Itchon

Masamoc
Roxas
Tagum
Torio
Yasa
Philippine State
Continuity in its basic patterns of interaction with
dominant economic interests
Often incapable of meeting even the most basic
infrastructural needs of the economy
Making its comprehensive analysis central to
political economy
State Apparatus
Major avenue for private accumulation
Repeatedly choked by an anarchy of particularistic
demands from:
1. Particularistic Actors oligarch and cronies (currently
favored by top officials)
Weak Institutionalization
Determinant of Business Success
Personal favor and disfavor of those currently in power
Political Administration
Personal affair
Weak Institutionalization
Determinant of Business Success
Personal favor and disfavor of those currently in power
Political Administration
Personal affair Practically depends on personal
considerations
Objectively defined official duty is unknown to the
office that is based purely upon personal relations of
subordination. Instead of bureaucratic
impartialitythe opposite principle prevails*
*(Webers description of Patrimonial State)
Patrimonial Framework
Helps us to understand two important elements of
government-business relations in the Philippines
1. High degree of favoritism
Rent Seeking Gone Wild
2. The capacity to inflict punishment on their enemies
Patrimonial Features (Postwar Philippine State)
Rarely displayed the capacity to formulate or
implement a coherent policy of economic development
Highly fractured and ineffective bureaucracy
Lacking in autonomy from dominant economic interest
Korean and Taiwanese states:
At certain crucial historical junctures enjoyed considerable
autonomy from dominant economic interest
Historical Context in understanding developing
states :
Bureaucratic capacity of the developing states in East
Asia can only be understood as part of a long historical
experience (Peter Evans)
Development models are not simple packages of
policies; they are configurations of political,
institutional, and historical events (Haggard and
Cheng)
Laissez-faire
Without state involvement in the economy
However the Philippines presents kinds of
economic problems resulting from insufficient
development of the state apparatus
World Bank
Emphasize a minimalist role of the State:
governments need to do more in those areas
where markets alone cannot be relied upon. Above
all, this means investing in education, health,
nutrition, family planning, and poverty alleviation;
building social, physical, administrative,
regulatory, and legal infrastructure of better
quality; mobilizing resources to finance public
expenditures; and providing a stable
macroeconomic foundation, without which little
can be achieve.
Limitations of the Philippine state apparatus:
1. Incapable of replicating the kind of
interventionist capacity of its East Asian
neighbors
2. Incapable of providing the basic legal and
administrative underpinnings necessary fro
free-market capitalism
Providing adequate electricity
Infrastructure
Basic regulation and administrative services
Patrimonial States
Have proved incapable of pursuing any coherent policy at all (Zaire and
Haiti)
Policy and policy-making common to relatively more advanced countries
require major modification when applied to states with strong
patrimonial features
The essential business of the state minister is not to make policy. It is to
modify the application of rules and regulations on a particularistic basis,
in return for money and/or loyalty. (Robert Wade talking of India)
In 1960, the transitional societies in Southeast Asia have not fully
incorporated the view common to rational-legal systems of authority that
the appropriate goal of politics is the production of public policy in the
form of laws. Rather, power and prestige are often treated as values to be
fully enjoyed fro their own sake and not to rationalized into mere means
to achieve policy goals. (Lucian Pye)
1967 in the Philippine policymaking; political competition among the elite
did not involve policy, but power and the distribution of spoils. (David
Wurfel)
Capitalism in a Patrimonial State
(Weber) Bureaucratic actions are often highly
arbitrary, only certain types of politically
determined capitalism are able to thrive
Such from of capitalism often reach a very high level
of development
Absence of calculability in thee political sphere
ultimately inhibits the development of more
advanced forms of capitalist accumulation
Typologies of Capitalism:
Rent Capitalism
Overarching term to describe a system in which
money is invested in arrangements for appropriating
wealth which has already been produced rather than
in arrangements for actually producing it
Production-oriented Capitalism
Standard Categorization of Capitalism in developing
countries:
Philippines
Fall somewhere along a continuum between laissez-faire
and statist model
Key economy does not exhibit key characteristics of either
typology
Laissez-faire and statist capitalism dichotomy:
Highlights the two vital dimensions:
1. Intra-capitalist variation relative strengths of the state
apparatuses and business interest
2. Variation among state apparatuses like patrimonial
feature
Matrix of Elements of Capitalism
Statist
Capitalism
(developmental
state)
Laissez-faire
