The IRA Cut: Threat to Local Governance and Democracy
Atty. Vincent Edward R. Festin and Atty. Marlon J. Manuel


INTRODUCTION
On the 10th of October 1991, Republic Act 7160, known as the Local Government Code (LGC) was signed into law by then President Corazon C. Aquino. The law was, to recall, an effort to give flesh to Article X of the 1987 Constitution, specifically Sec. 3 thereof. At the risk of sounding trite, we can safely say that the law's passage was greeted with much enthusiasm as it was widely perceived as a means of ending centralism in governance and opening up avenues for greater democratic participation and autonomy. Of course, the passage of the Code likewise carried with it greater responsibilities for local governments what with the devolution of a considerable number of tasks previously undertaken by the national government.


Necessarily, with the assumption of more and more duties comes the right to possess the wherewithal to effectively carry out these functions. Of the various sources of revenue mandated by the law, one such source has come to be relied upon most by the local governments, the Internal Revenue Allotment or IRA. So dependent have these local government units become to the IRA that it will not be surprising to find that a considerable chunk of their own budgets would be sourced from the IRA.

In December of the past year 1999, Senator John Osmeña, Chair of the Senate Finance Committee, announced that the government was faced with the prospect of incurring a severe deficit. It was hence necessary, to undertake measures to prevent such a deficit from occurring. By this he meant that certain budgetary items had to be reduced or cut and that others had to be placed in the item for "unprogrammed" expenses. Among other items that he targeted for reduction was an amount of P30B out of a total amount of P121.7B originally appropriated for the internal revenue allotment (IRA) of local government units.

Expectedly, local officials raised a howl over the proposal. In an act that was virtually unprecedented, these officials, through the Union of Local Authorities of the Philippines (ULAP), took to the streets and marched in protest against the proposed move. They likewise threatened a four-day work stoppage unless the P30B was restored as a regular appropriation. The show of force, and the veiled threat that the IRA's restoration was a condition precedent to local officials' support for Pres. Estrada's Constitutional Correction for Development or Concord, forced the hand of the Chief Executive to persuade the Senate to "reprogram" the amount. Local officials were exultant at their triumph. These, however, were but the first acts in an unfolding drama.

At the expected signing of the Bicameral Conference Committee report on the budget deliberations, Senator Osmeña decided to conveniently absent himself thereby derailing the signing of the report and creating an impasse on the issue. Soon thereafter, local officials' complaints and protests notwithstanding, a portion of the IRA amounting to P10B was still placed under "unprogrammed fund".

Senator Osmeña insists that no cut was ever made on the IRA. What he describes as real cuts were those imposed on other agencies such as those made on the budget for the Departments of Education, Culture and Sports, Agrarian Reform and the Interior and Local Government. He explains that the characterization of the P10B as "unprogrammed" funds is not, by and of itself, a cut and that Congress has not failed in its duty to appropriate funds for the IRA.

Local officials, however, have remained steadfast in their opposition to any limitation on the IRA. In the ensuing days, ULAP revealed the results of a study conducted on the proposed General Appropriations Act. ULAP divulged that the budget was bloated by items consisting of "pork barrel" funds for legislators. ULAP claimed that the "pork barrel" was unconscionable considering the "cut" in the IRA as well as other budgetary items. In reaction, President Estrada vowed to veto the items alleged to contain "pork," only to change his mind the following day and ask where the "pork" was in the budget.

The bickering between Congress, the President and Local Officials has occupied the headlines in the past few months. Nevertheless, the story, as it continues to develop, is not without precedent. In 1997, then President Fidel Ramos issued Administrative Order No. 372 which withheld 10% of the IRA without consultation and without premising his act on an "unmanageable public sector deficit" as required by the Local Government Code.

Based on these events, certain questions relative to the IRA cry out for answers. These pertain to: the characterization of the IRA under the law; what may be considered as cuts on the fund; the meaning of "automatic release" of the fund; and the requirements for legal and valid "cuts" on the same. The answers to these issues become urgent. Given the country's penchant for deficit spending, it is not unlikely that cuts on the IRA, as first done by the Ramos Administration and now by Congress, will become a recurring practice by the national government and will constitute a threat to local autonomy.
It is in the light of these circumstances that this study is being conducted. This paper shall show that the delineation of P10B for the IRA to "unprogrammed" funds is actually a cut on the IRA of the local governments. It shall also show that the cut was improper, violating as it does, both the Constitution and the Local Government Code. It shall then proceed to display the effects of the cut on the effectivity of governance and its implications on autonomy and development at the local level.

