Pork Barrel

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PRI Discussion Paper Series

(No.11A-04)

Politicization of Philippine Budget System: Institutional and Economic Analysis on “Pork-Barrel”

Kohei Noda
Visiting Researcher Policy Research Institute, Ministry of Finance

March 2011

The views expressed in this paper are those of the author and not those of the Ministry of Finance or the Policy Research Institute.

Research Department Policy Research Institute, MOF 3-1-1 Kasumigaseki, Chiyoda-ku, Tokyo 100-8940, Japan TEL 03-3581-4111

Politicization of Philippine Budget System: Institutional and Economic Analysis on “Pork-Barrel”

Kohei Noda

* I would like to thank Prof. Cayetano Paderanga and Prof. Arsenio Baliscan for their valuable inputs and advices. Also, I would like to show my special appreciation to Prof. Benjamin E. Diokno who gave me numerous suggestions regarding the theme of this paper in various occasions. In drafting this paper, I referred to the unpublished paper “Philippine Yosan Seido (Philippine Budget System)” by Prof. Yutaka Katayama of University of Kobe, who was a former Minister for Research at the Embassy of Japan in the Philippines.

I. 1. OVERVIEW

INTRODUCTION

Budget is a foundation of economic management of a country, and therefore, in the context of developing countries, it is primarily an issue of development. It is often pointed out that the Philippine budget institution is characterized by its high degree of politicization. Such politicization is said to be one of the major causes of corruption, opaque plutocratic policy-makings, and frequent delays in budget approval and implementation. Politicization in the budget process, in concrete, is brought about by budget allocations aiming at providing benefits only to some regionally bounded constituency, which are often collectively expressed as “pork-barrel”. Presumably, there have always been several fundamental pitfalls in the discussions surrounding pork-barrel. First, to start with, the concept of “pork-barrel” has never been made clear, and thus the definition of the term is heavily dependent on the speakers or writers. In many cases, the concept is simply too narrowly interpreted. Secondly, related to the first point, although under-the-table political deals between the legislators and the President related to pork-barrel have been often criticized, the way in which the political intentions of the President play a role in pork-barrel politics has not been sufficiently elaborated. Simplistic understanding of the pork-barrel does not recognize the fact that pork-barrel is not merely a possession of the local politicians, but rather an outcome of mutual interactions between the local politicians and the President. Thirdly, the previous discussions on pork-barrel politics seem to have failed to give a sufficient answer to the question as to why it matters at all; several important issues on both substantial and procedural aspect including the economic inefficiency of resource allocation involved in pork-barrel politics have attracted very little attention. Fourthly, and perhaps most importantly, talks on pork-barrel with little orientation to the actual budget figures are so prevalent – such abstract discussions may both exaggerate or underestimate the true magnitude of pork-barrels of different forms. Down-to-earth observations on actual budgetary documents are called for in order to capture the true behaviors of pork-barrel politics. The paper intends to shed light on pork-barrel in its entirety putting together the previously fragmented discussions from an institutional and economic perspective.

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2.

STRUCTURE OF THE PAPER

To preempt the main discussion of the paper, the author claims that pork-barrel politics takes place on four major stages during the course of budget formulation; a) lump-sum allocations, b) congressional insertions, c) disbursement specification/impoundment, and d) initial basic allocation. Corresponding to these stages of...
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