Discretionary versus non-discretionary incentive

A non-discretionary incentive pays out when a stated condition is met. Meet the test, receive the money, whoever you are. A discretionary incentive is awarded by a body choosing among applicants, which means the choosing is the mechanism and being known to the choosers is part of qualifying.

Both kinds are legitimate and they distribute opportunity very differently. The Philippines briefly had one of the first kind: a film graded A by an evaluation board had the full amusement tax collected on it returned to its producer automatically, on the assessed work rather than on an application. The Supreme Court struck the scheme down in 2015 on local fiscal autonomy grounds, and the reasoning was sound. What remains is discretionary in every case: grants with selection committees, festival seed money, cash rebates with application cycles, and local government generosity case by case. That is why the course keeps saying discretionary money favours the connected. It is not an accusation about anybody’s integrity. It is a description of what a selection process is.

Source: Republic Act 9167, Section 13(a), which entitled a Grade A film’s producer to 100 percent of the amusement tax collected on it and a Grade B film’s producer to 65 percent, https://lawphil.net/statutes/repacts/ra2002/ra_9167_2002.html . Struck down in Film Development Council of the Philippines v. Colon Heritage Realty Corporation, G.R. No. 203754, 16 June 2015, https://lawphil.net/judjuris/juri2015/jun2015/gr_203754_2015.html , final on 15 October 2019. The distinction itself is standard incentive-policy vocabulary; the application to the Philippine case is the course’s, argued in section 11 of the Cinema research map.

First used in: 3.7 · The industry you are actually walking into