in Stoker’s terms, “involve not just influencing
government policy but taking over the business of government” (1998, p. 23).
The “hollow state” that networks have triggered (Milward, 1996; Milward and
Provan, 2000) raises questions about how government can manage public
programs when they consist largely of entities outside the public domain.

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Network theory and governance issues overlap, and they are both directly
linked to questions of implementation.

5. Governance recognizes the capacity to get things done which does not rest
on the power of government to command or use its authority. (But even so,
government failures may occur.) It is in this proposition that we find a natural
progression from the more encompassing theory of governance to the more
prescriptive notions of New Public Management. Stoker notes that within
governance there is a concerted emphasis on new tools and techniques to steer
and guide. The language is taken directly from reinventing themes. The
dilemma of governance in this context is that there is a broader concern with
the very real potential for leadership failure, differences among key partners in
time horizons and goal priorities, and social conflicts, all of which can result in
governance failure. Stoker draws on Good in as he suggests that design
challenges of public institutions can be addressed in part by “revisability
robustness, sensitivity to motivational complexity, public dependability, and
variability to encourage experimentation” (Stoker, 1998, p. 26, quoting from
Goodin, 1996, p. 39-43).

As Peters and Pierre note, “governance is about maintaining public-

sector resources under some degree of political control and developing
strategies to sustain government’s capacity to act” in the face of management
tools that replace highly centralized, hierarchical structures with decentralized
management environments where decisions on resource allocation and service
delivery are made closer to the point of delivery (1998, p. 232).

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Summary
In this chapter, we learned the evolution and starting point of
governance from its simple idea to a complex one. The systems of governance
and its essential roles played in the development side of the country were
discussed thoroughly. We learned that each of the systems of governance have
its own advantages and it has its own share of disadvantages. The adoption of
mixed system is found to be more effective in utilizing the country’s available
resources for its own development. Also, in this chapter we discussed the
importance of governance and government in the administration of limited
resources to propel development and how these concepts relate to each other.
This government, as the major player in the economy, creates sound policies
and laws to create and environment in which businesses will thrive to supply
the essential goods and services as demanded by the people
We also learned that processes and players of governance like the
government, private sector and civil societies have interdependent and
interrelated relationship with each other. We learned that government is the
major player in the development side of the country. A lousy and corrupt
government would mean less opportunity and less development for the people
and the community. A government which espouses good governance results
to more opportunities, more development and progressive community.
Indicators of good governance were also discussed as to its importance
and relevance in the administration of limited resources and to achieving
country’s collective development goals and objectives. These indicators serve
as warning device or red flags of effectiveness and efficiency of governance in
which a government must seriously consider.

Keywords:
Governance Government Centrally Planned System
Free-Market System Mixed System Public Sector
Civil Society Private Sector Efficiency
Effectiveness Participatory Rule of Law
Transparency Responsiveness Equity and Inclusiveness
Consensus Oriented Accountability
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Self-Check

Identification. In a clear sheet of paper, write the correct answer which

corresponds to the given question or statement.
1. Refers to the act or process of “governing” or “steering”, directing and
controlling a group of people or a state by their political leaders for
common good and development.
2. Refers to central authority or institution which wields power over its
objects and subjects.
3. Is closely related to the concept of decentralization of powers and inter-
sectoral management
4. Is a system in which decisions as to what to produce, how to produce
and its locations, and who are going to produce the basic goods and
services needed by the people are decided by a central body
5. Is a system in which private enterprise rules the market activities.
6. This system of governance is a combination of free-market and centrally
planned systems of governance
7. Always the main actor in governance, whether it is in the corporate,
international, national or local level
8. Sector that serve the community especially during disasters and
emergencies by providing medical assistance and disaster support
services
9. the public sector must necessarily tie-up with this sector most especially
in the financial aspects to implement vital projects and programs
10. Structures that disrupt, corrupt and upset the legitimate objectives and
ideals of the society
11. International donors and financial institutions are increasingly basing
their aid and loans on the condition that reforms that ensure ________
12. Signify a broader spectrum of things, such as protection of human rights,
equitable distribution of wealth, enhancement of individual capabilities
and creation of an enabling environment to foster participation and
growth of human potentials
13. Means active involvement of all affected and interested parties in the
decision-making process
14. Means “peace and order,” “absence of corruption,” “impartial and
effective justice system,” “observance and protection of human rights,”
and “clear, publicized, and stable laws.”
15. the valuable resources are utilized, without wasting or underutilizing
any of them
16. The various actors meet the needs of the society means that there is

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17. people are open to information regarding decision-making process and
the implementation of the same
18. Institutions and processes serve all stakeholders in
a timely and appropriate manner
19. All the members of the society, especially the most vulnerable ones or
the grassroots level, must be taken into consideration in policymaking
20. when decisions are made after taking into consideration the different
viewpoints of the actors of the society

In the matrix below, write at least five (5) advantages, five (5) disadvantages of
and example country which adopt systems of governance. Your answer should
be in bullet form (45 points).
System of Example
Advantages Disadvantages
Governance Country
Centrally - - -
Planned - - -
- - -
- - -
- - -
- - -
Free Market - - -
- - -
- - -
- - -
- - -
- - -
Mixed - - -
- - -
- - -
- - -
- - -
- - -
- - -

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Let’s Analyze
Modified True or False. In a clean sheet of paper, write TRUE of the statement
is correct. Write FALSE if the statement is incorrect. If your answer is TRUE or
FALSE, justify your answer by explaining why the statement is correct or false.
Provide illustrations and/or graphs in answering this part for a comprehensive
answer.
1. The government is the major player in governance and development.
2. The Philippine system of governance allows private sectors to
participate in the development of different sectors of society
3. Civil society does not have a role to play in the development of the
country
4. Centrally planned system of governance is good especially to big
countries like the United States.
5. International organizations like human rights watch dog, transparency
international, red cross and among others do not have a role in country’s
governance.
6. Participation of the people from grass roots or the stakeholders are no
longer necessary when it comes to development ideas.
7. Accountability among public is no longer practiced.
8. Efficiency and effectiveness are measures of good governance.
9. The study of governance provides the foundation for a high-performing
organization
10. Rule of law is important for country’s growth and development.

Essay. Provide illustrations or graphs and cite authors when answering this
portion.
1. In your own words, explain the key importance of governance and its
sectors towards country’s development.
2. Why do think having good governance indicators are important to
country’s development? What is the main use of those indicators? Are
they interrelated with each other?

References
https://isoc.bj/internet-governance-actors-and-intiative-in-
benin/#.XueHi0UzayJ
https://tamayaosbc.wordpress.com/2014/08/17/philosophy-of-law-introduction/
http://www.glawcal.org.uk/glawcal-comments/the-importance-of-good-
governance-for-the-development-of-institutions

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Chapter 2
Government: Roles, Functions, and Structure
for Development

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Government of the People, for the People, and by the People!

Learning Objectives (For Weeks 3-4)

In this chapter, it aims the public administration students to
1. Appreciate the key roles of the government for development
2. Know the different branches of the government and its function

Government and its Branches

As previously discussed, we learned that government irrefragably plays
an essential role in the countryside development. From grassroots to the
national level, from agriculture, infrastructure, economic to social sector,
government is major player in its development. In the Philippines, its set-up is
a presidential form of government wherein the government is co-equally
divided into three (3) branches, namely: The Executive Branch, The Legislative
Branch (Senate and House of Representatives) and the Judiciary.

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The main aim of this government is enshrined in the Philippine
Constitution, the bible of Philippine governance. In its preamble of the
constitution, the Filipino people implore the aid of Almighty God, to build a
just and humane society and establish a Government that shall embody our
ideals and aspirations, promote the common good, conserve and develop our
patrimony, and secure to ourselves and our posterity the blessings of
independence and democracy under the rule of law and a regime of truth,
justice, freedom, love, equality, and peace.
On this background we can therefore say that the government is indeed
a major player in the development. To carry out this vision of the government,
branches of government have specific roles and functions to perform.
One basic corollary in a presidential system of government is the
principle of separation of powers wherein legislation belongs to Congress,
execution to the Executive, and settlement of legal controversies to the
Judiciary. This is to ensure balance of powers and for checks and balance
system.

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Let us start with the EXECUTIVE BRANCH. Executive branch of the
government is composed of the President, the Vice-President, and the Cabinet
members of various agencies and departments of the government. Each
member has a pivotal role to play as enshrined in our Constitution. First, the
President and the Vice-President is elected by the People. Therefore, the
President is the Chief Executive and Chief Implementor of the Philippine Laws,
Policies, and Regulations. He/she is also the official representative of our
country to foreign delegations. Moreover, the President is the Chief Architect
of Foreign Policies. The President is also the Commander-in-Chief the
Philippine Army and the Philippine National Police. The Vice -President, on
the other hand, should help the President to carry out Philippine Development
Plans and Agenda, both for short-term and long-term plans.
The LEGISLATIVE BRANCH of the government is mandated by the
Constitution to enact, amend, and repeal laws of the land for growth, welfare,
and development purposes. This branch of the government is divided into
two chambers, the Philippine Senate (PS) and the House of Representatives
(HoR). The Philippine Senate is composed of 24 senators while the House of
Representatives is composed of 304 representatives. Both chambers have
various committee task to ensure development. All development bills, which
later may become a law, must start with the HoR.
The JUDICIAL Branch of the government evaluates the laws passed by
Congress and or Executive Orders passed by the Executive Branch. It holds the
power to settle controversies involving rights that are legally demandable and
enforceable. This branch determines whether there has been a grave abuse of
discretion amounting to lack or excess of jurisdiction on the part and
instrumentality of the government. It is made up of a Supreme Court, Court of
Appeals, Regional Trial Courts, Municipal Trial Courts, and other Quasi-
Judicial Courts.
When it comes to development issues, these three are interdependent
and interrelated with each other. For instance, when the executive branch
wants to pass a vital law of land (e.g. increase in income tax), the idea must
pass through the scrutiny and deliberation of the legislative branch of the
government. A sponsor from the HoR or from the PS must initiate such
intention from the executive department to become a bill. Only after a careful
and thorough deliberation, series of consultation among stakeholders
involved, and technical and legal implications a bill will be forwarded to the
President for signing into law. IF there are legal obstacles in the law passed, the
any concerned party can question its legality and constitutionality before the
Supreme Court of the Philippines.

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Line Agencies of the Government

The following are the line agencies of the government which meet the
needs of the citizenry. These agencies have specific functions to perform for
growth and development of the country.

Executive Secretary is the head and highest-ranking official of the Office of

the President of the Philippines and a member of the Cabinet of the
Philippines. The office-holder has been nicknamed as the "Little President"
due to the nature of the position. It was given the mandate "to directly assist
the President in the management of affairs of the government as well as to
direct the operations of the Executive Office." It is headed by the Executive
Secretary.

Department of Agrarian Reform - the executive department of

the Philippine Government responsible for the redistribution of agrarian
land in the Philippines.

Department of Agriculture - is the executive department of the Philippine

government responsible for the promotion of agricultural and fisheries

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development and growth

Department of Budget and Management is an executive body under the

Office of the President of the Philippines. It is responsible for the sound and
efficient use of government resources for national development and also as
an instrument for the meeting of national socio-economic and political
development goals.

Department of Education is the executive department of the Philippine

government responsible for ensuring access to, promoting equity in, and
improving the quality of basic education. It is the main agency tasked to
manage and govern the Philippine system of basic education. It is the chief
formulator of Philippine education policy and responsible for the Philippine
primary and secondary school systems.

Department of Energy is the executive department of the Philippine

Government responsible for preparing, integrating, manipulating,
organizing, coordinating, supervising and controlling all plans, programs,
projects and activities of the Government relative to energy exploration,
development, utilization, distribution and conservation

Department of Environment and Natural Resources is the executive

department of the Philippine government responsible for governing and
supervising the exploration, development, utilization, and conservation of
the country's natural and environmental resources
Department of Finance is the executive department of the Philippine
government responsible for the formulation, institutionalization and
administration of fiscal policies, management of the financial resources of
the government, supervision of the revenue operations of all local
government units, the review, approval and management of all public sector
debt, and the rationalization, privatization and public accountability of
corporations and assets owned, controlled or acquired by the government

Department of Foreign Affairs is the executive department of

the Philippine government tasked to contribute to the enhancement
of national security and the protection of the territorial integrity and
national sovereignty, to participate in the national endeavor of sustaining
development and enhancing the Philippines' competitive edge, to protect
the rights and promote the welfare of Filipinos overseas and to mobilize

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them as partners in national development, to project a positive image of the
Philippines, and to increase international understanding of Philippine
culture for mutually-beneficial relations with other countries.

Department of Health is the executive department of the Government of the

Philippines responsible for ensuring access to basic public health services by
all Filipinos through the provision of quality health care and the regulation
of all health services and products. It is the government's over-all technical
authority on health

Department of Human Settlements and Urban Development is

the executive department of the Philippine government responsible for the
management of housing and related development in the Philippines

Department of Information and Communications Technology is

the executive department of the Philippine government responsible for the
planning, development and promotion of the country's information and
communications technology (ICT) agenda in support of national
development.

Department of Interior and Local Government is the executive

department of the Philippine government responsible for promoting peace
and order, ensuring public safety and strengthening local government
capability aimed towards the effective delivery of basic services to the
citizenry

Department of Justice is under the executive department of the Philippine

government responsible for upholding the rule of law in the Philippines. It
is the government's principal law agency, serving as its legal counsel and
prosecution arm.

Department of Labor and Employment is the executive department of

the Philippine Government mandated to formulate policies, implement
programs and services, and serve as the policy-coordinating arm of the
Executive Branch in the field of labor and employment. It is tasked with the
enforcement of the provisions of the Labor Code

Department of National Defense is the executive department of

the Philippine government responsible for guarding against external and
internal threats to peace and security in the country. The Department of

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National Defense exercises executive supervision over the Armed Forces of
the Philippines (AFP), the Office of Civil Defense (OCD), the Philippine
Veterans Affairs Office (PVAO), the National Defense College of the
Philippines (NDCP), the Government Arsenal (GA), the Philippine
Aerospace Development Corporation (PADC), and Veterans Memorial
Medical Center (VMMC). It is also responsible for disaster preparation and
management in the country

Department of Public Works and Highways is the executive department of

the Philippine government solely vested with the Mandate to “be the State's
engineering and construction arm” and, as such, it is “tasked to carry out the
policy” of the State to “maintain an engineering and construction arm and
continuously develop its technology, for the purposes of ensuring the safety
of all infrastructure facilities and securing for all public works and highways
the highest efficiency and the most appropriate quality in construction” and
shall be responsible for the planning, design, construction and maintenance
of infrastructure facilities, especially national highways, flood control and
water resources development systems, and other public works in accordance
with national development objectives,” provided that, the exercise of which
“shall be decentralized to the fullest extent feasible

Department of Science and Technology is the executive department of the

Philippine Government responsible for the coordination of science and
technology-related projects in the Philippines and to formulate policies and
projects in the fields of science and technology in support of national
development.
Department of Social Welfare and Development is the executive
department of the Philippine Government responsible for the protection of
the social welfare of rights of Filipinos and to promote the social
development.

