Abstract:
This study contends that in the Philippines, Centralization is inversely related to
Good Governance. It measures centralization in terms of the percentage of national
government expenditures to total government expenditures (which is simply the sum of
national and local government expenditures). It measures good governance as the average
of an equity and efficiency index.
The equity index is derived by deducting the average disparity percentage from 1.
A region’s disparity is the absolute value of the difference of a region’s contribution to
Gross Domestic Product (GDP) to the mean or average of all regional contributions to
GDP.
The efficiency index is derived by computing the actual yearly Gross National
Product (GNP) growth rates and dividing it with the yearly growth rates envisioned in the
Medium Term Philippine Development Plan (MTPDP).
The good governance index is then plotted in a line graph. To make sense of the
seemingly unrelated values, the method of least squares is applied to show a straight
linear pattern.
Results show that there is indeed an inverse relationship between Centralization
and Good Governance. With this discovery, the author hopes to promote awareness of the
vital importance of federalism to national unity development.
