Decentralization, the Internal Revenue Allotment, and Shared Growth: An Examination of Correlations
Abstract
This is a macro study on the role of internal revenue allotments in decentralization to help the Philippines achieve shared growth. The research attempted to answer two interrelated development policy questions: 1) has the Philippines achieved shared growth; and 2) does the Internal Revenue Allotment (IRA) have the potential of contributing to shared growth? Patterns of correlation were distilled from available provincial as well as national data on average income, poverty incidence, income distribution, and IRA. Correlation analysis for the second question was supplemented with an analysis of the IRA formula. Results showed that growth in the Philippines has been more of the inclusive than the shared growth type. Moreover, research article tendered arguments against two criticisms of the IRA formula, thereby effectively revealing the potential of the IRA to contribute to shared growth. Recommendations were given for future research on crucial causalities, for example, among IRA, per capita income, population growth through internal migration, as well as the causalities underlying the dynamics among average income, poverty incidence, and income distribution.