Department of Tourism is the executive department of the Philippine

government responsible for the regulation of the Philippine tourism
industry and the promotion of the Philippines as a tourist destination

Department of Trade and Industry is the executive department of

the Philippine Government tasked as the main economic catalyst that
enables innovative, competitive, job generating, inclusive business, and
empowers consumers. It acts as catalyst for intensified private sector activity
in order to accelerate and sustain economic growth through comprehensive
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industrial growth strategy, progressive and socially responsible trade
liberalization and deregulation programs and policymaking designed for
the expansion and diversification of Philippine trade – both domestic and
foreign.
Department Order No. 19-18, s. 2019, laid out the organizational structure
of the Department into the following functional groups: Competitiveness
and Innovation Group (CIG); Consumer Protection Group (CPG); Industry
Development and Trade Policy Group (IDTPG); Management Services
Group (MSG); Regional Operations Group (ROG); and the Trade
Promotions Group (TPG).
Its hierarchical organization include 27 foreign trade service posts, 17
regional offices (including Negros Island Region), 87 provincial/city/area
offices, 12 bureaus, 4 attached agencies, 7 attached corporations, and 8
services offices.

Department of Transportation is the executive department of

the Philippine government responsible for the maintenance and expansion
of viable, efficient, and dependable transportation systems as effective
instruments for national recovery and economic progress. It is responsible
for the country's land, air, and sea communications infrastructure

National Economic and Development Authority is an independent cabinet-

level agency of the Philippine government responsible for economic
development and planning. It is headed by the President of the
Philippines as chairman of the NEDA board, with the Secretary of
Socioeconomic Planning as vice-chairman. A number of Cabinet members,
the Governor of the Central Bank, the Chairman of the Metropolitan Manila
Development Authority, the Governor of the Autonomous Region in
Muslim Mindanao, the Chairman of the Commission on Information and
Communications Technology, the Chairman of the Subic-Clark Area
Development Corporation, and the National President of the Union of Local
Authorities of the Philippines are members of the NEDA Board.

NEDA Board Executive Committee

The NEDA Board ExCom was reactivated and reorganized by virtue of

Administrative Order No. 8, s. 2017 (Rationalizing the Composition of the
National Economic and Development Authority Board, the NEDA Board
Executive Committee, and the Investment Coordination Committee).

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The powers and functions of the NEDA Board ExCom are as follows:

1. Provide policy direction and resolve policy issues involving few

agencies or a specific socio-economic sector, without the necessity of
convening the entire NEDA Board, and in accordance with existing
laws, rules and regulations;
2. Approve development plans and programs consistent with the policies
set by the President of the Philippines; and
3. Confirm ICC-approved projects which are classified as extremely urgent
by the ICC.

The NEDA Board ExCom is composed of the President as the Chairperson,

the Secretary of Socioeconomic Planning as Vice-Chairperson, and the
following as members: the Executive Secretary, the Cabinet Secretary,
the Secretary of Finance and the Secretary of Budget and Management.

The NEDA is the country’s premier social and economic development planning
and policy coordinating body primarily responsible for formulating
continuing, coordinated and fully integrated social and economic policies,
plans and programs. The powers and functions of the NEDA reside in the
NEDA Board.

Under Executive No. 230 (Reorganizing the National Economic and Development
Authority), the President may revise the membership of the NEDA Board
whenever the same is deemed necessary for the effective performance of the
Board’s functions through an administrative or memorandum order. Pursuant
to the said provision, the membership of the NEDA Board has been repeatedly
amended throughout the different administrations.

Development Budget Coordinating Committee

The DBCC is composed of the Secretary of Budget and Management, as

chairman; the Director-General of the NEDA Secretariat, as co-chairman; and
the Executive Secretary, Secretary of Finance and the Governor of the Central
Bank of the Philippines, as members.

The DBCC recommends to the President the following:

a. Level of annual government expenditures and the ceiling of government

spending for economic and social development, national defense, and
government debt service;

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b. Proper allocation of expenditures for each development activity
between current operating expenditures and capital outlays; and;
c. Amount set to be allocated for capital outlays broken down into the
various capital or infrastructure projects.

President
Chairperson

NEDA Secretary
Vice-Chairperson

Members:
Executive Secretary, Cabinet Secretary, Secretaries of
DBM, DOE, DOF, DPWH, DOTr and DTI, MinDA, and BSP
Governor

DBCC InfraCom SDC CTRM RDCom NLUC ICC

RDC

PDC

MDC

CDC
BDC

Figure 1. NEDA Board Structure

Source: http://www.neda.gov.ph/functions-and-organizations/

Infrastructure Committee (InfraCom)

The InfraCom is composed of the Director-General of the NEDA Secretariat as

Chairman; Secretary of DPWH as Co-Chairman; and the Executive Secretary,
the Cabinet Secretary, and the Secretaries of DOTr, DBM, DOF, DTI, DOE,
Department of Agriculture (DA), Department of Tourism (DOT), and
Department of Information and Communications Technology as members. The
InfraCom performs the following functions:
a. Advises the President and the NEDA Board on matters concerning
infrastructure development, including highways, airports, seaports and
shore protection; railways; power generation, transmission and

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distribution; telecommunications; irrigation, flood control and drainage,
water supply and sanitation; national buildings for government offices;
hospitals and related buildings; state colleges and universities,
elementary, and secondary school buildings; and other public works;
b. Coordinates the activities of agencies, including government-owned
and controlled corporations involved in infrastructure development;
and
c. Recommends to the President necessary government policies, programs
and projects concerning infrastructure development consistent with
national development objectives and priorities.

Investment Coordinating Committee (ICC)

Also covered in the rationalization of composition under AO No. 8 s. 2017, the

ICC consists of the Secretary of DOF as Chairman; the Secretary of
Socioeconomic Planning and NEDA Director-General, as Co-Chairman; and
the Executive Secretary, the Cabinet Secretary, the Secretaries of DBM, DOE,
DTI, and the Governor of BSP as members. The ICC performs the following
functions:
a. Evaluates the fiscal, monetary, and balance of payments; implications of
major national projects; and recommends to the President the timetable
of their implementation on a regular basis; This is similar to trading such
as forex trading.
b. Advises the President on matters related to the domestic and foreign
borrowings program; and
c. Submits a status of the fiscal, monetary and balance of payments
implications of major national projects.

Social Development Committee

The Committee is composed of the Secretary of Labor and Employment

(DOLE) as Chairman; the Director-General of the NEDA Secretariat as Co-
Chairman; and the Executive Secretary, the Cabinet Secretary, the Secretaries
of DA, Education (DepEd), Interior and Local Government (DILG), Agrarian
Reform (DAR), Social Welfare and Development (DSWD), Chairpersons of
Housing and Urban Development Coordinating Council (HUDCC), National
Anti-Poverty Commission, and Commission on Higher Education; and
Director General of the Technical Education and Skills Development Authority
as members.

The SDC performs the following functions:

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a. Advises the President and the NEDA Board on matters concerning
social development, including education, manpower, health and
nutrition, population and family planning, housing, human settlements,
and the delivery of other social services.
b. Coordinates the activities of government agencies concerned with social
development; and
c. Recommends appropriate policies, programs and projects consistent
with the national development objectives.

Committee on Tariff and Related Matters (CTRM)

The CTRM is composed of the Secretary of DTI as Chairman, with the Director-
General of the NEDA as Co-Chairman. Its members are the Executive
Secretary; the Secretaries of DA, DBM, DOLE, DAR, DOF, Foreign Affairs, and
Environment and Natural Resources (DENR); the Governor of BSP; and the
Chairman of the Tariff Commission. The CTRM performs the following
functions:
a. Advises the President and the NEDA Board on Tariff and related
matters and on the effects on the country of various international
developments;
b. Coordinates agency positions and recommends national positions for
international economic negotiations; and
c. Recommends to the President a continuous rationalization program for
the country’s tariff structure.

Regional Development Committee (RDCom)

The RDCom was created by virtue of Executive Order No. 257 issued
on December 15, 2003. It is composed of the NEDA Director-General as Chair.
Its member are the Secretaries of the DBM and DILG, Regional Development
Council (RDC) Chair or Co-Chair each coming from Luzon, Visayas, and
Mindanao, and four (4) regional development experts from the private sector
and academe. The RDCom performs the following functions:
a. Formulates and monitors the implementation of policies that reduce
regional growth disparities, and promote rational allocation of resources
among regions;
b. Serve as clearing house for key regional development policy/programs
proposals which impact on two or more regions;
c. Formulates and monitor implementation of the framework for regional
development of the Philippine Development Plan;

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d. Directs the formulation and review guidelines for the regional allocation
of agency budgetary resources;
e. Periodically reviews the viability of the regional configuration of the
country and recommend to the President the re-delineation of regions,
as may be necessary; and
f. Periodically reviews the composition, structure and operating
mechanism of the RDCs and recommend to the President changes as
may be necessary.

National Land Use Committee (NLUC)

The NLUC was created by virtue of EO Nos. 770 and 770-A on December 1,
2008 and September 30, 2009, respectively. Composed of NEDA as the Chair,
with Secretaries of DENR, DA, DAR, DTI, DPWH, DOTr, DOE, DILG, DOT,
Department of Justice, Department of Science and Technology, Chairpersons
of the HUDCC/Housing and Land Use Regulatory Board, and the National
Commission on Indigenous Peoples, Presidents of the League of Provinces of
the Philippines, the League of Cities of the Philippines, and the League of
Municipalities of the Philippines, and two (2) private sector representatives as
members. The NLUC performs the following functions:
a. Advise the President on matters concerning land use and physical
planning;
b. Formulate a national physical framework plan and other inter-sectoral
policies and programs that guide the rational utilization and
management of the country’s land and other physical resources, and the
preparation of sub-national physical framework plans;
c. Promote the integration of land use and physical planning policies,
plans and programs, including disaster risk management, into national
socioeconomic plans and programs;
d. Decide and resolve land use policy conflicts among agencies of the
national government;
e. Establish and maintain, in conjunction with various appropriate
government agencies, a database system which would identify and
classify the present and possible uses of specific land areas, public and
private, comprising the total land resource of the nation; and
f. Provide policy directions to the Regional Land Use Committee in the
performance of their physical planning functions.

Regional Development Council (RDC) is the highest planning and policy-

making body in the region. It serves as the counterpart of the National
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Economic and Development Authority (NEDA) Board at the sub-national level.
It is the primary institution that coordinates and sets the direction of all
economic and social development efforts in the region. It also serves as a forum
where local efforts can be related and integrated with regional and national
development activities.

The creation of the RDC answers the need for a single planning body whose
main concern is the overall socio-economic development of the region. This
was an offshoot of the implementation of the Integrated Reorganization Plan
of 1972 which divided the country into administrative regions.

Regional development planning is necessary to address the uneven economic

and social development in the country. This stems from the recognition that
growth and advancement over the years remain unevenly distributed and that
progress has been concentrated in a few regions.

Provincial Development Council (PDC); Municipal Development Council

(MDC); City Development Council (CDC) or otherwise known as Local
Development Councils. The Local Development Councils shall assist local
legislative bodies in setting the direction of economic and social development
and coordinating development efforts in their respective territorial
jurisdictions. These Councils shall:

(i) Formulate long-term, medium term, and annual socio-economic

development plan and policies;

(ii) Formulate the medium-term and annual public investment programs;

(iii) Appraise and prioritize the socio-economic development programs

and projects;

(iv) Formulate local investment incentives to promote the inflow and

direction of private investment capital;

(v) Coordinate monitor and evaluate programs and project; and

(vi) Perform such other functions as may be provided for by law or

competent authority

Barangay Development Council (BDC) shall also assist the local legislative
bodies in setting the direction of economic and social development and
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coordinating development efforts in their respective territorial jurisdictions

The Barangay Development Council shall have the following functions:

(i) Mobilize citizens' participation in local development efforts,

(ii) Identity programs and projects, based on local requirements:

(iii) Monitor and evaluate program and project implementation; and

(iv) Perform such other functions as may be provided for by law or competent
authority

The state has its own inherent powers for regulation and development
of the country. These powers: police powers, eminent domain and taxation
powers are essential tools of the government to manage its limited resources
and to instill order among the populace. Without these powers, government is
immobile to initiate, implement and carry out specific projects, programs and

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functions and roles.

Public Goods and Services – these are goods and services which the
government offered for free or at a subsidized rate. These goods and services
are deemed important for the whole population for without these marginalized
sectors have to buy it from the private providers. These goods and services
might not also provided by the private entities (e.g. common defense, public
education, public health, public doctors and hospitals, public lawyers public
infrastructure like roads, bridges, ports and among others).

Figure 3. Public services offered by the government to people

Public goods and services have two major characteristics:
a) Non-Rivalrous – a public good/service is non-competing from other
public goods and services. Since, public resources are limited, they
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should not compete from each other. Instead, they must complement
with each other for rationalization and specialization purpose. Example:
a state university in Davao City offers BS in Engineering degree
program. UP Mindanao should not offer the same degree program since
it will compete with other public institution.
b) Non-exclusion – as much as possible everyone should avail of the public
goods and services offered by the government to people, without
prejudice to color and race. This rule excludes no one in availing any
public goods and services. However, it must be remembered that public
institutions, as mandated by law, have the discretion and power to
prioritize people which can avail their limited goods and services.
Specific guidelines and criteria must have to be met in order for the
people to avail such goods and services offered.

Reasons for Government Intervention

a) Market Failures occur when markets do not efficiently allocate
resources in a manner that achieves the greatest possible level of
satisfaction.

Reasons for market failure include:

✓ positive and negative externalities,
✓ environmental concerns,
✓ lack of public goods, under provision of merit goods, and
✓ overprovision of demerit goods, and abuse of monopoly power.
✓ Politician

b) Market Inefficiency/Control arises when buyers or sellers can exert

influence over the price of a good and/or the quantity exchanged.
It is also the ability to control the market, especially the market price,
prevents a market from equating demand price and supply price.
In this situation, supply-side allows sellers to set a demand price, the
value of the good produced, above the value of goods not produced.

Examples of market control on the supply:

1.Monopoly - a market with a single seller.
2. Oligopoly - a market with a small number of large sellers.

Market control on the demand side - allows buyers to set a supply price,
the value of goods not produced, below the value of the good produced.
Example of market control on the demand

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1. Monopsony - a market with a single buyer.
2. Oligopsony - a market with a small number of large buyers.
Common examples of markets with supply-side or demand-side control
include:
1. City-wide electrical distribution (monopoly),
2. Automobile manufacturing (oligopoly),
3. Employment in a company town (monopsony), and
4. Employment in professional sports (oligopsony).

c) Government Expenditures are used either to purchase a portion of

gross domestic product (government purchase) or as gifts to members
of the other sectors (transfer payments).
Two broad categories:
1. Purchase - the government sector annually purchase about 10 to 15
percent of the final goods and services produced by the economy.
2. Transfers - the government sector also devotes a portion of
expenditures to transfer payments.