The IRA as a Legal Mandate

It is necessary to first settle the characterization of the IRA. Indeed, a degree of leveling-off is required if the recurrence of this issue is to be avoided.

It is noteworthy that in the approved General Appropriations Act of 1998, the IRA was referred to as "assistance" to local government units. Therein lies the rub. The term "assistance" lends itself to an interpretation that the fund may be withdrawn at the pleasure or caprice of both the executive and legislative branches. In a sense, the IRA is deprived of its mandatory nature if and when it is considered as assistance. Against this notion, however, can be found explicit provisions in both the Constitution and the Local Government Code clearly characterizing the IRA as mandatory. On this matter, the Constitution provides as follows:

ART. X. Sec. 6. Local Governments shall have a just share, as determined by law, in the national taxes which shall be automatically released to them. (emphasis supplied).

The Local Government Code, on the other hand states the following:

Sec. 284. Allotment of Internal Revenue Taxes. Local government units shall have a share in the national internal revenue taxes based on the collection of the third fiscal year preceding the current fiscal year as follows:
Sec. 286. Automatic Release of Shares. (a) The share of each local government unit shall be released, without need of any further action, directly to the provincial, city, municipal or barangay treasurer, as the case may be on a quarterly basis within (5) days after the end of each quarter, and which shall not be subject to any lien or holdback that may be imposed by the national government for whatever purpose.
(b) Nothing in this Chapter shall be understood to diminish the share of local government units under existing laws. (Emphasis Supplied).

The unifying theme behind all of the provisions cited is the emancipation of the IRA from any form of interference and/or control from the national government. This merely echoes the very underpinnings of the Local Government Code in the first place. Clearly, the IRA is not assistance nor is it subject to any form of control, save only in exceptional circumstances. It is a Constitutional and legal mandate and an imperative for effective governance at the local level.
Not only the law, but jurisprudence as well has given the IRA its rightful characterization. In the case of Alvarez v. Guingona, the Supreme Court had the following to say:

The practical side to development through a decentralized local government system certainly concerns the matter of financial resources. With its broadened powers and increased responsibilities, a local government unit must now operate on a much wider scale. More extensive operations, in turn, entail more expenses. Understandably, the vesting of duty, responsibility and accountability in every local government unit is accompanied with a provision for reasonable adequate resources to discharge its powers and effectively carry out its functions. Availment of such resources is effectuated through the vesting in every local government unit of (1) the right to create and broaden its own source of revenue; (2) the right to be allocated a just share in national taxes, such share being in the form of internal revenue allotments (IRAs); and the right to be given its equitable share in the proceeds of the national wealth, if any, within its territorial boundaries.

Significant in the quote is that the Supreme Court has spelled out several "rights" pertaining to local government units. One such right is the IRA. Moreover, the same case distinguishes the IRA from funds that may be treated as aid when it states that:

…To reiterate, IRAs are a regular, recurring item of income; nil is there a basis too, to classify the same as a special fund or transfer, since IRAs have technical definition and meaning all its own as used in the local government code that unequivocally makes it distinct from special funds or transfers referred to when the Code speaks of "funding support from the national government, its instrumentalities and government-owned -or controlled corporations."

The discussion above makes the following points plainly evident: first, the fund is not assistance; second, the fund should be automatically released to local government units; and third, the IRA is a right that pertains to local government units.

A "Cut" By Any Other Name…

We can see that the IRA is not an amount that can be reduced through ordinary means and under slight pretenses. Any attempt, therefore, to reduce the IRA or subject the same to any condition should prompt one to declare that there has been a violation of the law. The Constitution and the Statute are rather clear when they state that the IRA should be automatically released and should be free from any lien or holdback.

Moreover, it should be remembered that the IRA is based on revenue collections of the third preceding fiscal year prior to that of the current fiscal year. The amount of the IRA, therefore, has already been collected and should rightfully accrue to the local government units. In other words, it is money that has been earmarked for their expenditures. This fact only serves to highlight what was stated in the case of Alvarez v. Guingona, as quoted earlier, that the entitlement to the IRA is a matter of right.

