Decentralization and the limits of local control

Rethinking health systems for impact

For decades, decentralization has been one of the most widely prescribed reforms in public administration — a governance “cure-all” meant to bring government closer to the people. In the health sector, it promised empowerment, responsiveness, and stronger local accountability.

In the Philippines, this promise was institutionalized through the 1991 Local Government Code, devolving the management of hospitals, rural health units, and public health services from the national government to local government units (LGUs). Provinces, cities, and municipalities became responsible for delivering frontline health services to their populations. Yet more than three decades later, the experience reveals a sobering truth: decentralization often decentralizes responsibility, not power.

Local governments are expected to deliver on national health priorities— ranging from maternal and child health to immunization and disease control—but often lack the full capacity or fiscal space to make strategic decisions. The result is a persistent illusion of local control that confuses administrative burden with genuine empowerment.

The Promise of Decentralization

When decentralization was first introduced in the 1990s, it was framed as an antidote to bureaucratic centralism. The Department of Health (DOH) was seen as too distant from communities, too rigid in its programming, and too slow to respond to diverse local health needs.

By transferring service delivery functions to LGUs, reformers hoped to create a more responsive and accountable system. Local leaders would have the flexibility to adapt programs to community needs, allocate resources according to local priorities, and respond promptly to emerging health issues.

In theory, decentralization was not merely an administrative reform but a democratizing one. Health problems emerge within communities, and local governments — closer to citizens and local realities — were presumed to be best positioned to address them. But as the decades unfolded, the promise of decentralization collided with institutional and political realities. Rather than creating a coherent local system, devolution produced a fragmented governance structure.

The DOH retained responsibility for national policy, regulation, and vertical health programs. PhilHealth, the national health insurance agency, became the primary purchaser of health services. Meanwhile, LGUs assumed responsibility for service delivery — managing health facilities, employing health workers, and implementing national programs.

This hybrid arrangement blurred lines of accountability. When health outcomes fall short, responsibility becomes difficult to trace.

• If immunization coverage declines, is it the DOH’s fault for weak oversight, or the LGU’s for poor execution?

• If rural health units lack trained personnel, should the burden fall on the LGU, the regional health office, or the national human resource bureau?

In practice, decentralization has often created a governance vacuum — a system in which many actors share responsibility, but none hold clear accountability for outcomes.

Local Control vs. Local Capacity

Devolution transferred functions to LGUs, but the accompanying transfer of resources and capacity was uneven. Some provinces and cities, particularly those with strong local revenues were able to expand health services, build hospitals, and introduce innovations. Others, especially poorer municipalities, struggled to maintain basic operations.

The uneven fiscal capacity quickly became the Achilles’ heel of devolution: richer LGUs could build hospitals, hire specialists, and implement innovations; poorer ones could barely keep clinics open. The result is a persistent geographic inequality in service availability and quality — undermining one of the central principles of universal health coverage (UHC): equitable access to care regardless of where one lives.

Equally problematic is the widespread assumption that authority automatically translates into capability. Many LGUs possess formal administrative authority but lack the managerial systems, technical expertise, and data infrastructure required for effective governance. Local Health Boards (LHBs), for instance, were intended to serve as participatory governance platforms bringing together government, civil society, and community representatives. In reality, many operate only nominally — meeting infrequently, relying on limited health data, and exercising minimal influence over budgetary decisions.

In this environment, local control becomes largely symbolic. Real decision-making power often shifts upward to national programs, sideways to donor-supported projects, or inward to the discretion of powerful local executives. Without strong institutional capacity, decentralization becomes less a process of empowerment than one of delegation without support.

Reintegrating a Fragmented System

The passage of the Universal Health Care (UHC) Act of 2019 represents a recognition of these structural challenges. While devolution improved local responsiveness in some areas, it also produced fragmentation that weakened the coherence of the national health system.

The UHC reform seeks to rebuild system integration through mechanisms such as:

• Province- and city-wide health systems, designed to coordinate health services across LGUs

• Health Care Provider Networks (HCPNs) linking primary care, hospitals, and specialized services

• Shared governance arrangements through expanded local health boards

• Pooled financing mechanisms, particularly the Special Health Fund (SHF)

These reforms aim to create a more coordinated system without fully reversing decentralization.

Yet the political economy of reintegration is complex. Some LGUs perceive integration mechanisms as encroachments on local autonomy. Others welcome them as relief from administrative and fiscal pressures they cannot manage alone. This tension exposes the central paradox of decentralization: reforms originally pursued autonomy in the name of empowerment, yet today integration is pursued in the name of system coherence.

Rethinking Local Governance: From Autonomy to Alignment

The real illusion is not in believing that local governments can manage health — many can, and some excel. It lies in assuming that devolution automatically produces empowerment. Power is not transferred solely through legislation; it is exercised through capability, resources, and institutional trust. Without these foundations, local governments risk becoming intermediaries — responsible for implementing national priorities but lacking the means to shape them.

The same applies to citizen participation. Decentralization does not automatically generate community voice. Without institutionalized mechanisms for transparency, participation, and accountability, the promise of “people-centered governance” remains largely rhetorical. In practice, decentralization without systems thinking can fragment responsibility while weakening coordination.

The next generation of reform must move beyond the false dichotomy of centralized versus decentralized. The question is not who controls but how systems align.

Future governance models should aim to:

• Balance autonomy with accountability. Local actors should retain flexibility, but within a framework of shared national goals and measurable performance standards.

• Build capacity before delegation. Effective decentralization requires sustained investments in leadership development, management systems, health information infrastructure, and institutional learning.

• Enable joint stewardship. National agencies and local governments must share responsibility for outcomes rather than operating as parallel systems.

Ultimately, decentralization must evolve into distributed governance — a system in which authority is shared, capabilities are strengthened across levels, and accountability for health outcomes is collective. It was never meant to be an end in itself. Its purpose was to bring the health system closer to people. Yet over time, structural rearrangements were often mistaken for genuine reform.

The challenge now is not to reverse decentralization, but to rebalance it — designing governance arrangements in which local leadership, national stewardship, and community participation reinforce rather than undermine one another. RX