Sources of Government’s Fund

Governance is a crucial
component in the smooth
running of country affairs. Poor
governance would have far
reaching ramifications on the
entire country with a heavy toll
on its economic growth. Good
governance ensures that the
money collected is utilized in a
manner that benefits citizens of
the country. This money also goes to pay public servants, police officers,
members of parliaments, the postal system, and others. The following are the
sources of government’s fund:
a) Tax/ tariff - A means by which governments finance their expenditure
(i.e. projects and programs) by imposing charges on citizens’ and
corporate entities’ income received. Without taxes, government cannot
function properly e.g. providing health care, free education, salary to
civil servants, constructing public infrastructure among others
b) Seigniorage – is the difference between the cost of producing coins or
bills and its actual value. Seigniorage is another source of government’s

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income when they mint or print new coins or bills
c) Borrowing – to finance deficit or shortage of budget, the government
can source out funds through borrowing. Borrowing can be from
domestic banks e.g. Land Bank, Development Bank of the Philippines
or through international banks like the World Bank or the International
Monetary Fund.
d) Public Enterprises – are public entities owned by the government but
run like a private entity, manage by private entity, and use corporation
laws. Example of public enterprises are the Government Owned and
Controlled Corporations like PCSO, PhilHealth, PAGCOR, GSIS, SSS,,
PAG-IBIG, State Universities and among others.
e) Privatization – is a way of the government selling its public enterprises
for income generation purpuses

Summary
In this chapter, we learned the
three co-equal branches of the
government and its roles for
development. The specific functions
of these branches and its
interdependent nature with other co-
equal branches were established and
discussed. We also learned the
various line agencies and
instrumentalities of the government
to effect changes and development to
our community and country as a whole.
The NEDA Board Executive Committee and functions were also
presented. The process of development planning through the NEDA Board
Structure is also presented. From the Barangay level, City/Municipal level,
Provincial level to Regional level to the National level were hierarchically
presented. Various coordinating committees for development and its roles
were also presented. Big infrastructure projects need not to go with the
Barangay level but automatically assessed by technical personnel of the
regional development committees to the national level for its viability.
We also learned why the government intervenes in the market, the
various sources of government’s fund and the public goods & services offered.
Keywords:
Judiciary Executive Legislative DAR DA DBM DTI
DoE DENR DOF DFA DOH DOTr DHSUD
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DICT DILG DOJ DOLE DOT DSWD DOST
DPWH DND NEDA Local Dev’t Councils DepEd
Eminent Domain Police Powers Taxation Seigniorage
Public Enterprise Executive Secretary President Market Failure
Market control non-rivalry non-exclusion ICC Govt Expenditure
Public Goods and Services

Sources:
https://www.officialgazette.gov.ph/division-of-labor-the-pms-executive-office-
and-cabinet-secretary/
https://lawphil.net/executive/execord/eo1988/eo_319_1988.html
https://pia.gov.ph/branches-of-govt
http://www.concourt.am/armenian/legal_resources/world_constitutions/constit/
philipin/philip-e.htm
http://www.neda.gov.ph/functions-and-organizations/

Self-Check
Multiple Choices. Among the given choices, select the best answer for the
given statement. Write your answer on a separate sheet of paper.

Judiciary Executive Legislative DAR DA DBM DTI

DoE DENR DOF DFA DOH DOTr DHSUD
DICT DILG DOJ DOLE DOT DSWD DOST
DPWH DND NEDA Local Dev’t Councils DepEd
Eminent Domain Police Powers Taxation Seigniorage
Public Enterprise Executive Secretary President Market Failure
Market control non-rivalry non-exclusion ICC Govt Expenditure
Public Goods and Services
1. A branch of the government which is mandated by the Constitution to
enact, amend, and repeal laws of the land for growth, welfare, and
development purposes
2. He/she is also the official representative of our country to foreign
delegations.
3. Branch of the government is mandated by the Constitution to enact,
amend, and repeal laws of the land for growth, welfare, and
development purposes
4. The branch of the government which implements the laws of the land
5. The head and highest-ranking official of the Office of the President of
the Philippines and a member of the Cabinet of the Philippines
6. is the executive department of the Philippine government responsible
for the regulation of the Philippine tourism industry and the promotion
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of the Philippines as a destination
7. formulate policies and projects in the fields of science and technology
in support of national development
8. acts as catalyst for intensified private sector activity in order to
accelerate and sustain economic growth through comprehensive
industrial growth strategy, progressive and socially responsible trade
liberalization and deregulation programs and policymaking designed
for the expansion and diversification of Philippine commerce
9. responsible for preparing, integrating, manipulating, organizing,
coordinating, supervising and controlling all plans, programs, projects
and activities of the Government relative to energy exploration,
development, utilization, distribution and conservation
10. responsible for the formulation, institutionalization and administration
of fiscal policies, management of the financial resources of the
government, supervision of the revenue operations of all local
government units,
11. tasked to participate in the national endeavor of sustaining
development and enhancing the Philippines' competitive edge, to
protect the rights and promote the welfare of Filipinos overseas and to
mobilize them as partners in national development, and to increase
international understanding of Philippine culture for mutually-
beneficial relations with other countries
12. responsible for ensuring access to, promoting equity in, and improving
the quality of basic education.
13. responsible for governing and supervising the exploration,
development, utilization, and conservation of the country's natural and
environmental resources
14. responsible for ensuring access to basic public health services by all
Filipinos through the provision of quality health care and the regulation
of all health services and products
15. responsible for promoting peace and order, ensuring public safety and
strengthening local government capability aimed towards the effective
delivery of basic services to the citizenry
16. mandated to formulate policies, implement programs and services, and
serve as the policy-coordinating arm of the Executive Branch in the field
of labor and employment.
17. responsible for guarding against external and internal threats to peace
and security in the country
18. responsible for the protection of the social welfare of rights of Filipinos
and to promote the social development

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19. is an independent cabinet-level agency of the Philippine government
responsible for economic development and planning.
20. The chairperson of NEDA Board
21. the difference between the cost of producing coins or bills and its actual
value.
22. public entities owned by the government but run like a private entity,
manage by private entity, and use corporation laws
23. arises when buyers or sellers can exert influence over the price of a good
and/or the quantity exchanged
24. Characteristic of public good where no one is excluded
25. Characteristic of public good where it competes with no one
26. imposing charges on citizens’ and corporate entities’
27. Evaluates the fiscal, monetary, and balance of payments; implications
of major national projects; and recommends to the President the
timetable of their implementation on a regular basis
28. responsible for upholding the rule of law in the Philippines. It is the
government's principal law agency, serving as its legal counsel and
prosecution arm
29. goods and services which the government offered for free or at a
subsidized rate
30. is a way of the government selling its public enterprises for income
generation purposes

Let’s Analyze
1. In your own words, explain the NEDA Board System and the various roles
of the coordinating committees.
2. What is the main role of local development councils? Do you think they
play pivotal role in country’s planning and development? Provide
examples to your answer.
3. Too much government intervention results to crowding out effect?
4. During the pandemic crisis, do you think your Barangay played an
essential role as prescribed by the law RA 7160? Share some of your
experience, whether good or needs improvement experience!

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Chapter 3
The Roles of Government, Private and
Civil Society Sectors for Development

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Business, labor, and civil society organizations have skills and resources that
are vital in helping to build a more robust global community ~ Kofi Annan

Learning Objectives (For Weeks 5 – 6)

In this chapter, it aims to discuss the
1. Important roles and functions of civil societies towards country’s
development
2. Vital functions of private sector in building a more robust and
competitive community and country.

The Civil Society

The idea of civil society has become more prominent in political and
developmental parlance over the past twenty years. This is mainly due to
successive waves of democratization, beginning from Latin America, the
Central and Eastern European countries (CEE) and spreading across the
developing world, including Africa. Political scientists and practitioners have
come to the realization that it is not just state institutions and policy initiatives
that essentially ensure a high standard of democratic governance but also the
civil society. Good governance, generally, encompasses a broad array of
practices that maximize common good. Some of the attributes of good
governance are democratic practices, rule of law, and respect for human rights.
The Paper will give a cursory look at the various theoretical arguments as to
what constitutes good governance and how civil society plays a role in
ensuring its compliance.

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The Civil Society consists of the complex of citizens and groups outside
government working in the public arena. It is often called as CSOs- civil society
organizations and also sometimes referred to as the Third Sector.

The civil society comprises the academe or schools, NGO’s e.g. Association of
Schools of Public Administration in the Philippines, Inc. (ASPAP, Inc) housed
at the National College of Public Administration and Governance which is
religiously collaborating with Government and NGOs (GOP-UNDP
Programme, Galing-Pook Foundation, Social Watch Philippines, TAN, TI etc.)
in promoting governance and development.). Other civil society groups
include POs and the voluntary groups.

This sector plays an important role in the facilitation and interaction among the
key players of local governance. It mobilizes the various groups or
organizations in the community to participate in planning and decision-
making process.

The Philippines has a large and very vibrant Third Sector with a long
history dating back to its colonial years. The total number of civil society
organizations is estimated to between a low of 249,000 to a high of 497,000
(Cariño, 2002: 84). Ma. Oliva Z. Domingo also discussed in her paper entitled:
Third Sector Governance: Meanings, Issues, and Challenges in the
Philippines”, the Civil Society is the third sector governance.

The extensive use of the term governance in the literature and day-to-day
operations of Third Sector organizations precedes the now current, broader
meaning popularized by the UNDP. Brian O’Connell’s work published in 1985,
identifies governance as a basic role for the boards of voluntary organizations
(1985: 22). An even much earlier work describes alternative governance models
for nonprofit universities (Baldridge et al, 1997). Scholars writing on Third
Sector organizations make fine distinctions between governance and
management (Wood, 1996: 3-4), or even with administration (Lyons, 2001: 123-
124), but affirm that the term governance captures the scope of the “special kind
of management” applicable to these organizations.

Within the broad view of governance, Third Sector organizations play a

key role as they engage in programs and deliver services in areas where
government is absent or where the private sector is not interested in. They
facilitate political and social integration by mobilizing and empowering people
to participate in economic, social, and political activities. Within the Third

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Sector itself, governance generally refers to the exercise of governing functions
by responsible persons. In this sense, the term has an inward looking
perspective, an internal relevance for Third Sector organizations.

Whether in the broad or the internal point of view, Third Sector

organizations are called upon to respond to the challenge of good governance.
In order to do so, the Sector needs to clarify the meanings, issues, and role
expectations associated with the concept of governance.

In local governance, a critical role that the civil society plays is that it
provides the forum for the airing of grievances, complaints, concerns, issues
and problems among the populace. Specifically, it provides voice to the
“inarticulate and the unarticulated”. It also performs some political role in the
community by serving as an instrument of checks and balances on the power
of the state or local government and the business sector behavior. It is seen as
a claim holder of basic human rights. And most of all, it can serve as an
alternative delivery mechanism for the frontline services.

Some civil society organizations engage primarily in the critique of

existing policy and the advocacy of what to them are more appropriate policies
for the good of the nation. In authoritarian regimes which close avenues of
citizen access to policy formulation, some groups may be forced to go
underground and work for the ouster of the regime itself. But even in the most
democratic states, there will be no lack of critics that press for regime change
and drastic policy reversals. NGOs may also go beyond opposition and debate
into competing with government’s own delivery system, demonstrating that
the alternative mechanisms they advocate are capable of being implemented
on the ground.

Other civil society organizations may extend the government’s delivery

system by mobilizing people to prove themselves eligible to receive
government social services, or providing their own services in areas unreached
by the public bureaucracy. The government may complement NGOs in turn by
providing the needed scaling up and referral system for their relatively smaller
programs.

In relations to this, there are other possible directions to strategic

directions for active civil society participation in good governance. In general
terms, this means supporting efforts to promote partnerships between
government and civil society. These maybe in designing, implementing,

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monitoring, and evaluating programs and projects. This can also mean
identifying areas where civil society can either complement or supplement the
efforts of the Government to deliver services, or even serve as alternative
mechanisms altogether. ADB (2005)

Private or Business Sector - Corporate Governance

In governance
parlance, the private/business
sector serves as the engine of
the society. It is an important
collaborator in the economic
development of the
community. It generates jobs
and incomes for the people in
the community. Because of its
resources such as financial
and technical expertise, it can
assist the local government in coming up with an economic plan for the
community and help in the implementation of the plan. It can also provide the
needed resources for the government to enable it to pursue big and wide scale
projects that are beyond the local government’s financial capability. Efficiency
and economy are expected outputs or products of corporate governance. The
state provides a level playing field for those able to compete and turns its
attention to the provisions of safety nets for those unable to do so.
In the field of information technology, the private sector can help the
local government in the development of technologies that would help proper
the growth and development of the economy of the community. In this
connection, the private sector can assist the local government promote the
transfer of technology such as the application of spatial planning and decision
support systems for effective local governance.

The participation of market and civil society in governance adds new

role to the state and that is of building partnerships and linkages to the two
sectors. Moreover, their engagement of the state shifts the social picture from
elite control to active citizenship.

As mentioned earlier, government is one of the key actors in governance.

Other actors involved in governance vary depending on the level of
government that is under discussion. In rural areas, for example, other actors

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may include influential landlords, associations of peasant farmers,
cooperatives, NGOs, research institutes, religious leaders, finance institutions
political parties, the military etc. The situation in urban areas is much more
complex. Figure 1 provides the interconnections between actors involved in
urban governance. At the national level, in addition to the above actors, media,
lobbyists, international donors, multi-national corporations, etc. may play a
role in decision-making or in influencing the decision-making process.

All actors other than government and the military are grouped together
as part of the "civil society." In some countries in addition to the civil society,
organized crime syndicates also influence decision-making, particularly in
urban areas and at the national level.

Similarly, formal government structures are one means by which

decisions are arrived at and implemented. At the national level, informal
decision-making structures, such as "kitchen cabinets" or informal advisors
may exist. In urban areas, organized crime syndicates such as the "land Mafia"
may influence decision-making. In some rural areas locally powerful families
may make or influence decision-making. Such, informal decision-making is
often the result of corrupt practices or leads to corrupt practices.

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(http://www.unescap.org/huset/gg/governance.htm)

In developed and developing countries alike, the state is being

compelled to redefine its role in social and economic activity - to reduce it,
reorient it, reconfigure it. The pressures for change stem from three sources:
• The private sector wants a more conducive market environment and a
better balance between state and market.
• Citizens want increased accountability and responsiveness from
government, as well as greater decentralization.
• Global pressures from supranational and worldwide social and
economic trends are challenging the identity and nature of the state.

Relationships between Governance and Human Development as

performed by each Domain of Governance

Each domain of governance - the state, the private sector and civil
society - has a unique role in promoting sustainable human development.

The State
In countries where electoral processes exist, the state is composed of an
elected government and an executive branch. The state's functions are manifold
- among them, being the focus of the social contract that defines citizenship,
being the authority that is mandated to control and exert force, having
responsibility for public services and creating an enabling environment for
sustainable human development. The latter means establishing and
maintaining stable, effective and fair legal-regulatory frameworks for public
and private activity. It means ensuring stability and equity in the marketplace.
It means mediating interests for the public good. And it means providing
effective and accountable public services. In all four roles, the state faces a
challenge – ensuring that good governance addresses the concerns and needs
of the poorest by increasing the opportunities for people to seek, achieve and
sustain the kind of life they aspire to.

The state, of course, can do much in such areas as upholding the rights
of the vulnerable, protecting the environment, maintaining stable
macroeconomic conditions, maintaining standards of public health and safety
for all at an affordable cost, mobilizing resources to provide essential public
services and infrastructure and maintaining order, security and social
harmony.

