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By H. Uchimura

An in-depth research of the elemental position that decentralization performs in constructing nations, utilizing exact statistical facts to envision the particular financial constitution among ranges of presidency, and the consequences of decentralization on the neighborhood, nationwide and foreign degrees.

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The key here is the cost–benefit nexus, which extends the notion of the theory into the issue of accountability. It should also be noted that, in this kind of theory, the issue of revenue assignment can be resolved simultaneously with that of expenditure assignment, at least in terms of the amount of revenues that each local government should raise. In other words, once expenditure assignment is determined and local citizens agree on the level of benefits they enjoy, their tax burdens are set with respect to how much they benefit.

G) Rules and regulations governing local fiscal matters are well developed, and they are properly observed by local governments. The main driving force for the development of the intergovernmental fiscal relationship was the expansion of the role of the government caused by capitalist economic development (which necessitated infrastructure provision and created unemployment, income disparity, cyclical/structural booms and downturns). Throughout the late nineteenth century to the early twentieth century, local governments in Europe, North America and even Japan faced rapidly increasing demand for locally provided services.

4 focuses on the role of fiscal transfers in the Philippine fiscal decentralization, and the last section summarizes our conclusions. 1 The local government system under the 1991 Code The current local government system and intergovernmental structure of the Philippines is based on the 1991 Code. Although the Code is perceived by many as a radical reform in terms of the extent of powers, responsibilities, resources, and personnel shifted to the local governments, it is not the first decentralization law in the country.

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