In low income countries, government debt rose by 7 percent to 66 percent in 2020 and, since 2021, half of those countries are at high risk of debt distress or already in debt distress. Without being able to anticipate the next global crisis, there is increasing urgency to mobilize domestic resources to promote sustained economic growth. To address the root causes of resource mobilization (or lack thereof), we need to think beyond “what” we need to do – increase tax revenue, improve audits, strengthen public financial management – and think about “how” we are going to do it. The “how” is simple: to mobilize domestic resources we also need to mobilize people.
Since 2019, the USAID Philippines Delivering Effective Government for Competitiveness and Inclusive Growth (DELIVER) project, implemented by Chemonics, has been working with the Filipino government to mobilize domestic resources and help rebuild the fiscal space in the Philippines by building coalitions, working through champions, and changing people’s behaviors. By applying a human-centered lens to domestic resource mobilization, and promoting locally led development, DELIVER achieved accelerated impact by helping the Filipino government pass trailblazing tax regulation and facilitate $7.45 billion in tax generating investments.
Build Coalitions for Action
Mobilizing domestic resources requires expert coordination and alignment between government, civil society, and the private sector. To achieve results, a key pillar of DELIVER’s approach was to build coalitions and co-design local solutions for change. At the beginning of the project, the DELIVER team organized a co-creation workshop with their stakeholders to understand the state of reforms, their timeline, and design fit-for-purpose plans for each stakeholder group. To support the roll out of the Garcia Supreme Court ruling that adjusted local government’s share from the national revenue to improve locally led development programs and service delivery, DELIVER engaged 1,200 national government and local government officials across the Philippines to establish a quasi-intergovernmental relations platform. By building coalitions, projects can convene diverse stakeholder groups to align interest, generate buy-in, and stimulate action for reform.
Leverage your Champions
Mobilizing domestic resources can only be achieved by knowing how to navigate through bureaucratic red tape. To succeed, projects should identify and engage reform-minded champions to advocate and accelerate change. In the Philippines, the DELIVER team had to work with government institutions to operationalize new processes and policies during two political transitions that, if not managed properly, could derail the country’s reform agenda. DELIVER expertly navigated through these events by strategically networking with reform-minded champions from the government and civil society. Champions helped pass the DELIVER-backed recommendations to the Ease of Paying Taxes Bill through the Senate, which will institutionalize holistic modernization of tax administration, improve voluntary tax compliance, and boost revenue collection.
Pair Systems with Behavior Change
New tools can help governments become more efficient at managing and generating domestic resources but, by themselves, they are not a solution. People need to understand what the tools are, why they matter, and how to use them. Tools that help mobilize domestic resources need robust communications and capacity building campaigns to change behaviors and promote long-lasting user adoption. In the Philippines, DELIVER worked closely with its partners to develop a comprehensive communications and outreach strategy for the Taxpayer FIRST campaign, a people-centric initiative that improved taxpayer services through Fast, Innovative, Reliable, Secure, and Technology-driven development. The streamlined content and branding strategy saw the Taxpayer FIRST digital tools become widely adopted by taxpayers in the Philippines, growing the number of electronic tax filers from 25% to 83% in seven years. DELIVER also trained the Philippines Fiscal Incentive’s Review Board (FIRB) to adopt the USAID-backed Fiscal Incentives Registration and Monitoring System (FIRMS) and cost-benefit analysis tools to improve the allocation and management of fiscal incentives. The FIRB’s newly trained staff used the tools to facilitate $7.45 billion worth of investments while maximizing tax revenues.
As countries, like the Philippines, adopt post-COVID fiscal policies to stabilize their economies, mobilizing domestic resources will be critical for achieving sustained economic growth and resilience. To be impactful, approaches to mobilizing resources need to go beyond “what” and think about the “how.” Behind government budgets, policies, and systems there are people that need to be mobilized to mobilize domestic resources – coalitions align stakeholders to co-design solutions and get buy-in for reform, champions are advocates that accelerate change, and communications campaigns and training change people’s behavior. By working with people to mobilize resources, we develop solutions with and for local actors that can last beyond our programs.
Banner image caption: Night view of Makati, the business district of Metro Manila.
Posts on the blog represent the views of the authors and do not necessarily represent the views of Chemonics.