Digitalization, Decentralization and a Culture of Learning: Sowing the Seeds for Effective and Sustained Public Sector Rightsizing

In the Philippines, the strengths and weaknesses of both the central and local bureaucracies have been revealed by the recent pandemic, encompassing coordination hurdles, limited capacities, complex partnerships, data deficiencies, and the imperative of digitalization. With the nation striving to build back better after the pandemic, calls for public sector reform— and the need to rightsize the government—reflect the increased urgency for more effective and improved provision of public services. Government rightsizing can be understood to reach the end goal of better provision of public services—guided by answering the inter-related questions of What to produce, How to produce and For whom to produce these public services. Hence, rightsizing may entail expanded public sector investments and activities in some key areas, and rationalization and streamlining in others. Rather than produce yet another rightsizing study recommending specific spending cuts and rationalization, and investments, this paper takes a different approach by focusing on the bigger picture of government rightsizing in the Philippines. It reviews the literature and policy experience on rightsizing, as well as the emerging enabling conditions for this. It supplements this broad review with key informant interviews in order to develop a proposed policy framework (along with an operational guide) for organizing more effective and sustained rightsizing in the Philippine public sector, offering guidance and insights to legislators for finalizing (and implementing) the House Bill No. 7240 which shall be known upon enactment as the National Government Rightsizing Act. The goal here is to see beyond the immediate details of individual agencies, projects and programs that require rightsizing analysis—rather to look at the broader canvass of the role of the State and way reformists have approached the rightsizing agenda. With a focus on the national government, this paper argues that in order to set the stage for more effective and sustained rightsizing, reformists need to take a step back and support some key enablers and possible game-changers, such as digitalization, the present impetus of decentralization, and a culture of learning with strong monitoring, evaluation, and data-enabled decisionmaking. There are key legislative reforms under the Marcos administration (with attendant budgetary implications) along these lines, which this paper supports with evidence and specific policy recommendations.