What is in it for me?
Unlike the contentious fiscal incentives system, local governments have warmed up to the practice of an incentive system that is based on performance. Everybody seems to agree that rewarding performance can encourage people to behave in a desired way. Secretary Robredo proved that in their quest for recognition, local governments would go all the way to make policies and budgets transparent. Local governments strive to comply with government rules and regulations on financial management to obtain the Seal of Good Housekeeping. The amount of the reward can be immaterial for local governments such as cities with huge resources. Being part of the honor roll matters more.
The effective use of incentives extends to education. Mayor Rex Gatchalian discovered that incentivizing pupils to attend the summer remedial reading program does not take much--only coupons that entitle them and their families to a Jollibee meal. He recalls that one of the pupils religiously attended the program despite nursing a painful boil. His mother constantly prodded him to go to school. He was further encouraged by the rah-rah cheers of his siblings. It was the first time for their family to have a meal at Jolibee together and the pain was worth it all.
The good Mayor found out as well that parents strongly respond to incentives. Parents and teachers strongly campaigned to have a 100 percent parent participation in school activities. The reward that was at stake was a set of computers for their schools. The parents ' excitement was palpable as the Mayor announced the winners in a jampacked coliseum . It was a winwin situation. The parents took on their responsibility as "teacher-nanay or teacher-tatay" and the schools have better facilities to make the learning process more exciting.
A performance incentive system is in the psyche of many local governments. Last Friday, Governor Uy of Campostela Valley warmed up to the idea of an incentive for children who are at risk of dropping out of school. They will be given a rice allowance if they complete their schooling every week.
The international renowned expert Richard Bird maintains that incentives are justifiable if government's choices are better than those made by the private sector. This is certainly the case for incentivizing parents to prioritize the schooling of their children over opportunities to contribute to their family's income. Because of poverty, some parents would prefer to have their children to help them in the farm, work in mines and dumpsites, or look after their younger siblings. Incentives tilt the odds in favor of education. Kilos of rice in return for 100 percent attendance of children in school make the odds even. A meal at Jolibee is given a greater value than what the children will earn.
Compare this with the lack of a consensus on the effectiveness of fiscal incentives on promoting investments. In the first place, it is doubtful if government is a better judge than businesses themselves on where and how investments should be made. Studies on the effects of incentives on business decisions are also inconclusive. It has always been difficult to determine if investments would not have been made without the incentives. Would BPO companies locate somewhere else if no incentives were given? Would they have located in Singapore, Vietnam, or Thailand? Lastly it makes little sense to use tax incentives to compensate for the horrendous traffic jams, the corruption in the judiciary, and our rigid labor laws, and other market imperfections.
It seems self -serving to engage in activities that please us and do us good. But that is the rule of life. Consciously or unconsciously, we ask ourselves "what is in it for me?" We are driven intrinsically by our desires to be happy and fulfilled. But we are also influenced to by external rewards, i.e. those that will compensate for the alternatives that we give up such as time, opportunities, and resources, and make the choice that we make worthwhile.
Because we are driven by different needs and wants, Incentives should be those that will make us walk the extra mile. That incentive must be as powerful as the peanut butter sandwich that roused Charlie Brown from his sleep.
mguevara@synergeia.org.ph