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State institutions can also empower the people they are meant to serve –
providing equal opportunities and ensuring social, economic and political
inclusion and access to resources. But people can be empowered only if their
legislatures, electoral processes and legal and judicial systems work properly.
Parliaments of freely and fairly elected members representing different parties
are crucial to popular participation and government accountability. Effective
legal and judicial systems protect the rule of law and the rights of all. Open
elections mean public confidence and trust - and so political legitimacy. States
should also decentralize political and economic systems to be more responsive
to citizens' demands and to changing economic conditions.

In developed and developing countries alike, the state is being

compelled to redefine its role in social and economic activity – to reduce it,
reorient it, and reconfigure it. The pressures for change stem from three
sources:
- The private sector wants a more conducive market environment and a
better balance between state and market.
- Citizens want increased accountability and responsiveness from
government, as well as greater decentralization.
- Global pressures from supranational and worldwide social and
economic trends are challenging the identity and nature of the state

The Private Sector

The state is a big force for development - but it is not the only one. Sustainable
human development depends in part on creating jobs that provide enough
income to improve living standards. Most states now recognize that the private
sector is the primary source of opportunities for productive employment.
Economic globalization is fundamentally changing the ways in which
industries and enterprises operate. In many developing countries, private
enterprise must be encouraged and supported to be more transparent and
competitive in the international marketplace.

Equitable growth, gender balance, environmental preservation, expansion of

the private sector and responsible and effective participation in international
commerce cannot be achieved by the market alone. However, states can foster
private sector development that is sustainable by:

➢ Creating a stable macroeconomic environment.

➢ Maintaining competitive markets.

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➢ Ensuring that the poor (especially women) have easy access to credit.
➢ Nurturing enterprises that generate the most jobs and opportunities.
➢ Attracting investment and helping to transfer knowledge and
technologies, particularly to the poor.
➢ Enforcing the rule of law.
➢ Providing incentives for human resource development.
➢ Protecting the environment and natural resources.

The Civil Society

Civil society also has to protect the rights of all citizens. As the state
and the private sector are being reshaped and their relationships redefined,
civil society is changing in important ways. Unresponsive government and
unrelenting economic and social pressure have undermined some traditional
civil society organizations and strengthened others - and in many cases forced
people to organize in new ways. Civil society is thus more than just society. It
is the part of society that connects individuals with the public realm and the
state - it is the political face of society.

Civil society organizations channel people's participation in economic

and social activities and organize them into more powerful groups to influence
public policies and gain access to public resources, especially for the poor. They
can provide checks and balances on government power and monitor social
abuses. They also offer opportunities for people to develop their capacities and
improve their standards of living - by monitoring the environment, assisting
the disadvantaged, developing human resources, helping communication
among business people.

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More fundamentally, civic networks ease the dilemmas of collective
action by institutionalizing social interaction, reducing opportunism, fostering
trust and making political and economic transactions easier. Well-developed
civic networks also amplify flows of information - the basis for reliable
political, economic and social collaboration and public participation of civil
society members. These relationships and social norms make up a nation's
social capital.

Civil society organizations do not always pursue the qualities of good

governance. Nor are they always the most effective development agents. That
is why states, while recognizing and protecting the democratic rights of civil
society organizations, must also ensure that the rules of law and values that
reflect societal norms are adhered to. Democratic institutions, particularly local
ones, can be important in ensuring that all in society have a voice, as well as
ensuring that there are transparent and fair ways to reach consensus.
Like private enterprises, civil society organizations need adequate
capacities to fulfill their potential. They also need an enabling environment,
including a legislative and regulatory framework that guarantees the right of
association, incentives to facilitate support and ways for civil society
organizations to be involved in public policy-making and implementation.

Strengthening the enabling environment for sustainable human

development
thus depends not only on a state that governs well and a private sector
that provides jobs that generate income. It also depends on civil society
organizations that make political and social interaction easier and that mobilize
society to participate in economic, social and political activities. UNDP (1997)

Apart from three key players of governance above, the Institute on

Governance considers a fourth player, the Media, which provides for a flow of
information between the major players, and between the players and society at
large. However, media, even if not controlled by the state, is part of the private
sector and therefore not a dispassionate player. The relative size and strength
of each of the players varies depending on the history, culture and politics of
the country. There are no firm boundaries between these players (and in fact
they often overlap) because the borders of these sectors are permeable (e.g.
state-owned organizations may have a foot in both government and the private
sector; government-funded NGOs also straddle two camps.

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Summary
The role of private sector and civil society for country’s growth and
development are undeniably pivotal. We learned that private sectors are
institutions which provide the goods and services that public sector cannot
efficiently and effectively deliver. They also can be a partner for change,
generating employment and income to people. Private sector also key essential
role in building up important projects and programs needing large sums of
resources as government has limited resources only. As partners for change,
private sectors see to it that areas of development are filled in.
On the one hand, civil society also has key participation in the
development of the countryside. Civil societies channel people's participation
in economic and social activities and organize them into more powerful groups
to influence public policies and gain access to public resources, especially for
the poor. They can provide checks and balances on government power and
monitor social abuses. They also offer opportunities for people to develop their
capacities and improve their standards of living – by monitoring the
environment, assisting the disadvantaged, developing human resources,
helping communication among businesspeople.
In summation, these two players are hand in hand in partnership with
the government to stimulate and create meaningful changes and development
in the country. Their roles and functions in building a just and humane society
are pivotal and essential.

Let’s Analyze
In a clean sheet of paper, write your understandings on the provided questions.
Make no erasures!
1. Using the Venn Diagram, illustrate and discuss the inter-relationships of the
3 major actors in governance. Substantiate how one actor/player affects the
other and the overall development of the community, society and country in
general. (20 points)
2. In your own perspective, what is view on the role of government in any
governance efforts?
3. Cite at least 3 private sectors you know and their major contributions to
development of SPECIFIC community? Introduce the nature of that private
sector
4. Cite at least 3 civil society movements you know and their major advocacy
to towards specific areas of development. Introduce the nature of that civil
society sector
5. Please watch these Youtube videos in the following order:
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https://www.youtube.com/watch?v=Z5KZhm19EO0&feature=share&fbclid=IwAR2P
JvWm59ZqbN_XMqkE84yvctILNaztEQxMG6w1EcCtdWtReg6fpUYURPs

https://www.youtube.com/watch?v=vD9XJKZmXEs&feature=share&fbclid=IwAR3V
bQhuCUcNwB1nx7IepUsTjlAcok38CahCvDUuUJoJIkjFzuHBAaHNUi8

https://www.youtube.com/watch?v=LDTbx3TVfF4&feature=share&fbclid=IwAR27P
AFwZO2kmM4rUzcyGL3N3myTB3deHeR7LHtQQKFVoSBoIdEdGix-Ijs

From these Youtube videos, make a Reflection and Realization using these
guide questions below:

5. Do you think that profit maximization is the main motivation to

entrepreneurial behavior?

6. Does profit have to be the main motivation of successful business owner?

7. How do businesses strike balance between business interest and social

responsibility?

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Chapter 4 (Weeks 7-8)

Tools of the Government for Development

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Learning Objectives (For Weeks 7-8)

In this chapter, the students of should be able to
1. Understand the use and effects of tools by which the government can
utilize for development of the country
2. Know when to appropriately use these tools for development and
manage the corresponding consequences.

Types of Policy Instruments and Steering Mechanism of the Government

Source: OECD (2001b: 132) and working documents, ProSus.
1. Command and control: licenses /permits; ambient quality standards;
emissions standards; process standards; product standards; prohibition
bans
2. Economic instruments: charges; taxes; tradable emission permits;
tradable quotas; environmental subsidies; deposit-refund systems;
performance bonds; non-compliance fees; resource pricing
3. Liability, damage compensation: strict liability rules; compensation
funds; compulsory pollution insurance; extended producers
responsibility
4. Education and information: education campaigns for the general public;
diffusion of technical information; publicity of sanctions for non-
compliance; eco-labelling
5. Voluntary approaches: unilateral commitments; public voluntary
programmes; negotiated agreements
6. Management and planning: environmental management systems;
zoning; land use
7. Rule steering: laws; regulations; guidelines; sanctions; redistributions of
rights and advantages; public programmes
8. Economy and market steering: taxes; surcharges; fees; subsidies and
other market-directed incentives
9. Normative steering: ideological direction; value campaigns; alternative
scenarios
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10. Educational steering: information campaigns; use of ‘best cases’;
consensus conferences
11. Motivational/emotional steering: advertising and the active use of
symbolic communication
12. Cooperative steering: covenants; charters; voluntary agreements;
negotiations; ‘cooperative management regimes’

Stylized ‘model’ for pursuing sustainable development through

‘Local Agenda 21’
Source: Aalborg Charter, Part III, ICLEI website 1996–97.
1. Recognition of the existing planning and financial frameworks as well
as other plans and programmes
2. The systematic identification, by means of extensive public consultation,
of problems and their causes
3. The prioritization of tasks to address identified problems
4. The creation of a vision for a sustainable community through a
participatory process involving all sectors of the community
5. The consideration and assessment of alternative strategic options
6. The establishment of a long-term local action plan towards
sustainability, which includes measurable targets
7. The programming of the implementation plan towards sustainability,
which includes measurable targets
8. The establishment of systems and procedures for monitoring and
reporting on the implementation of the plan

Elements of a national sustainable development strategy

Source:OECD (2002: Box 3.2, p. 36).

a) Integration of economic, social and environmental objectives, and balance

across sectors, territories and generations:
linking local, national, regional and global priorities and actions
linking the short term to the medium and long term
linking the national, regional and global levels
linking different sectors
coherence between budgets and strategy priorities

b) Broad participation and effective partnerships:

institutionalized channels for communication
access to information for all stakeholders and effective networking

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transparency and accountability
trust and mutual respect
partnerships among government, civil society, private sector and external
institutions
c) Country ownership and commitment:
strong political and stakeholder commitment
sound leadership and good governance
shared strategic and pragmatic vision
strong institution or group of institutions spearheading the process
continuity of the national sustainable development strategy process

d) Developing capacity and enabling environment:

building on existing knowledge and expertise
building on existing mechanisms and strategies
e) Focus on outcomes and means of implementation:
the means to assess and agree priority issues in place
coherence between budget, capacity and strategy priorities
realistic, flexible targets
linked to private sector investment
anchored in sound technical and economic analysis
integrated mechanisms for assessment, follow up, evaluation and
feedback

Key Focus Areas of Government Tools

Sound Development Management Key Milestones
Roles of the State
1. Creating a conducive Enact and enforce laws that
economic environment promote economic competition
Decentralize economic decision
making and stabilize inflation
Reduce public deficit and free
market to set prices for privately
produced goods and services
2. Protecting the Vulnerable Ensure the survival of pension
systems
Create or maintain reasonable
unemployment benefits
Establish and maintain a system of
private health and social insurance
Maintain social assistance

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programs for the

disabled and disadvantaged
3. Improving government Attract qualified, competent,
efficiency and responsiveness honest and realistically paid
individuals into public
service
Establish a civil service system that
relies on merit-based recruitment
and promotion, incentive-based
compensation, and reward-oriented
career paths that are clearly defined
Attract and retain a corps of
professionals who are responsible for
formulating and implementing
economic policies and support them
with good training, appropriate
degree of independence and
professional reward structures.
Protect professional civil servants
from political interference in carrying
out their responsibilities
Establish a civil service system that
is flexible enough to facilitate
communication between the public
and private sectors
4. Empowering people and Establish a conducive institutional
democratizing the political system environment comprising properly
functioning parliaments, legal and
judicial systems, and electoral
processes
5. Decentralizing the Respond quickly to local needs and
administrative system conditions
Redistribute authority,
responsibility and finances for public
services among different government
levels
Strengthen sub-national units of
governments
Respect traditional structures of
authority as well as traditional

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mechanisms for resolving conflicts

and managing common property in
society
6. Reducing gaps between rich Reduce social disparities
and poor
7. Encouraging cultural diversity Maintain cultural identity and roots
and social integration while promoting social cohesion
Ensure political systems are
accessible to all and that legal
systems afford equal
opportunities
8. Protecting the environment Integrate economic and
environmental accounting
Promote interregional equity

Fiscal Policy
(source: thebalance.com)

Fiscal policy is how Congress and other elected officials influence the
economy using spending and taxation. It is used in conjunction with
the monetary policy implemented by central banks, and it influences the
economy using the money supply and interest rates. The objective of fiscal
policy is to create healthy economic growth.

Expansionary Fiscal Policy

There are two types of fiscal policy. The most widely-used

is expansionary, which stimulates economic growth. Congress uses it to end
the contraction phase of the business cycle when voters are clamoring for relief
from a recession. The government either spends more, cuts taxes, or both. The
idea is to put more money into consumers' hands, so they spend more. The
increased demand forces businesses to add jobs to increase supply.

Politicians debate about which works better. Advocates of supply-side

economics prefer tax cuts because they say it frees up businesses to hire more
workers to pursue business ventures. Advocates of demand-side economics
say additional spending is more effective than tax cuts. Examples include p

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Public works projects, unemployment benefits, and food stamps. The
money goes into the pockets of consumers, who go right out and buy the things
businesses produce.

An expansionary fiscal policy is impossible for state and local

governments because they are mandated to keep a balanced budget. If they
haven't created a surplus during the boom times, they must cut spending to
match lower tax revenue during a recession. That makes the contraction worse.
Fortunately, the federal government has no such constraints; it's free to use
expansionary policy whenever it's needed. Unfortunately, it also means
Congress created budget deficits even during economic booms—despite a
national debt ceiling. As a result, the critical debt-to-gross domestic product
ratio has exceeded 100%.

Contractionary Fiscal Policy

The second type of fiscal policy is contractionary fiscal policy, which is rarely
used. Its goal is to slow economic growth and stamp out inflation. The long-
term impact of inflation can damage the standard of living as much as a
recession. The tools of contractionary fiscal policy are used in reverse. Taxes are
increased, and spending is cut. You can imagine how wildly unpopular this is
among voters. Only lame duck politicians could afford to implement
contractionary policy.

Tools

The first tool is taxation. That includes income, capital gains from
investments, property, and sales. Taxes provide the income that funds the
government. The downside of taxes is that whatever or whoever is taxed has
less income to spend on themselves, which is why taxes are unpopular.

The second tool is government spending—which includes subsidies,

welfare programs, public works projects, and government salaries. Whoever
receives the funds has more money to spend, which increases demand and
economic growth.

Monetary Policy
(source: thebalance.com)

Monetary policy is the process by which a nation changes the money

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supply. The country’s monetary authority increases supply with expansionary
monetary policy and decreases it with contractionary monetary policy. It has
many tools it can use, but it primarily relies on raising or lowering the fed
funds rate. This benchmark rates then guides all others.

Monetary policy works faster than fiscal policy. The Fed votes to raise
or lower rates at its regular Federal Open Market Committee meeting but may
take about six months for the impact of the rate cut to percolate throughout the
economy.1 4 Lawmakers should coordinate fiscal policy with monetary policy,
but they usually don't because their fiscal policy reflects the priorities of
individual lawmakers. They focus on the needs of their constituencies.

These local needs often overrule national economic priorities, and as a

result, fiscal policy often runs counter to what the economy needs. Central
banks are forced to use monetary policy to offset poorly planned fiscal policy.

