Earmarking

A statute that sends a named stream of revenue to a named use before it reaches the general pot. The point is not the size of the money. It is that an earmarked stream does not have to be argued for annually against every other claim on the budget, and it grows or shrinks with the activity it is attached to rather than with a minister’s priorities.

In this course it separates two kinds of fund that look identical on paper. Korea’s film fund was filled in large part by a fixed percentage of every cinema ticket sold, collected at the point of sale, so it scaled with the industry it was paying for. The Philippine Creative Industries Development Fund created in 2022 is sourced from loans, grants and donations, which means it starts from zero every cycle and has to be defended by whoever remembers to defend it. Same category of instrument, different physics, and the difference is a single clause.

The domestic case usually cited for earmarking here is the 2012 sin tax reform, which raised excise on tobacco and alcohol and directed incremental revenue to health. This course names it and does not spend it, because the source that owns the outcome evidence has not been opened.

Source: Standard public finance usage, taught here through two instances. Korea’s 3 percent box office levy for the Film Development Fund, from Jimmyn Parc, A Retrospective on the Korean Film Policies: Return of the Jedi, prepared for the European Parliament, free PDF. RA 11904, the Philippine Creative Industries Development Act, approved 28 July 2022, free full text at https://lawphil.net/statutes/repacts/ra2022/ra_11904_2022.html , which establishes its fund from “loans, grants and donations.” The Philippine sin tax reform is RA 10351, https://www.officialgazette.gov.ph/2012/12/19/republic-act-no-10351/ , with the World Bank’s free 2016 case study named as the source the course has not yet opened.

First used in: 4.4 · It has already worked here