Setting the Philippines in Context

Michael M. Alba

De La Salle University ─ Manila

World Distribution of Relative Living Standards, 1960 and 2000

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Figure 2

Country Relative Living Standard in 2000 vs. its Relative Living Standard in 1960

TZAGNBMWIBDICOGETHUGABFALSOCHN

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Some Growth Miracles and Some Growth Disasters

Country Code

Relative Living Standard

1960

Relative Living Standard

2000

Growth Miracles

Hong Kong HKG 0.18933 0.80846

Korea, Republic of KOR 0.14753 0.57099

Thailand THA 0.07193 0.19681

Malaysia MYS 0.20239 0.42622

Growth Disasters

Niger NER 0.09088 0.02825

Venezuela VEN 0.83462 0.27510

Zambia ZMB 0.10983 0.04045

Argentina ARG 0.61815 0.39776

Philippines PHL 0.17432 0.12976

Figure 3

Relative Living Standards of ASEAN-5 and Taiwan, 1960-2000

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IDN MYS PHL SGP THA TWN

Country Code Y/LContribution from

(K/Y)α/(1 – α) h A

           

Hong Kong HKG 0.80846 1.04633 0.82775 0.93344

Korea, Republic of KOR 0.57099 1.14104 0.88540 0.56519

Malaysia MYS 0.42622 0.97212 0.73999 0.59251

Thailand THA 0.19681 1.17433 0.61823 0.27109

Argentina ARG 0.39776 0.94922 0.77439 0.54112

Venezuela VEN 0.27510 0.96959 0.58838 0.48223

Niger NER 0.02825 0.55872 0.32657 0.15481

Zambia ZMB 0.04045 0.89616 0.57778 0.07813

Philippines PHL 0.12976 0.85957 0.72081 0.20943

Levels Accounting: Ratios to US values, Selected Countries

Reason for the growth conundrum or low TFP

• Poor social infrastructure– Social infrastructure: the social norms, laws,

and government policies, and the (formal and informal) institutions that enforce them

Hall and Jones (1999)

• Roots in culture and history– Settler communities vs. extractive institutions

Acemoglu et al. (2002)

Examples of poor social infrastructure

• Flawed idea of political leadership– entitlement vs. service

• datus• cura parroco and guardia civil• sacking of the social security coffers

– self and family interests over national good• political turncoatism and dynasties• motivation behind cha-cha initiatives

• Endemic corruption– smuggling– government procurement– tax collection– hoodlums in judicial robes– COMELEC– no controls for directors of government corporations

Final points

• Suggestion– Set up an independent organization to

monitor governance situation

• Question– How does a country improve its social

infrastructure?