Congress' act of placing the P10B in unprogrammed funds is therefore a violation of this right. Contrary to the claim of Congress, a cut has in fact been imposed on the IRA. The fact that the release of the IRA is subject to a condition - availability of funds -runs counter to the absolute language employed in the Constitution and the law, that the IRA should be released automatically. It is, to employ the language of the law itself, subject to a "holdback".

Cutting Clean?

Having shown that Congress has indeed cut the IRA, it is now important to show that the manner in which this cut was made is improper.

The Local Government Code states that:

Section 284. Allotment of Internal Revenue Taxes. Local Government Units shall have a share in the national internal revenue taxes based on the collection of the third fiscal year preceding the current fiscal year as follows:
Provided, that in the event of an unmanageable public sector deficit, the President of the Philippines is hereby authorized, upon the recommendation of the Secretary of Finance, Secretary of Interior and Local Government and Secretary of Budget and Management, and subject to consultation with the presiding officers of both Houses of Congress and the Presidents of the liga to make the necessary adjustments in the internal revenue allotment of local government units but in no case shall the allotment be less than thirty per cent (30%) of the collection of national internal revenue taxes of third fiscal year preceding the current fiscal year.


In addition Art. 379 of the implementing rules and regulations of the Local Government Code states that:

(a) In the event that an unmanageable public sector deficit is incurred by the national government, the Secretary of Finance, the Secretary of Interior and Local Government, and the Secretary of Budget and Management shall submit to the President a joint recommendation that will institute necessary adjustments in the IRAs of LGUs.
(b) Upon receipt of the joint recommendation of the Secretary of Finance, the Secretary of Interior and Local Government, and the Secretary of Budget and Management, and subject to consultation with the presiding officers of both Houses of Congress and the Presidents of the Leagues of LGUs, the President shall authorize the necessary adjustments of the total IRA to be distributed among the LGUs for the given year, provided, That in no case shall the adjusted amount be less than thirty percent (30%) of the national internal revenue collections of the third fiscal year preceding the fiscal year during which the reduction is to be made.
(c) Adjustments to the IRA share of LGUs shall be made only after effecting a corresponding reduction of the national government expenditures including cash and non-cash budgetary aids to GOCCs, government financial institutions (GFIs), the Oil Price Stabilization Fund (OPSF), and the Central Bank.

Based on the law and the implementing rules, several conditions have to be met. First, there must be an unmanageable public sector deficit. Second, cuts on the IRA should emanate from the Executive Branch. Third, before such a recommendation can be made, consultation with particular agencies, Congress and the Leagues has to be undertaken. Fourth, the cut cannot reduce the IRA to less than thirty percent (30%) of the amount collected as internal revenue taxes for the third fiscal year preceding the year in which the reduction is sought to be made. Finally, corresponding cuts on other agencies have to be undertaken.

Congress itself has imposed rather strict conditions for any cut to be effected. This only affirms the lofty position that the IRA should occupy in the system of priorities. Notwithstanding these requirements, Congress has seen it fit to cut the IRA by P10B with nary a concern for the requirements laid out by law. It is hence necessary to compare Congress' act with the requirements of the law.

The very first condition that must be extant is the presence of an unmanageable public sector deficit. In fairness to Senator Osmeña, his act was premised on a desire to keep the government's deficit to a reasonable level. Assuming, without conceding, that an unmanageable public sector deficit may be incurred by government, the test of the infirmity of the cut still has to be weighed by other prerequisites and it is in this regard that the cut imposed falls short of the standard set by the law.

First, the law is explicit in stating that any cut should emanate from the executive department. Specifically, it outlines a process whereby the cut should first be recommended by no less than three Cabinet Secretaries. In the present situation, no such recommendation was ever made and the cuts were in fact brought about by Congressional action. Second, it is clear that no consultation with the Leagues concerned was ever undertaken. Elementary fairness should at least have been observed when depriving local government units of the right to their share. One is therefore led to ask the question, "was due process afforded the local government units?" Third, it has not been shown that corresponding decreases on agencies has been effected.

