The impact of financial autonomy on irrigation system performance in the Philippines
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An assessment is made of the impact of removing operating subsidies to the Philippine National Irrigation Administration on the performance of its canal irrigation systems. The shift was found to have reduced staffing levels and lowered operating expenses, while real irrigation fee-based income held constant. Concurrent changes in operating rules and procedures led to an apparent increase in equity of water distribution in the agency's irrigation systems, resulting in a projected 13% increase in area irrigated had water supply remained constant. This change was significant at the 95% confidence level. This outcome is consistent with income-maximizing behavior on the part of the agency, since it expands billable area and revenue potential. The observed improvement in system performance is seen as a consequence of the shift to agency financial autonomy.
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