Monetary policy is a central bank's actions and communications that

manage the money supply. The money supply includes forms of credit, cash,
checks, and money market mutual funds. The most important of these forms of
money is credit. Credit includes loans, bonds, and mortgages.

Monetary policy increases liquidity to create economic growth. It

reduces liquidity to prevent inflation. Central banks use interest rates, bank
reserve requirements, and the number of government bonds that banks must
hold. All these tools affect how much banks can lend. The volume of loans
affects the money supply.

Three Objectives of Monetary Policy

Central banks have three monetary policy objectives. The most

important is to manage inflation. The secondary objective is to reduce
unemployment, but only after controlling inflation. The third objective is to
promote moderate long-term interest rates.

Types of Monetary Policy

Central banks use contractionary monetary policy to reduce inflation.

They reduce the money supply by restricting the volume of money banks can

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lend. The banks charge a higher interest rate, making loans more expensive.
Fewer businesses and individuals borrow, slowing growth.

Central banks use expansionary monetary policy to lower

unemployment and avoid recession. They increase liquidity by giving banks
more money to lend. Banks lower interest rates, making loans cheaper.
Businesses borrow more to buy equipment, hire employees, and expand their
operations. Individuals borrow more to buy more homes, cars, and appliances.
That increases demand and spurs economic growth.5

Monetary Policy vs. Fiscal Policy

Ideally, monetary policy should work hand-in-glove with the national

government's fiscal policy. It rarely works this way. Government leaders get
re-elected for reducing taxes or increasing spending. As a result, they adopt an
expansionary fiscal policy. To avoid inflation in this situation, the Fed is forced
to use a restrictive monetary policy.6

For example, after the Great Recession, Republicans in Congress became

concerned about the U.S. debt. It exceeded the debt-to-GDP ratio of 100%.7 As
a result, fiscal policy became contractionary just when it needed to be
expansionary. To compensate, the Fed injected massive amounts of money into
the economy with quantitative easing.

Monetary Policy Tools

All central banks have three tools of monetary policy in common. First,
they all use open market operations. They buy and sell government bonds and
other securities from member banks. This action changes the reserve amount
the banks have on hand. A higher reserve means banks can lend less. That's a
contractionary policy. In the United States, the Fed sells Treasurys to member
banks.

The second tool is the reserve requirement, in which the central banks
tell their members how much money they must keep on reserve each night. Not
everyone needs all their money each day, so it is safe for the banks to lend most
of it out. That way, they have enough cash on hand to meet most demands for
redemption. Previously, this reserve requirement has been 10%. However,
effective March 26, 2020, the Fed has reduced the reserve requirement to zero.

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When a central bank wants to restrict liquidity, it raises the reserve
requirement. That gives banks less money to lend. When it wants to expand
liquidity, it lowers the requirement. That gives members banks more money to
lend. Central banks rarely change the reserve requirement because it requires
a lot of paperwork for the members.

The third tool is the discount rate. That's how much a central bank
charges members to borrow funds from its discount window. It raises the
discount rate to discourage banks from borrowing. That action reduces
liquidity and slows the economy. By lowering the discount rate, it encourages
borrowing. That increases liquidity and boosts growth.

Supply-Side Policy
(intelligenteconomist.com)

Supply Side Economics involves policies aimed at increasing aggregate

supply (AS), a shift from left to right. They are based on the belief that higher
rates of production will lead to higher rates of economic growth. They are
aimed at enhancing the productive capacities of an economy by fostering what
they view as a better business climate via deregulation and tax cuts, which
creates more jobs, thereby creating higher levels of demand and increasing
economic growth. They focus on improving the quality and quantity of the four
factors of production (i.e. labor, capital, land, and entrepreneurship).

Successful policies lower the natural rate of unemployment. Some

economists also believe that successful supply-side policies can contribute to
long-term economic growth without increasing the rate of inflation. It’s
important to note that supply-side policies are not perfect: they are difficult to
implement, they are unpopular, and they take a great deal of time to take effect.

Pillars of Supply Side Policy

1. Regulatory policy

Advocates for supply-side economics prefer less government

intervention in the free market (the typical laissez-faire, small government
perspective of conservatives). This is because they don’t believe that creating
demand via government policy will actually create real economic growth.

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2. Tax policy

Supply-side economists advocate for decreased marginal tax rates as

well as lower income tax that will spur workers to choose to work more. They
also believe in lower capital gains taxes because they think this will encourage
investors and entrepreneurs to apply their ample capital in a way that
generates economic growth.

3. Monetary policy

Monetary policy is the practice of increasing or decreasing the number

of dollars circulating through the economy at a given time. The Federal
Reserve can determine this quantity. Supply-side economists do not believe
that monetary policy helps to manage the economy in a beneficial manner.
Keynesian economists, by contrast, tend to argue for manipulating the money
supply in order to improve growth and economic stability (there are more
details on the contrast between these two economic perspectives later on in this
article).

Supply Side Economics Example:

1. Labor Market

Lowering wages frees up the labor market, which makes a lower-paid job more
attractive. To lower wages, the government takes measures like abolishing
minimum wage laws, decentralizing trade union power, reducing
unemployment benefits, lowering income tax, and making hiring and firing
easier and more affordable for firms. However, these policies are very
politically unpopular, so they may not be implemented in many cases,
especially in societies where there are a strong labor movement and high rates
of union membership.
2. Capital Markets

The government needs to create money for banks to lend for investment. The
government can do this by increasing competition between banks to make
loans more attractive, reducing financial crowding out, and making savings
more attractive.

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3. Entrepreneurship

The government needs to encourage entrepreneurs to start new businesses by

lowering the marginal tax rate and encouraging share ownership among
employees. Another commonly employed policy is not requiring new
businesses to pay corporate taxes during their first three years, or if they don’t
cross a minimum level of revenue during their initial years.

4. Competition and Efficiency

The government will need to increase competition between firms and increase
the overall efficiency of the economy. They can do this by
removing monopolies, by privatizing certain industries, by freeing up trade
(through the reduction or even elimination of trade barriers), and by
implementing inward investment policies.

5. Education. Better education and training to improve skills will improve labor
productivity.

Summary
For effective and efficient delivery of services to people, tools are needed
by the government. In this chapter, we learned that government has various
steering mechanisms and tools available to maneuver the system to grow at a
faster or slower pace. We learned that fiscal policy is more of government
expenditure (either to increase or decrease) and taxation. The end goal of this
fiscal policy is to make sure the economy will sustain its trajectory path and
create positive multiplier to the people.
The other important tool use by the government hand in hand with the
fiscal policy is the monetary policy. Monetary policy essentially deals with the
level of money supply circulating within the economy. The Bangko Sentral ng
Pilipinas or BSP has the regulatory power either to increase or decrease the
money supply in the economy. Using this policy, it aims to stabilize the price
of basic commodities (inflation) and generate employment.
The use of these policies is coupled with caution because both have
corresponding impact to the economy as it aims to strike balance.

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Keywords
Monetary Policy Taxation Expansionary Fiscal Policy
Contractionary Fiscal Policy Government Spending
Multiplier Effect Expansionary Monetary Policy
Contractionary Monetary Policy Supply-Side Economics
Interest rates open market operations
Required reserve inflation

Self-Check
Name: ____________________________________ Schedule: ___________
Course: ___________________________________ Year: _______________

Multiple Choice. From given available choice, choose the write phrase or word
which corresponds to the given statement. Write your answer in a clean sheet
of paper.
Monetary Policy Taxation Expansionary Fiscal Policy
Contractionary Fiscal Policy Government Spending
Multiplier Effect inflation Expansionary Monetary Policy
Contractionary Monetary Policy Supply-Side Economics
Interest rates Open market operations Required reserve

1. Refers to the overall increase in the prices of basic goods and

commodities in the market for a specific period of time (inflation)
2. Borrowing cost of money (IR)
3. Refers to the necessary amount or quantity of money to be left in the
bank vaults (RR)
4. A policy of the government which aims to ease up inflation by reducing
the among of money supply in the economy (CMP)
5. A policy of the government which aims to speed up market transactions
and increase the flows of circulation of money in the economy by
increasing the availability of money supply (EMP)
6. A policy of the government to increase level of taxation (EFP)
7. Government reduces the amount of its expenditures (CFP)
8. When government spends resources, it creates ripples of income. (ME)
9. A policy which aims to increase the aggregate supply in the economy.
10. One of the main sources of government’s income.

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Let’s Analyze
1. Using an illustration or diagram, explain the how the fiscal policy of the
government works?
2. Provide 5 specific examples and explain the benefits of
a) Increase in tax
b) Decrease in tax
3. Provide 5 specific examples and explain the benefits of
a) Increase in required reserves
b) Decrease in required reserves
4. Research about the topic on Tax Reform Acceleration Inclusion Network
(TRAIN). From the research you conducted, answer the following
questions:
4.1. What is TRAIN Law all about?
4.2. How is TRAIN Law related to fiscal policy?
4.3. What is the main rationale of TRAIN Law?
5. During the COVID19 pandemic, the Bangko Sentral ng Pilipinas played
a key role especially in reviving the economy. Explain how the BSP
performed during the crisis. Relate your answer to the functions it
performs.
6. In the United States, President Donald Trump adopted the supply side
economics. Explain how the system of supply side economics works in
the case of US.

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Chapter 5
(Weeks 9-10)

Fundamental Sectors of Development

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Learning Objectives (For Weeks 7-8)

At the end of this chapter, he students of should be able to
1. Know the various development sectors of the economy where
governance play an important role
2. Understand the interdependent nature of these sectors and its
relationship towards holistic development of the country.

Fundamental Sectors/Areas of Development

The development of the country/community is strategically clustered
according to its purpose and area of development. These clusters have specific
areas and subareas which needs to be monitored for intervention and for
development purposes. These areas of development are classified as: Social,
Economic, Infrastructure, Environment and Institutional.
The nature of these development sectors is interdependent and
interrelated from and to each other. This means whatever development or
progress happening in one area/sector of development, this event/s has/have
corresponding positive or negative impact/s to other sectors and its subsectors.
In effect, there is a domino effect when development arise.
The need to understand that development is not fragmented or
piecemeal becomes imperative. The need to view development as a holistic
approach is necessary and essential as development must be inclusive – where
no sector of development is left behind.
In the Philippines, sectors of development are clearly specified and
clustered as identified by the National Economic and Development Authority
(NEDA). NEDA as the socio-economic and development planning arm of the
government is primarily tasked to monitor development areas of the country.
Big ticket projects and programs must pass through first with the NEDA Board.
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1. Social Development – is a sector of development which deals with the
population, social services, and gender equity concerns of the people. In
the population subsector, basically it deals with the demographics, age-
structure, and rate of increase.

In the social services and status of well-being subsector, health; education,

culture and recreation; welfare; housing; protective services are the main
focus of this area. Gender equity and gender development is also an area
of concern for development to promote equality among genders.

1.1. Population
1.2. Social Services and Status of well-being
1.2.1. Health
1.2.2. Education, Culture and Recreation
1.2.3. Welfare
1.2.4. Housing
1.2.5. Protective Services
1.3. Gender Equity Concerns

2. Economic Development Sector – is a sector which deals with the enterprise

sectors of the country. This sector of development includes the three major
sectors of the economy: the agriculture, industry, and services. These major
sectors are the main components measured/determined in the gross
domestic product of the country. GDP is the performance indicator used by
development analysts to measure the pace of growth or sluggishness.
2.1. Agriculture
2.1.1. Agricultural Crops
2.1.2. Livestock
2.1.3. Fisheries
2.1.4. Forestry
2.2. Industry
2.2.1. Mining and Quarrying
2.2.2. Manufacturing
2.2.3. Construction
2.2.4. Electricity, Water, Gas Utilities
2.3. Service
2.3.1. Wholesale and Retail Trade
2.3.2. Transportation and Communication
2.3.3. Finance, Insurance and Related Activities
2.3.4. Real Estate

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2.3.5. Personal and Community Services
2.3.6. Tourism
2.4. Informal Sector

3. Infrastructure Development Sector – is a sector of development which

covers the logistics and support systems/mechanisms to ensure sustainable
development. This sector includes the economic support, social support,
and public administration support. Corresponding subsectors of this area
are provided hereunder.

3.1. Economic Support

3.1.1. Irrigation System
3.1.2. Power Generation
3.1.3. Roads, Bridge, Ports
3.1.4. Flood Control and Drainage
3.1.5. Telecommunications

3.2. Social Support

3.2.1. Hospitals
3.2.2. Schools
3.2.3. Waterworks and Sewerage
3.2.4. Public Socialized Housing
3.2.5. Facilities for Aged, Infirm Disadvantaged
3.2.6. Tourism

3.3. Public Administrative Support

3.3.1. Government Buildings
3.3.2. Jails
3.3.3. Freedom Pars
3.3.4. Public Assembly Areas

4. Environment and Natural Resources – growth and development of a

country is impossible without the utilization of environment and natural
resources. These environmental and natural resources are primary inputs
in all the production processes and eventually leading to development.
However, as progress and development take place environmental
consequences such degradation and pollution are inevitable. The following
are the subsectors of the environment and natural resource sector:
4.1. Lands
4.1.1. Lands of the Public Domain

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4.1.2. Private and Alienable and Disposable Lands
4.1.3. Ancestral Domain

4.2. Forest Lands

4.2.1. Protection Forest
4.2.2. Production Forest

4.3. Mineral Lands

4.3.1. Metallic Mineral Lands
4.3.2. Non-metallic Mineral Lands

4.4. Parks, Wildlife and Other Reservations

4.5. Water Resources

4.5.1. Freshwater (ground, surface)
4.5.2. Marine Waters

4.6. Air Quality

4.7. Waste Management
4.7.1. Solid Waste
4.7.2. Liquid Waste
4.7.3. Toxic and Hazardous Waste

5. Institutional/ Administrative Development – institutional/administrative

sector refers to the organization’s development especially the welfare of the
human resource, its income generating activities and the output. This
include the management of the organization and its fiscal administration.

5.1. Organization and Management

5.1.1. Organizational Manual
5.1.2. Monitoring and Evaluation Mechanism

5.2. Fiscal Management

5.2.1. Taxation
5.2.2. Income Generation Mechanism
5.2.3. Expenditure Mechanism
5.2.4. Monitoring and Evaluation of Resource

5.3. Legislative Output

5.4. LGU-NGO-PO Linkages

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Summary
This chapter discuses the various sectors of the country essential for
development. It is highlighted that these sectors are interdependent and
interrelated with each other with the main aim of progress and development.
As discussed, there are five major areas of development, namely, the social
development, economic development, infrastructure development, natural and
environmental development, and institutional development. All these
development sectors play an important role in the attainment of aspirations
and ideals of every well-meaning citizens, now and for the future.

Let’s Analyze
Name: ____________________________________ Schedule: ___________
Course: ___________________________________ Year: _______________

1. In your own community, discuss the status of different development

sectors and your proposal for improvement.
2. As a student of public administration, how do you see the role of
public administration in the development of these sectors?
Provide 10 main reasons and explain each reason.
3. Considering the current pandemic crisis in COVID19, it exposes the
different dysfunctionalities in the systems of our governance. Which of
the different sectors do you think should be more focused? Explain!