Defenders of the cut, however, state that in view of the imminent deficit, the cut in the IRA comprises local government units' efforts at "burden sharing" or doing their part, so to speak, in governmental belt tightening.
First, it is clear that the cut, even under a scenario that an unmanageable public sector deficit will be incurred, does not comply with the strict provisions of the law. The law has recognized situations where a cut is allowed but has provided for the manner in which the same should be made. Any deviation from the manner so provided is therefore illegal.
Second, it should be noted that the "burden" has not been shared equally. An examination of the Bicameral Conference Committee Report would reveal that some agencies' and offices' appropriations were actually increased from what was initially earmarked in House Bill 8374. Curiously, among the items where cuts were imposed, it was the IRA that received the biggest slash.

From the foregoing, we can see that the IRA is a right. We can also conclude that this right has been violated. The automatic release of the IRA and the strict requirements for its allowable reduction are not merely arbitrary impositions made by the framers of the Constitution and the legislators. In other words, the IRA is not merely a legal necessity but is, more importantly, a practical reality. The special treatment of the IRA is rooted in three essential principles of local governance: decentralization, local autonomy and democracy. Any effort to undermine the preferred position of the IRA therefore adversely affects the very stability of the country's system of local governance. The next portion of this paper will focus on how the reduction of the IRA affects the principles mentioned above and how the national government, through its acts, has failed in its duty to render fidelity to these principles.

Rightful Share, Not Assistance

As earlier stated, Section 3, Article X of the 1987 Constitution mandates the enactment of a Local Government Code which shall provide for a more responsive and accountable local government structure instituted through a system of decentralization. Following this constitutional mandate, the Local Government Code of 1991 was passed. This law explains the policy of decentralization as a system whereby local government units shall be given more powers, authority, responsibilities, and resources.

As a strategy of decentralization, the law adopts the policy of devolution. As defined by the Local Government Code, "devolution" refers to the act by which the National Government confers power and authority upon the various local government units to perform specific functions and responsibilities. The law mandates the devolution of certain basic services and facilities from the national government to the local government units. The law also authorizes local governments to exercise such other powers and discharge such other functions and responsibilities as are necessary, appropriate, or incidental to efficient and effective provision of the basic services and facilities enumerated in the Local Government Code.

National agencies or offices concerned were given six (6) months from the effectivity of the law within which to devolve the responsibility for the provision of basic services and facilities enumerated in the law. The Local Government Code further provides that regional offices of national agencies or offices whose functions are devolved to local government units shall be phased out within one (1) year from the approval of the Local Government Code. Such national agencies may establish field units but only for the purpose of monitoring and providing technical assistance to local government units. The devolution of basic services mandated by the law includes the transfer to local government units of the records, equipment, and other assets and personnel of national agencies and offices corresponding to the devolved powers, functions, and responsibilities.

The devolution of the responsibility for the provision of basic services and facilities from the national government to the local government units meant the abdication of such responsibility by the national government. Hence, the law states that the national government may provide or augment the basic services and facilities assigned to the local government units only when such services or facilities are not made available or, if made available, are inadequate to meet the requirements of its inhabitants.

To enable the local government units to discharge their powers and effectively carry out their functions, the Local Government Code grants the local government units the necessary resources for these added responsibilities. Declaring this as one of the operative principles of local autonomy and decentralization, the law provides:

Sec. 3 (d) The vesting of duty, responsibility, and accountability in local government units shall be accpmpanied with provision for reasonably adequate resources to discharge their powers and effectively carry out their functions; hence, they shall have the power to create and broaden their own sources of revenue and the right to a just share in the national taxes and an equitable share in the proceeds of the utilization and development of the national wealth within their respective areas;

More specifically, the Local Government Code declares that the basic services and facilities the provision of which were devolved to local government units shall be funded from the share of the local government units in the proceeds of national taxes and other local revenues and funding support from the national government.

As discussed above, the provisions of the Local Government Code clearly show the direct link between the devolved powers and responsibilities (especially with respect to the provision of basic services and facilities), and the local governments' share in the proceeds of national taxes. The grant of the local government units' just share in the proceeds of national taxes is an essential part of devolution, which is, in turn, an essential part of decentralization.

Succinctly, local governments have the right to the IRA, their share in the national taxes, because they share the burden of serving the public. With the enactment of the Local Government Code, local governments are lodged with more powers and responsibilities. It is only equitable that local governments share in the resources that are available for governance because they share the burden of governance. Contrary to the apparent misconception of some national government officials, the IRA is not "assistance" from the national government. It is that part of the public funds that the people, through the Constitution and the law, specifically allocated to finance the effective discharge of the powers and responsibilities that are assigned to the local governments.