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Chapter 6
(Weeks 11-12)

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Development which is not sustainable is not development at all.

Learning Objectives
At the end of this chapter, the learners (the students of the public
administration) should be able to:
a) Appreciate that development is a collaborative effort
b) Know the various challenges faced by every country and the
world in general.
c) Come up with solutions to the challenges of time

Sustainability

Sustainability is a development
which satisfies the needs of the
present without compromising
the capacity of future
generations, guaranteeing the
balance between economic
growth, care for the
environment and social well-
being.

Sustainable Development
Sustainable development is a
concept that appeared for the
first time in 1987 with the
publication of the Brundtland
Report, warning of the negative environmental consequences of economic
growth and globalization, which tried to find possible solutions to the problems
caused by industrialization and population growth.

Many of the challenges facing humankind, such as climate change,

water scarcity, inequality and hunger, can only be resolved at a global level and
by promoting sustainable development: a commitment to social progress,
environmental balance and economic growth.

As a part of a new sustainable development roadmap, the United

Nations approved the 2030 Agenda, which contains the Sustainable
Development Goals, a call to action to protect the planet and guarantee the
global well-being of people. These common goals require the active
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involvement of individuals, businesses, administrations and countries around
the world.

Sustainable development is necessary because ‘over-development’ in

the richest countries and ‘under-development’ in the poorest countries is
causing harm to local, regional and global life-support systems.

Levels of ‘under-’ and ‘over-’ development’ should be relativized to

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reasonable levels of satisfaction of ‘essential’ human needs. Poverty and a
general lack of developmental resources (man-made, natural, human and social
capital) are major causes of under-development in the poorest countries; and
relatively minor indirect causes of harm to life-support systems.

Changes in production and consumption patterns in ‘transition

countries’ are contributing to both reasonable levels of development and more
serious harm to life-support systems. Existing types and levels of production
and consumption in the richest countries are the major drivers of harm to life-
support systems. People living in poverty today are disadvantaged by both
under-development and harm to life-support systems. Future generations are
potentially disadvantaged by harm to life-support systems.

Normative considerations of both human survival and global-

generational equity require political, economic, social and cultural efforts to
alleviate harm to life-support systems. By implication, the same normative
considerations require efforts to alter conditions of over- and under-
development.

An effective and pressing implementation of these commitments is

the major challenge of ‘governance for sustainable development’. The
challenge must be addressed by governmental signatories to the United
Nations accords: the responsibility for ‘governance’ rests with ‘governments’.
The challenge has been specifically identified as one of national strategies,
action plans and implementation, and the United Nations system is currently
in the process of assessing progress on numerous aspects of the programme.

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Sustainable Development Goals

The sustainable development goals (SDGs) are a new, universal set of

goals, targets and indicators that UN member states will be expected to use to
frame their agendas and political policies over the next 15 years.

The SDGs follow and expand on the millennium development

goals (MDGs), which were agreed by governments in 2001 and are due to
expire at the end of this year. The Sustainable Development Goals (SDGs) are
a collection of 17 global goals designed to be a "blueprint to achieve a better
and more sustainable future for all". The SDGs, set in 2015 by the United
Nations General Assembly and intended to be achieved by the year 2030, are
part of UN Resolution 70/1, the 2030 Agenda.

17 Sustainable Development Goals

Goal 1) End poverty in all its forms everywhere

Goal 2) End hunger, achieve food security and improved nutrition, and
promote sustainable agriculture

Goal 3) Ensure healthy lives and promote wellbeing for all at all ages

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Goal 4) Ensure inclusive and equitable quality education and promote lifelong
learning opportunities for all

Goal 5) Achieve gender equality and empower all women and girls

Goal 6) Ensure availability and sustainable management of water and

sanitation for all

Goal 7) Ensure access to affordable, reliable, sustainable and modern energy

for all

Goal 8) Promote sustained, inclusive and sustainable economic growth, full

and productive employment, and decent work for all

Goal 9) Build resilient infrastructure, promote inclusive and sustainable

industrialization, and foster innovation

Goal 10) Reduce inequality within and among countries

Goal 11) Make cities and human settlements inclusive, safe, resilient and
sustainable

Goal 12) Ensure sustainable consumption and production patterns

Goal 13) Take urgent action to combat climate change and its impacts (taking
note of agreements made by the UNFCCC forum)

Goal 14) Conserve and sustainably use the oceans, seas and marine resources
for sustainable development

Goal 15) Protect, restore and promote sustainable use of terrestrial ecosystems,
sustainably manage forests, combat desertification and halt and reverse land
degradation, and halt biodiversity loss

Goal 16) Promote peaceful and inclusive societies for sustainable development,
provide access to justice for all and build effective, accountable and inclusive
institutions at all levels

Goal 17) Strengthen the means of implementation and revitalize the global
partnership for sustainable development

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Within the goals are 169 targets, to put a bit of meat on the bones. Targets under
goal one, for example, include reducing by at least half the number of people
living in poverty by 2030, and eradicating extreme poverty (people living on
less than $1.25 a day). Under goal five, there’s a target on eliminating violence
against women, while goal 16 has a target to promote the rule of law and equal
access to justice.

DOUGHNUT MODEL OF SUSTAINABLE DEVELOPMENT

This model is serves as a framework for sustainable development .

Shaped like a doughnut, integrating the concept of environmental
boundaries with the complementary concept of social/developmental
boundaries. The main goal of the model is to remodel economic approaches and
set new goals.

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The doughnut economics model seems to be an impeccable model to be

adapted in our way forward. This is why:

1. This economic model takes into consideration the human and environmental
aspect of economic progress, and places it within the frame of traditional
economics. Trinidad and Tobago is dependent on our natural endowments, i.e.,
human capital and the environment. Yet, our attempts to achieve economic
progress in the past have relied solely on exploiting our non-renewable natural
resources in an unsustainable manner, due to the Dutch Disease and the
resource curse. We are currently in a position where the effects of no
diversification and declining revenues are catching up to us, and threatening
our economy and our people. It is time for a sustainable approach to be used to
advance our economy, and following this model is the perfect route to be taken,
as it is rooted in sustainability.

2. The model encompasses climate action which is desperately needed by

the entire world at this point. According to the United Nations Secretary
General, climate change is still a bigger threat than the Coronavirus. (United
Nations Climate Report 2020). By utilizing this model not only are we fighting
the monster that is climate change, but we are ensuring that we achieve stability
for the future generations to come, and make up for the unsustainable practices
that we engaged in, in the past. This model recognizes that our environment is
what our economy and mankind rely on, and in this regard, places great
importance on the preservation of it.

3. According to Economist Amartya Sen, people are the center of economic

development. The doughnut economics model quite physically places people
at the center of the model. The model focuses on improving inequalities,
poverty, education, income, and other humanitarian issues that are deemed
critical for progress. Trinidad and Tobago’s natural endowment is human
capital and there is a growing poverty and unemployment rate during the
COVID-19 pandemic which should be corrected through sustainable means
post-COVID.

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4. The model comprises of the collaborative commons and the unpaid care
economy which is a dynamic part of the modern economy. It moves away from
the idea that growth and progress is measured through GDP, a straight line.
Rather, it poses that economics does not begin with monetary value, but rather,
human well-being.

5. The model allows us to simultaneously achieve economic progress while

achieving the Sustainable Development Goals.

What about increasing GDP? By ensuring we achieve sustainable economic

development, economic growth will follow as well. There is a call to work from
the inside out, rather than from the outside in. Sustainable development is
especially important for Trinidad and Tobago as we are experiencing the
damaging effects from unsustainability, first hand.

While the doughnut Economics Model has brought some criticisms, it is still
import to acknowledge its aspects.In this regard, I urge policy makers to adapt
some form of the Doughnut Economics Model, because the COVID-19
pandemic is killing economic development by squeezing the life out of the very
source, human capital. Once the pandemic is over, the economy will be able to
breathe again but will end up a crippled body if sustainable economic
approaches are not used to revive it.

The framework was proposed to regard the performance of

an economy by the extent to which the needs of people are met without
overshooting Earth's ecological ceiling. The main goal of the new model is to
re-frame economic problems and set new goals. In this model, an economy is
considered prosperous when all twelve social foundations are met without
overshooting any of the nine ecological ceilings. This situation is represented
by the area between the two rings, considered by its creator as the safe and just
space for humanity.

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Summary
The study of sustainable development has come to attention now more
than ever as every human being and other living organisms of this planet are
in brink of extinction. Natural and man-made calamities are getting worse and
its effects to humanity are unimaginable. The current pandemic experience
right now is suspected to be a result of climate change where viruses try to
spread at a faster rate affecting the human and its civilization.
In this section, we also learned the 17 sustainable development goals or
the global goals to be attained in 2030. These goals are essential for a holistic
approach of development where no one is to be left behind. These goals and its
milestone achievements are monitored by every country member signatory to
these development goals.

Sources:
https://en.wikipedia.org/wiki/Doughnut_(economic_model)
https://en.wikipedia.org/wiki/Sustainable_Development_Goals
https://www.theguardian.com/global-development/2015/jan/19/sustainable-
development-goals-united-nations
https://www.acciona.com/sustainable-development/
https://www.voicesofyouth.org/blog/doughnut-economics-lets-not-fry-
economy-post-covid-19

Let’s Analyze
In a clean sheet of paper, you are going to critique and analyze the different
issues in governance

1. How did the United Nations come up with these sustainable development
goals?

2. For EVERY SDG, explain/discuss the need to achieve these goals? Is there
really a need for these SDGs? What is the rationale for every goal listed?

3. Is the Philippines obligated to follow these goals? How and why? Cite
relevant laws pertinent to it.

4. Explain human development index (HDI) and its importance. Discuss the
three major areas covered by HDI.

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Chapter 7

Challenges of Governance and

Development in the Philippines

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The brain of the politicians has two sides: the left side with nothing right and
the right side with nothing left. ~ Anonymous

Learning Objectives (Weeks 13-14)

In this chapter, the students of public administration program should be
able to:
1. Understand the underlying factors and processes to shift for good
governance
2. Identify and discuss the vital issues and challenges of governance
and development especially in the Philippine setting
3. Recommend solutions to vital challenges of the country for growth
and development

The Trim Tab Factor

Chaos Theory

In 1977, Ilya Prigogine won the Nobel Prize for his articulation of the Chaos
Theory which simply stated, is that, as a structure takes in more chaos and
information, eventually a new order of synthesis can, and will, emerge.
One needs to watch for the bifurcation point in an open system, often a
place of quiet, a still point, or a vortex in which a higher level of synthesis
can emerge. This is a choice moment. It would be like knowing the moment
was right for “doing development differently”

Chaotic situations make us uncomfortable. They involve the unknown;

they can be dangerous; only the naïve, the idealistic, and the inexperienced
believe all experiences and experiments have a happy ending. We all want
to be in an ordered society. Therefore, embracing chaos requires conscious
shift in our relationship to instability. Embracing chaos does not mean
abandonment to a willingness to support and promote all unknown factors
or reckless conditions.

The Chaos theory requires a critical and balanced discernment of the social
situation in order to recognize when chaotic conditions are actually in the
process of giving rise to an emerging social order. Like plants emerging
from the soil, a new social era does not spring forth spontaneously,
suddenly, without having established a foundation over a period of time.
Being able to sense the “still point”, to see the seeds, the emerging social
trends, is, in itself, a social art. The system transition point makes

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conditions optimal for “trim tab projects”

The Trim Tab

The Trim Tab Factor metaphor emerged from the fact that on the back of
the rudder of a huge ship there is much smaller rudder called trim tab. By
moving the trim tab rudder even slightly, the larger rudder is gradually
moved, which in turn changes the direction of the massive ship. This
metaphor was applied by Bukminster Fuller to the challenge of turning
massive civilizations in a more positive direction. The social artist can use
this metaphor persuasively when trying to help organizations change.
“Under certain conditions, when a system is far from the equilibrium,
creative individuals can have an enormous impact, “says Margaret
Wheatley. The initiatives, the projects of creative individuals, in chaotic
circumstances, have the leveraged effect of a ship’s trim tab, in bringing
forth the emerging social era. These initiatives may be in any area of
society, culturally or financially unfeasible. They typically involve a
disenfranchised segment of the population. The Grameen bank is a high
profile example of a trim tab project; begun in 1976 in Bangladesh by
Muhammad Yunus, it loans funds to over two million customers, 94% of
them women. In the 21st century, we see innovative initiatives involving
women, youth, community, education, culture and ecology.

The Tipping Point

This is an image from biology and physics. In his bestseller, The Tipping
Point, Malcolm Gladwell points to the epidemic nature of social problems,
from teen-age delinquency to traffic jams. He demonstrates that they are
capable of spontaneous and often very large and surprising reversals in
direction. You can input a lot of effort over a lot of years in behalf of
something and nothing much happens. Then you have some activity or
intervention at the right moment and swooping changes occur, affecting
many other systems. This happens in bacterial diseases which reach a point
of overwhelming the immune system in one last exponential multiplication
or in a wave as it tips over to turn a ripple on the surface of the water into
a thundering wall that crashes onto the beach. The tipping point is the
moment of transformation from one form to another entity. Although the
drama seems spontaneous, such as a seed emerging through the ground,
these transformations are actually the predictable results of previous
inputs, perhaps directed positively by trim tab projects.

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Keystone Species

The Keystone Species are the anchors of the new society. Certain
organizations or activities are necessary for the existence of many other
activities or organizations. A “keystone species” is a species whose very
presence contributes to a diversity of life forms and its extinction would
consequently lead to the extinction of many other forms of life. In the semi
-fragile prairie ecosystem, a colony of prairie dogs is a keystone species
which support some two hundred other species. In meeting the MDG for
example, supporting strategic organizations and activities can provide a
stable environment for many associated initiatives which depend upon
them to thrive.

GUIDE QUESTIONS FOR ACTION PLANNING EXERCISE

1. What is the current chaos around governance?
2. What is the keystone species?
3. What tipping point can we foresee?
4. What Trim Tab initiative would be most catalytic to realize the vision on
good governance?
5. What is the role of each sector in the Trim Tab?
6. What is my role in the Trim Tab?

VALUES TO CONSIDER IN SELECTING A TRIM TAB PROJECT:

1. Fosters Multi-Sectoral Partnerships
2. Fosters Multi-Cultural Partnerships
3. Use Social Artistry Leadership
4. Use a Decentralized Approaches Involving Sub-National Levels of
Government
5. Demonstrates or supports the National Action Plan

FACTORS/PROCESSES PUSHING FOR GOVERNANCE

The International Monetary Fund (IMF) identified several
factors/processes pushing for governance, good governance, in particular.
These are:
1. the quest for growth and development
2. the environmental movement
3. globalization
4. consolidation

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1. The Quest for Growth & Development
This is the key factor pushing for governance. Since the Industrial
Revolution, the market had the principle role in growth, with the state needed
only to nurture the climate that would allow it to grow. However, the quarter
century after World War II swung the pendulum to the state. In the West, John
Maynard Keynes gave theoretical justification for the state to manipulate price
signals and fight unemployment and business downswings. Meanwhile, the
socialist states installed and consolidated central planning systems.

In the Third World, the state also reigned supreme as the principal
planner, energizer, promoter and director of the accelerated development
effort” (Lewis, 1964:26). In the attempt to assume a central role in planning for
the whole economy and society but also to create its own enterprises. However,
at its best, the state had to saddle these economic institutions with social
functions, making it difficult to compete on equal terms in the economy. At the
extreme, elite control of the
enterprises or of the state itself made them subject to rent seeking and
corruption, leading to losses that were shouldered not by those responsible for
them, but all taxpayers in a country. In many states where the taxation system
was regressive, the losses were borne primarily by the poor.

Thus, a quarter century of the interventionist’s state saw a widespread

dissatisfaction about it from all fronts. In the First World, the trigger was the
burgeoning welfare bill, in the Second World, the failure of state planning
symbolized by the collapse of the Soviet Union, and in the Third World, the
inability of states, even when achieving some economic prosperity, to check
growth of inequality and poverty in their territories. Governmental rent
seeking, inefficiency and corruption led the demands for privatization, which
pushed the state away from its central role. However, the private sector by itself
could not consider the distributional questions that led to the rethinking of
development as economic growth in the first place.

The inability of economic gains to produce acceptable levels or

redistribution, poverty reduction and political freedoms woke up civil society.
But they could criticize government and set up alternative delivery systems but
could not provide nationwide coverage. Similarly, they decried the private
sweatshops but could not set up the industries to take their place. Clearly, no
one sector could manage society by itself but each had a role to play in making
it move forward.

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2. The Environmental Movement

The concept of development has changed from the exclusive focus on

economic growth of the 1950s to the inclusion of distributional goals like the
reduction of poverty and inequality during the UN Development Decades, to
the current battle cry for “sustainable human development”. Although SHD as
a term is espoused primarily by the United Nations, its incorporation of
concerns for people and nature not only for the present but also for later
generations is now widely accepted by state, market and civil society
worldwide. People-centeredness as an aspect of development recognized that
growth alone may affect human lives adversely. Therefore, the concern for
people must be central and not just be a by-product or a trickling down of
economic achievement. The incorporation of nature into the equation owes
much to the environmental movement which brought home the point that
everyone is indeed only one planet, and the depletion of resources in one area
is felt in a real way in all areas. There is no dichotomy between people and
nature, however, because the preservation of the environment is itself a pledge
to care for generations of people yet unborn who must also be allowed to enjoy
and care for the bio-diversity, beauty and wealth of the planet as a proper
habitat for all creation.

The environmental movement has provided to governance an urgency

to deal with issues in a holistic manner, to include not only the sector at hand
and the obvious stakeholders, but also other affected by them in other areas
and in future times. It has forced a redefinition of the public interest with nature
itself as a recognized stakeholder. It has pressured private firms to consider
ecological effects of their products-even goods as useful and popular as cars
have come under close scrutiny for their lead emissions, for their greedy use
of non-replaceable fuels, for the noise and traffic they cause that debase the
quality of these aspects, and firms both for profit and non-profit to race for
alternative, ecologically acceptable solutions. The state has also been pressed to
consider new regulatory laws and deregulation of the economy. If nothing else,
the ecological movement has underscored the point that no one sector can
manage the demands of society- and the environment- all by itself.

3. Globalization

The transformation from command to market-oriented economies, the

emergence of democratic political regimes in the former Soviet Union, the rapid
development and global proliferation of new technologies, the pervasive

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spread of telecommunications systems, the growing importance of knowledge-
based industries and skills and the continuing integration of the world
economy through trade and investment - all these have created the foundation
for a new age of sustainable human development. But all carry risks as well. Is
it to be a breakthrough or a breakdown?

Changes in the world's economic, political and social systems have

indeed brought unprecedented improvements in human living conditions in
both developed and developing countries. Consider the profound
breakthroughs in communications, transport, agriculture, medicine, genetic
engineering, computerization, environmentally friendly energy systems,
political structures, peace settlements. The list goes on.

These changes also bring new uncertainties and challenges as the world
steps into the 21st century. Signs of breakdown are everywhere: disintegration
of families; destruction of indigenous societies; degradation and annihilation
of plant and animal life; pollution of rivers, oceans and the atmosphere; crime,
alienation and substance abuse; higher unemployment; and a widening gap in
incomes and capabilities. Not a pretty picture.

The trend towards globalization deserves special attention. It is manifest

in the growth of regional blocs that cooperate in such areas as trade and legal
frameworks, in the power of intergovernmental bodies such as the World
Trade Organization and in the spread of transnational corporations.
Globalization has profound implications for governance the final impact of
which we cannot yet determine. First is the increasing marginalization of
certain population groups. Those who do not have access to the
technological/information revolution are in danger of becoming part of a
structural underclass. Second is the erosion of state sovereignty as
transnational bodies increasingly mediate national concerns and press for
universal laws. Third is the increased globalization of social and economic
problems, such as crime, narcotics, infectious diseases and the migration of
labor. Finally, international capital and trade are decreasingly accountable to
sovereign states.

Governance can no longer be considered a closed system. The state's task

is to find a balance between taking advantage of globalization and providing
a secure and stable social and economic domestic environment, particularly for
the most vulnerable. Globalization is also placing governments under greater
scrutiny, leading to improved state conduct and more responsible economic

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policies.

Because each domain of governance - state, private sector, civil society

- has strengths and weaknesses, the pursuit of good governance requires
greater interaction among the three to define the right balance among them for
sustainable people-centered development. Given that change is continuous, the
ability for the three domains to continuously interact and adjust must be built-
in, thus allowing for long-term stability. UNDP's Initiatives for Change
recognizes that the relationships among government, civil society and the
private sector:
are key determinants in whether a nation is able to create and sustain
equitable opportunities for all of its people. If a government does not
function efficiently and effectively, scarce resources will be wasted. If it
does not have legitimacy in the eyes of the people, it will not be able to
achieve its goals or theirs. If it is unable to build national consensus around
these objectives, no external assistance can help bring them about. If it is
unable to foster a strong social fabric, the society risks disintegration and
chaos. Equally important, if people are not empowered to take
responsibility for their own development within an enabling framework
provided by government, development will
not be sustainable.

Developing countries must ensure that everyone can participate in

economic and social development and take advantage of globalization. They
must build a political system that encourages government, political, business
and civic leaders to articulate and pursue objectives that are centered around
people and a system that promotes public consensus on these objectives.

The term "globalization" has acquired considerable emotive force. Some

view it as a process that is beneficial—a key to future world economic
development—and also inevitable and irreversible. Others regard it with
hostility, even fear, believing that it increases inequality within and between
nations, threatens employment and living standards and thwarts social
progress. This brief offers an overview of some aspects of globalization and
aims to identify ways in which countries can tap the gains of this process, while
remaining realistic about its potential and its risks.

Globalization offers extensive opportunities for truly worldwide

development but it is not progressing evenly. Some countries are becoming
integrated into the global economy more quickly than others. Countries that

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have been able to integrate are seeing faster growth and reduced poverty.
Outward-oriented policies brought dynamism and greater prosperity to much
of East Asia, transforming it from one of the poorest areas of the world 40 years
ago. And as living standards rose, it became possible to make progress on
democracy and economic issues such as the environment and work standards.

Undersecretary Luis C. Liwanag of DBM highlighted that one of the

greatest challenges that is confronted in any development efforts today is
globalization. Globalization has been criticized for having a lopsided
inclination towards rich and developed countries. It has also been said that
globalization impinges on nation-states sovereignty and territory since the
dominant players weaken the power and influence of individual nation-states,
particularly the Third World Countries and those that are not linked to the
regional trading blocs. With globalization, we are bounded by foreign
economic policies and by agreements between member nations.

Economic "globalization" is a historical process, the result of human

innovation and technological progress. It refers to the increasing integration of
economies around the world, particularly through trade and financial flows.
The term sometimes also refers to the movement of people (labor) and
knowledge (technology) across international borders. There are also broader
cultural, political and environmental dimensions of globalization that are not
covered here.

At its most basic, there is nothing mysterious about globalization. The

term has come into common usage since the 1980s, reflecting technological
advances that have made it easier and quicker to complete international
transactions—both trade and financial flows. It refers to an extension beyond
national borders of the same market forces that have operated for centuries at
all levels of human economic activity—village markets, urban industries, or
financial centers.

Markets promote efficiency through competition and the division of

labor—the specialization that allows people and economies to focus on what
they do best. Global markets offer greater opportunity for people to tap into
more and larger markets around the world. It means that they can have access
to more capital flows, technology, cheaper imports, and larger export markets.
But markets do not necessarily ensure that the benefits of increased efficiency
are shared by all. Countries must be prepared to embrace the policies needed,
and in the case of the poorest countries may need the support of the

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international community as they do so.

As globalization has progressed, living conditions (particularly when

measured by broader indicators of well being) have improved significantly in
virtually all countries. However, the strongest gains have been made by the
advanced countries and only some of the developing countries.

The income gap between high-income and low-incom e countries has

grown wider is a matter for concern. And the number of the world’s citizens in
abject poverty is deeply disturbing. But it is wrong to jump to the conclusion
that globalization has caused the divergence, or that nothing can be done to
improve the situation. To the contrary: low-income countries have not been
able to integrate with the global economy as quickly as others, partly because
of their chosen policies and partly because of factors outside their control. No
country, least of all the poorest, can afford to remain isolated from the world
economy. Every country should seek to reduce poverty. The international
community should endeavor—by strengthening the international financial
system, through trade, and through aid—to help the poorest countries integrate
into the world economy, grow more rapidly, and reduce poverty. That is the
way to ensure all people in all countries have access to the benefits of
globalization.

Sources: www.imf.org/external/np/exr/ib/2000/041200.htm

4. Consolidating Peace
Another force pressing for governance is the need to consolidate peace
in war-torn nations. This issue is rarely recognized as among the processes
pushing for governance. However, this unique perspective was brought to the
force dramatically by Hage Geingob, Prime Minister of Namibia, in his remarks
to the World Cog. Countries that have undergone a civil war, secession
movements or the creation of a new state out of the break-up of national
territories have a specially strong imperative to get everyone involved in the
process of building a nation or affecting a national reconciliation. In these
situations, the coming together of the state, market and civil society to manage
societal affairs is not more rhetoric but a national urgency. It requires bringing
together former adversaries beyond the discussion table to the fields of service
in the cities and farms including those which were battlegrounds. This is not
only a lesson learned in Namibia.

In a recent study in Mali, Uganda, Thailand, Guatemala and the

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Philippines, as countries emerging from internal conflict, all found governance
particularly, decentralizing governance-was necessary to make concrete the
commitments of all protagonists for peace. It entailed capacity building not
only for state agencies in dealing with former rebels, but also leadership and
political skills training for those former combatants so that they may take up
social responsibilities side by side with their military and civilian counterparts.

It required the private sector to regard them with new eyes, as potential
producers and consumers and therefore part of the market also (UNDP,
2000:25-34) They were acknowledged as members of civil society even as other
organizations of that sector also recognized their role in affecting changes in
governance for all and not only for former adversaries. As Prime Minister
Geingob stated, the tasks of nation building must be seen by all as their
responsibility and the resulting peace and development their common
ownership.

KEY ISSUES and CHALLENGES IN GOVERNANCE:

The Philippine Experience

1. Policy Issues, Concerns, and Challenges

Most people agree that the constitutional and legal frameworks in the
Philippines provide the foundations for good governance. The policy
environment allows people’s participation and public scrutiny and criticism of
government operations and outputs. Further, the country has adequate laws,
rules, and regulations to establish order and move forward. While
underdevelopment can easily be attributed to a lack of institutional capacity
and professional competencies to implement policies and enforce laws, certain
lessons learned and issues related to public policy making deserve mention.
The Philippine public policy-making process bears the following features: (i)
policy decisions and programs are arrived at through institutional mechanisms
provided for in the Constitution of the Republic of the Philippines and other
laws; (ii) policy-making process is then characterized as precedent bound,
based on laws and forged by such structures as a bicameral legislative body
and the executive branch of the Government; (iii) legislative branch is
composed of the Senate and the House of Representatives, while the president
heads the executive branch of the Government and is the prime initiator and
implementer of policies and programs; and (iv) the decisions of the legislative
and executive branches are subject to judicial review by the Supreme Court and

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inferior courts on questions of constitutionality and statutory construction.

Different sets of forces each influence the different stages of public

policy making, namely, decisions on (i) including items in the agenda, (ii)
developing any particular agenda item, (iii) passing legislation, and (iv)
implementing new laws. Different constituencies exert their influences at
different stages of policy development and execution. Many policies have
nonetheless missed out in giving importance to meaningful public
consultations, constructive debate and criticism, and needed consensus
building and development of a sense of ownership of different stakeholders.
Without these elements, and with extensive graft and corruption in the country
(which undermines and subverts the rule of law), many policies fail to
command respect and compliance.

It should also be made clear that policy initiatives for governance

reforms could be undertaken by the Government even without legislation. In
these cases, one might consider whether legislation is useful or not. The value
of legislation is that it binds public institutions to certain decreed directions. If
one wants to assure the future sustenance of any initiative currently carried out
by the Government, legislation may be considered. However, the Government
tends to be too legalistic and rule bound in addressing most of its problems.

Legislation is complicated, not under the complete control of any person

or group, and may have unpredictable results. Embarking on a campaign to get
something legislated cannot be a decision taken lightly or casually. In addition,
successful legislation generally occurs when the problems deemed important
meet the solutions deemed highly probable by political personalities or groups
in positions of power. Problems, policies, and politicians have to intersect for
proper action to occur.
Legislation as an instrument for achieving desirable societal goals and
institutionalizing reforms is advisable when the underlying assumptions of
policies have any or all of the following characteristics:
(i) policies can only be optimally effective when adopted by the whole
Government and supported by stakeholders;
(ii) policies can yield best results only when implemented over the life
of several administrations;
(iii) policies can be accomplished only with adequate and judicious use
of resources;
(iv) policies can be accomplished by the Government’s applying cost-
effective measures and using available technology and resources;

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(v) policies, when deliberated and agreed, would create a framework for
many people and groups to assume broader responsibilities on an
institutional basis.

A policy needs to be very clear and specific about the:

(i) nature and magnitude of the problem being addressed;
(ii) basic mechanism for responding to the problem;
(iii) standards and provisions for making the mechanism work;
(iv) system of responsibilities and accountabilities for coordination,
implementation, control, and review of results; and
(v) organizational and budgetary implications.

These elements are often deficient in many public policies. It is common

to have layers of rules and regulations to clarify policy provisions, not to
mention sets of procedures to inform and guide implementers and
stakeholders.

Some policy initiatives may not be ready to be pursued because the data
and analysis necessary to make a decision may be unavailable. In these cases,
research is probably more appropriate than formulating a new policy or draft
legislation. Some policies are haphazardly and hastily developed and scarcely
take into account deliberate and careful planning and effective use of objective
and accurate information. Public policy making in the Philippines boldly
underscores the need to improve its capacities in undertaking knowledge-
based policy analysis and development.
Access to timely and correct information about public policies also
precludes overall efficiency, effectiveness, and productivity. Those who are
affected may sometimes be unaware of or improperly informed about their
rights, duties, and responsibilities provided for in relevant policies.