Dependence on the Rise

More serious than its deleterious effect on the system of decentralization and devolution, the current IRA problem shakes the foundations of local autonomy which is at the heart of our local governance system.
Section 25, Article II of the 1987 Constitution (the Declaration of Principles) clearly provides:

Sec. 25. The state shall ensure the autonomy of local governments.

A similar statement is contained in Section 2, Article X (Local Government, General Provisions):

Sec. 2. The territorial and political subdivisions shall enjoy local autonomy.
For its part, the Local Government Code declares that local governments shall enjoy "genuine and meaningful local autonomy" to enable them to attain their fullest development as self-reliant communities and make them more effective partners in the attainment of national goals.

The Supreme Court had an occasion to discuss the concept of autonomy and its relation to decentralization, thus:
There is decentralization of administration when the central government delegates administrative powers to political subdivisions in order to broaden the base of government power and in the process to make local governments "more responsive and accountable," and "ensure their fullest development as self-reliant communities and make them more effective partners in the pursuit of national development and social progress." At the same time, it relieves the central government of the burden of managing local affairs and enables it to concentrate on national affairs

Decentralizaton of power, on the other hand, involves an abdication of political power in favor of local government units declared to be autonomous. In that case the autonomous government is free to chart its own destiny and shape its future with minimum intervention from central government authorities. According to a constitutional author, decentralization of power amounts to "self-immolation," since in that event, the autonomous government becomes accountable not to the central authorities but to its constituency.

Faithful to the mandate of the Constitution, the Local Government Code contains provisions that are meant to respect and preserve the autonomy of local governments. Thus, it provides that the President shall exercise "general supervision" only, not control, over local government units. This general supervision is meant to ensure that the acts of local government units are within the scope of their prescribed powers and functions. It does not authorize the President to unduly meddle in local affairs. National agencies and offices, on the other hand, are tasked to coordinate with the concerned local government units in the discharge of their project implementation functions. Moreover, these agencies and offices are mandated to ensure the participation of local government units both in the planning and implementation of national projects. In fact, the Local Government Code even goes to the extent of declaring that no project or program shall be implemented by government authorities without prior consultations with the local government units, non-governmental organizations, and other concerned sectors, and prior approval of the sanggunian concerned.

All these provisions in the Local Government Code are meant to ensure the autonomy of local governments, following the express mandate of the Constitution. Local autonomy, as stated in the law, is envisioned to enable local governments to attain their fullest development as self-reliant communities and make them more effective partners in the attainment of national goals. This principle of autonomy is premised on the recognition that local problems and concerns are best understood and resolved by the local governments and that local government units can effectively address these problems and concerns if they are equipped for the purpose as self-reliant communities.

While autonomy of local governments does not mean absolute independence from the central or national government, it is incompatible with the concept of subservient dependence. As aptly stated by the Supreme Court, autonomous local governments must be free to chart their own destiny and shape their own future with "minimum intervention" from the national government. In fact, the Code calls the local governments "partners" in national development. Simply put, local governments should have enough elbow room to effectively discharge their powers and responsibilities free from the dictates and control of the national government authorities, and subject only to the prescribed limitations of their powers.
It is in this regard that the IRA problem strikes down at the very heart of autonomy, and consequently, of effective local governance. The recent debate over the IRA seems to put local governments at the mercy of the national government authorities in the Executive and Legislative branches. At the constant threat of losing a big chunk of their budget, local governments are susceptible to succumb to the whims and caprices of national government officials.

As shown by the incidents that happened before the end of 1999, local government officials will be tempted to offer something to national government officials in exchange for the IRA. It may be Concord today, and another thing tomorrow. If not corrected, the bad precedent that was started on this year's budget will perpetuate a system of dependence where local governments always look up to the national government for help. This is clearly anathema to the "self-reliant communities" envisioned in the law. Worse, this culture of dependence has an uglier side. Local governments' dependence on the national government will inevitably lead to their subservience. They will no longer be free to chart their own destiny and shape their own future. They will forever be towed, and willingly, by the national government.

Emasculation of local autonomy is a sure formula for the collapse of governance at the local level. More importantly, it has a direct effect on the democratization of local governance. The same IRA problem that chips away at local autonomy takes a higher toll on democracy.