2. Problems in the Bureaucracy

Bureaucracy is a distinctive arrangement used by human beings to
organize their activities. The invention of Western bureaucracy several
centuries ago helped solve the problem for leaders of governing human
systems that grew larger and more complicated with each passing year. The
great virtue and probably defining characteristic of bureaucracy, according to
the one of the founders of sociology, German Max Weber (1864-1920), is as “an
institutional method for applying general rules to specific cases, thereby
making the actions of government fair and predictable”. However, in the
governance process, there are two problems in a bureaucratic type of

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government: inefficiency and arbitrariness.

For nearly half a century, the Philippines was caught in an endless cycle
of reform exercises that hardly produced tangible and lasting results. Structural
issues—such as (i) duplicated functions and overlapped jurisdictions, (ii)
outdated and slow government procedures, (iii) various loopholes in
administrative procedures, and (iv) limited capacity for policy analysis and
strategic long-range planning that caused delays and higher costs in handling
business—made maintaining objectivity, accountability, and transparency in
decision making and government operations difficult and gave rise to a host of
other problems, including poor implementation and coordination. (ADB, 2005).

As reflected in the Country Governance Assessment, (2004)

Administrative reform efforts in the Philippines did not fully succeed because
of the following:
(1.) lack of acceptance of and commitment to the need for reform by
political authorities and different affected entities;
(2.) lack of stakeholder appreciation and agreement concerning
administrative reform being a long, strategic, and continuous
process;
(3.) lack of understanding that reform objectives are specific,
measurable, realistic, and time bound;
(4.) lack of good reform implementation strategies and adequate
resources to carry them out;
(5.) lack of an established central agency tasked with formulating,
coordinating, and monitoring reforms and providing corrective
measures; (6.) lack of reform procedures and regulations that are
fairly and consistently applied;
(7.) lack of meaningful stakeholder participation in the entire reform
process;
(8.) lack of strong and sustained support of political leaders;
(9.) lack of an established and enforced system of accountabilities; and
(10.) lack of safety nets for groups and individuals who may be
disenfranchised by interventions.

In the Common country Assessment of the Philippines (2004), an

inefficient bureaucracy is one of the major problems and an area for
development cooperation. Past Philippine administrations have carried out
reorganization and reengineering schemes for the bureaucracy, in an effort to

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improve efficiency and reduce corruption.

Studies about Philippine civil service system point to several

deficiencies include:
(1.) Weak mechanisms for planning, agenda setting and policy-making;
(2) Failure to implement and maintain an appropriate performance
management and measurement system;
(3) Overlapping and duplicating government functions and activities;
(4.) Overemphasis on rules and procedures rather than direct resource
management towards the realization of intended outcomes and impacts;
(5.) A highly politicized bureaucracy
(6.) Lack of required managerial and technical expertise

2. 1. Corruption
Corruption damages the development process in many ways. It
undermines social confidence in the willingness and capacity of public
institutions to fulfill their obligations to the people and it reinforces existing
power relationships that are themselves typically part of the development
problem. Losses due to corruption deepen poverty as they deprive the
disadvantaged sectors of much needed programmes and environmental
stewardship. Incidences of bribery and graft are often front page news, leading
the public to perceive them as the norm rather than the exception in
government transactions, further reducing the incentive or willingness to
increase taxpayer compliance.
The Government has recently introduced affirmative actions toward
addressing this problem such as the passage of the Procurement Act, the
implementation of lifestyle check among government officials, and the
reactivation of the Inter-Agency Anti-Corruption Committee (IAGCC) to
synchronize the various anti-corruption initiatives of the national government.
Despite these efforts, large scale and petty corruption is pervasive throughout
various levels of the Philippine government. The draft report of the
“Consultations on the UN Conference on Financing for Development cited that
out of a total national budget of Php 781 billion in 2001, PhP100 billion, or 13%
was at risk of being lost to corruption; 70% involved in public works contracts
while 30% involved the purchase of supplies and equipment. The Office of the
Ombudsman estimated that a total of USD48 billion was lost to graft and
corruption over the past 20 years, and that only 60% of the national budget was
actually spent on government programmes and projects.

Numerous laws addressing graft and corruption exist in the Philippines,

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and these date back to 1955. At present, the main references are the Revised
Penal Code of 1960, referred to as the Anti-Graft and Corrupt Practices Act, and
Article XI of the 1987 Constitution of the Republic of the Philippines. Box 1
presents a summary list of related laws, presidential decrees and
proclamations, and other regulations on corruption prevention.

List of Laws Related to Graft and Corruption

1946–1971

• Republic Act (RA) 1379 (1955). This act declared forfeiture in favor of the state
any property found to have been unlawfully acquired by any public officer or
employee, and provided for the proceedings.

• RA 3019 (1960). This act provided for the repression of certain acts of public
officers and private persons alike, which constitute graft or corrupt practices or
which may lead thereto, also known as Anti-Graft and Corruption Practices
Act.

• RA 6028 (1969). This act provided for the promotion of higher standards of
efficiency and justice in the administration of laws as well as to better secure
the right of the people to petition the government for redress of grievances,
creating the office of the citizen’s counselor.

1972–1986

• Presidential Decree (PD) 6 (1972). This decree amended certain rules on

discipline of government officials and employees.

• PD 46 (1972). This decree made it punishable for public officials and

employees to receive and for private persons to give gifts on any occasion,
including Christmas.

• PD 677 (1975). This decree amended Section 7 of RA 3019 (as amended).

• PD 749 (1975). This decree granted immunity from prosecution to givers of

bribes and other gifts and to their accomplices in bribery and other graft cases
against public officers.

• PD 807 (1975). This decree provided for the organization of the Civil Service

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Commission, in accordance with provisions of the Constitution of the Republic
of the Philippines (repealed under President Aquino’s administration).

• PD 1606 (1978). This decree revised PD 1486 (creating a special court to be

known as Sandiganbayan—the main antigraft court that adjudicates criminal
cases brought to it by the Office of the Ombudsman (OMB); it deals only with
cases filed against high-ranking government officials.

1987 – Present

• 1987 Constitution of the Republic of the Philippines. Article XI,

Accountability of Public Officers; Article II, Section 27 and Section 28 policy of
the State to maintain honesty and integrity in the public service and take
positive and effective measures against graft and corruption; and Article III,
Section 7, provides for the right of people to have access to public information.

• 1987 Administrative Code (Executive Order [EO] No. 292). This code
instituted the administrative code of the Philippines.

• EO 243 (1987). This order created OMB and restated its composition, powers,
functions, and other salient features in the 1987 Constitution of the Republic of
the Philippines.

• RA 6713 (1989). This act established a Code of Conduct and Ethical Standards
for Public Officials and Employees.

• RA 6770 (1989). This act provided for the functional and structural
organization of OMB and delineated its powers and functions.

• RA 7055 (1991). This act strengthened civilian supremacy over the military
by returning to the civil courts the jurisdiction over certain offenses involving
members of the armed forces, other persons subject to military law, and
members of the Philippine National Police.

• RA 7080 (1991). This act defined and penalized the crime of plunder.

• RA 8249 (1997). This act further defined the jurisdiction of the

Sandiganbayan, amending PD 1606 (as amended).
• Proclamation 189 (1999). This proclamation declared war against graft and

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corruption and authorized the Philippine Jaycee Senate, through the Graft Free
Philippines Foundation, Inc., to institutionalize public awareness of clean,
efficient, and honest governance.

• EO 317 (2000). This order prescribed a code of conduct for relatives and close
personal friends of presidents, vice-presidents, and members of the Cabinet.

• EO 12 (2001). This order created the Presidential Anti-Graft Commission and

provided for its powers, duties, and functions and for other purposes to
investigate complaints or hear administrative cases filed against presidential
appointees.

• EO 25 (2001). This order established The Governance Advisory Council to

encourage more active involvement of the business sector in curbing graft and
corruption.

• Code of Corporate Governance (2002). This code further provided to actively

promote corporate governance reforms aimed to raise investor confidence,
develop capital market, and help achieve high sustained growth for the
corporate sector and the economy.

• Code of Judicial Conduct (1989). This code provided for the appropriate
conduct of judges in performing their duties; otherwise known as the Code of
Judicial Conduct.

• RA 9160 (2001). This act defined the crime of money laundering and provided
for the penalties of such act.

• RA 9184 (2002). This act provided for the modernization, standardization,

and regulation of procurement activities of the Government, also known as the
Government Procurement Reform Act.

• EO 38 (2001). This order reorganized and extended the life of the Special Task
Force created under EO 156 dated 7 October 1999 entitled "Creating a Special
Task Force to Review, Investigate and Gather Evidence Necessary to
Successfully Prosecute Irregularities Committed at the Bureau of Internal
Revenue, Bureau of Customs and Other Government Offices or Agencies
Under or Attached to the Department of Finance.”

• EO 40 (2001). This order consolidated procurement rules and procedures for

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 Samal Island City College
Public Administration Program
Old City Hall, Brgy. Peñaplata, IGACOS
(+63) 922-422-3283
all national government agencies, government-owned or -controlled
corporations, and government financial institutions, and required the use of
the Government electronic procurement system.

• EO 72 (2002). This order rationalized the agencies under or attached to the

Office of the President.

• EO 109 (2002). This order streamlined the rules and procedures on the review
and approval of all contracts of departments, bureaus, offices, and agencies of
the Government including government-owned or controlled corporations and
their subsidiaries.

• EO No. 114 (2002). This order restructured the Bureau of Internal Revenue
toward a Taxpayers’ Focused Organization.

• EO No. 251 (2003) This order required the Bureau of Internal Revenue to
furnish OMB with income tax returns filed.

• RA 9194 (2003). This act amended RA 9160 (Anti-Money Laundering Act).

Source: http://www.tag.org.ph/phillaw

3. Issue on Public Fiscal Management

Another issue on good governance is on public fiscal management. Prior
to government reform programmes, there were weaknesses and constraints in
fiscal management, especially in the budgeting process. Some of these
constraints are still lingering.

Recognizing the impact that the fiscal condition has on macroeconomic

stability, the government should continue to give priority to raising revenues
and improving the efficiency of the bureaucracy so that more and better quality
public service can be delivered.

Following the onset of the Asian financial crisis, the Philippines

government’s deficit deteriorated quickly, mainly due to slippages in revenue
collection. The major causes of the decline include the following:
1. Tax evasion and weakness in the tax structure.
2. The private corporate and banking sectors which are major
contributors to the national coffers were weighed down by
nonperforming assets.

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(+63) 922-422-3283
DO YOU KNOW
Tax revenues as a share of GDP, fell from 13.9 % in 2000 to 13.5% in 2001.
About PhP150 billion is lost to tax evasion, PhP92 billion of which constitutes
uncollected income tax. In succeeding years, these translated into higher debt
service payments, which along with the non-passage of important tax measures,
created a vicious cycle of higher deficit and debt. Recognizing the major causes
of declining revenue collection, the government began in 2002 to implement
reforms in both the Bureau of Internal Revenue and Bureau of Customs. On the
expenditure side, expenditure reduction programs were also put in place, such
as the Government electronic Procurement System. Moreover, the passage of
Dept Cap Act is expected to ease the problem or rising interest payments.

Source: UNDP (2004) A Common View, A Common Journey, A Common

Country Assessment of the Philippines.
http://www.undp.org.ph/?link=6

4. Deficiencies in the Political and Electoral System

Public confidence in election outcomes is low because of widely alleged

irregularities in the Philippine electoral processes. The modernization of the
electoral system in the country today is an attempt to enhance public
confidence in election outcomes and address traditional election anomalies
such as cheating, intimidation and bribery. The government has initiated
concrete efforts to institutionalize electoral reforms through the passage of laws
on Election Modernization (see appendix for the full text of the Election
Modernization Act or RA 8436), Party-List System and the Absentee Voting for
Overseas Filipinos. A democratic and effective political and electoral system is
important to ensure that a development agenda, primarily addressing the
needs of poor and disadvantaged, is promoted and sustained beyond
administrations. Civil society organizations are currently working with their
government counterparts of pending reform bills in Congress that also seek to
address issues on political dynasties, the continued practice of party turn
coatism and the diminution of the electoral process into mere contests of
personalities.

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Summary
In this chapter, we learned that the path towards growth and
development of the country is not a straight line but rather it is coupled
with development challenges which hinders the country towards its goals
and vision. These challenges are corruption, kakistocracy, incompetence,
and lack of sound policies for good governance. These challenges are
however can be addressed if the system of laws, institutions, resources and
technology are properly in placed and utilized.
We also learned that there are factors/processes pushing for governance,
good governance, in particular the a) the quest for growth and
development; b) the environmental movement; c) globalization and d)
consolidation. Further, we discuss the trim tab factor which pushes the
system of governance to a more stable and secure one.

Sources
Laura Edgar, et al (2006) Partnerships: Putting Good Governance
Principles in Practice. Institute on Governance (IOG)

Ma. Oliva Z. Domingo, Third Sector Governance: Meanings, Issues, and

Challenges in the Philippines, National College of Public Administration
and Governance, University of the Philippines.

Cariño, Ledivina V. (ed.) 2002 Between the State and the Market: The
Nonprofit Sector and Civil Society in the Philippines. Quezon City: Center
for Leadership, Citizenship and Democracy, National College of Public
Administration and Governance, University of the Philippines, with the
assistance of the Ford Foundation.

Vlassis, Dimitri (2006) United Nations Convention against Corruption,

United Nations Office on Drugs and Crime Division for Treaty Affair. A
Paper Presented During the Trainors’ Training on UNCAC at the
University of the Philippines, National College of Public Administration &
Governance.

Associations of Schools of Public Administration in the Philippines,

(2004). Proceedings of the National Conference on Public Administration
and the Millennium Development Goals: Challenges and Reforms for
Effective Teaching and Capacity Building for Service Deliver

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(+63) 922-422-3283

Self-Check

NAME: ___________________________________ Schedule: ___________

Course: ___________________________________

Modified TRUE or FALSE. Write TRUE if the given statement is TRUE and
write FALSE if the given statement is FALSE. If your answer is TRUE or
FALSE, justify why your answer is true and/or false. Write your answer on
a clean sheet of paper. Cite authors when providing your justification why
your answer is TRUE or FALSE.
1. Corruption is never a major problem in the Philippines.
2. Bureaucracy makes or breaks the country’s growth and development.
3. Governance and development are not related with each other.
4. Resources are unlimited that is why the government can afford to
distribute social transfers e.g. Social Amelioration Program
5. Because of the bureaucratic system of our government, the delivery of
basic services such as ration of food during pandemic is made easy.
6. There is only one way to peace; peace is the only way.
7. Anti-terrorism bill is important to attain peace.
8. Anti-political dynasty bill is not important in a democratic system.
9. Poverty is a by-product of bad governance
10. Better infrastructure is a result of good governance.

Let’s Analyze
In a clean sheet of paper, you are going to critique and analyze the different
issues in governance
1. Aside from what is discussed, what do you think are other issues and
challenges confronting governance? Why do you think these issues
occur?
2. What are current government initiatives and reforms are employed to
combat these issues and challenges? How effective are these reforms?
3. What can you suggest to further improve the performance of
government in a governance processes?
4. Explain the relationship of environment and development! Explain also
the major role of the government towards environmental sustainability.
Cite the fundamental balance model of Martha and Barry Field.
5. From the recent experience in COVID19 pandemic, what do you think
are weaknesses in our system of governance? Give 5 examples and
explain it thoroughly

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