Democracy Falling

In the quoted decision of the Supreme Court, it was stated that the autonomous government becomes accountable not to the central authorities but to its constituency. Cutting the local governments' dependence on the national government highlights the sovereignty of the people as the source of governmental power. Indeed, democracy is an indispensable element of local governance and local autonomy. To be more accurate, local governance and local autonomy are founded on principles of democracy.

When the Constitution mandates the setting up of a responsive and accountable local government structure instituted through a system of decentralization, the Constitution goes farther and provides that such local governance structure shall have effective mechanisms of recall, initiative, and referendum. The Constituion also provides that the legislative bodies of local governments shall have sectoral representation as may be prescribed by law. The Constitution's chapter on Social Justice and Human Rights devotes a portion on the role and rights of people's organizations and guarantees the right of the people and their organizations to effective and reasonable participation at all levels of social, political, and economic decision-making.

Consistent with the Constitutional policy of democratizing local governance, the Local Government Code provides for the mechanisms that will ensure the people's participation in local governance. Among these mechanisms of participation are the procedure for the recall of government officials, the passage of resolutions and ordinances through local initiative, and the mandatory prior consultations with the people.

These Constitutional and statutory provisions emphasize that the democratic mechanisms that will ensure the people's participation in governance shall remain inseparable from local autonomy and governance. Local autonomy, in fact, is meant to shield local governments from the influence and control of national government authorities so that these local governments can effectively discharge their powers and responsibilities with only the people's interest in mind.
The IRA cut will certainly mean a reduction in the funds that can finance the mechanisms for people's participation in local governance. It provides local government officials an excuse to "prioritize" basic services over the equally, if not more, important implementation of the democratic mechanisms and venues for people's participation in governance. The failure to convene the local special bodies, for example, can be blamed on the lack of funds. Doubtless, the IRA cut can also be expected as a ready argument against the implementation of the constitutional mandate for sectoral representation in the local legislative bodies.

More than the breakdown in the democratic structures for people's participation in local governance, however, the IRA problem poses a more dangerous, albeit not readily apparent, threat. Using the IRA as an effective carrot - a magic charm - the national government has successfully turned the local governments' loyalty and attention away from their constituents. Local governments are, once more, in danger of being mere instruments of the national government. Adding insult to injury, all these are made through the use of the people's funds that should have been automatically released to them.

Conclusion

In sum, the Constitution and the Local Government Code clearly give local governments the IRA as a right, their just share in national taxes. Contrary to the position of some national government officials, the IRA is not "assistance" from the national government. It is the rightful share of local governments in public funds, corresponding to the local governments' share of the burden of governance. To protect the local governments' right to the IRA, the law gives the national government the express mandate to automatically release the IRA to the local governments without any lien or holdback. While the law recognizes that the IRA can be reduced in the event of an unmanageable public sector deficit, the law sets certain requisites before the actual reduction can be done. The law also imposes a limit on the amount of the cut itself.
With P10B of the IRA placed under "unprogrammed funds," the IRA is effectively reduced. Since this reduction did not comply with the strict requirements of the Local Government Code, it is clearly illegal. The IRA problem, however, is not simply a question of legality. It goes into the very core of our system of local governance.

The underlying reason for the preferential treatment of the IRA is the policy of emancipating the IRA from any form of interference and/or control from the national government. This policy is rooted in the principle of local autonomy that guarantees the right of local governments to chart their own destiny and shape their own future free from undue intervention from the national government. Local autonomy, in turn, is indispensable in democratizing local governance. Local governments' freedom from the control of central government authorities is essential to the local governments' accountability to the people. More than the legal issue, this should be our concern.

With the recent conflict on the IRA, a number of dangers that threaten the Philippine system of local governance surfaced. On the part of the national government officials, the debate on the IRA highlights the mistaken belief that local governments are at the mercy of the central government, and that the IRA is a form of assistance given out of the generosity of the national government. On the part of the local government officials, the IRA debate shows their vulnerability to succumb to pressure and influence from the national leadership. Unfortunately, while the battle over the IRA is fought in the halls of power by the national and government officials, the people's interest is at risk. The IRA cut undermines the integrity of our local governance system by seeping into and destroying the foundations of autonomy and democracy in local governance. It cultivates a system where local government officials who are held hostage by the budget process will be accountable, not to the sovereign people that gave them the power of governance, but to the national leaders that control the nation's purse.

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