Capitalism
(regulatory
state)
Bureaucratic
Capitalism
(Patrimonial
administrative
state)
Booty
Capitalism
(patrimonial
oligarchic state)
State apparatus relatively
stronger
Vis--vis business interest
State apparatus relatively
weaker
Vis--vis business interest
Relatively more rational-
legal state
Relatively more
patrimonial state
Explanation of the Matrix
Upper Portion
Form of production-oriented capitalism differentiated according to
the relative strength of state apparatuses and business interest
Lower Portion
Distinguishing between types of rent capitalism both having
foundations of a relatively patrimonial state
Bureaucratic Capitalism
Bureaucratic elite extracts privilege from weak business class
Built on the foundation of a Patrimonial administrative state
Booty Capitalism
Powerful business class extracts privilege from incoherent bureaucracy
Arises out from a political foundation of Patrimonial oligarchic state
Thus aiming to achieve a more accurate characterization of Philippine
capitalism
Philippine Economy (Montes)
Rent Seeking Economy
Society ownership of property alone guarantee the access
to wealth and the operations of the state determine the
assignment of and the continued enjoyment of economic
advantages
In contrast to Profit Seeking Economy
Productivity improving economic activities
Assets and income are won and lost on the basis of the
ability of the business owner to develop the
propertyoperations must be organized to produce a
surplus and surpluses earned in the operation must be
correctly reinvested
Oligarchic collectors of booty in the Philippines
well organized at a level of the family conglomerate
Poorly organized at any broader level of aggregation
Little separation between enterprise and household
Social Mobility
As new families appear out of nowhere and some of the
old families fall by the wayside.
Highlights the appropriateness of the term oligarchy for
analysis of the Philippine political economy
Philippine not a fixed aristocracy but rather a social
group that is based on wealth and that changes over time
As Aristotle puts it, oligarchy is rule for the benefit of the
men of means not rule for the common good
State role
External economic relations
It disburses aid and loans received from abroad and its sets
policies on foreign exchange, trade, and investment
Policy making
External forces play key role in maintaining both the physical
and economic viability of the state
Countrys role as host of the US military bases
Countries geopolitical importance entailed foreign aid
missions and multilateral agencies
Thus the combination of poorly developed state apparatus, a
powerful oligarchy, and ready support from an external
military power has left the Philippines with a booty
capitalism
Implications of a booty capitalistic structure
A kind of private sector imitative overwhelms an
externally stocked but nonetheless weak state in the
quest for particularistic resources
Not self-sustaining
Ultimately depends on the international dole
However withdrawal would bring an increase of
pressure to begin to orient the system towards more
internationally competitive modes of operation
Reasons of why the power of the oligarchy so clearly overwhelms the power
of the state.
16
th
and 17
th
century
Spanish colonizers encountered a very localized political unit
Unlike much of the Latin America which was clearly a organic statist colony the
Philippines was neither organic nor statist
Spaniards were attracted to galleon trade making few developed strong ties to
agricultural or other ventures based in the local economy
19
th
century
Strengthening of the agricultural commercialization
Manila was no longer the single entrepot it had been during the years of the galleon
trade
Making regional economies each had their own separate ties with the world market
Strong centrifugal forces that weakened the emerging nation (Alfred McCoy)
Unlike Thailand and Indonesia bureaucratic-aristocracy elites which had descended
from pre-colonial kingdoms were strengthened by the commercialization of
agriculture (Harold Crouch)
This gave rise to a new class landowners who were quite separate from the
bureaucracy economic base was firmly outside central state
Reasons of why the power of the oligarchy so clearly overwhelms the power
of the state.
19
th
century
1899 these landowners formed the primary social base for the first Republic of the
Philippines
Americans successfully co-opted local caciques into newly formed political
institutions, they never effectively undercut their base of power at the local level
The American superimposed a weak central state over a polity of quite autonomous
local centers of power
Reinforcing the decentralized nature of the Philippines by concentrating on the
introduction of representative institutional bureaucracy
Representative institutions enabled local caciques to consolidate their hold on the
national state and fostered the creation of a solid, visible national oligarchy
The oligarchs have remained highly dependent upon US aid, investment, and
counterinsurgency support
3 years after the independence the Philippine state nearly collapse
Rehabilitation assistance was plundered by the oligarchs to pay for duty-free imports
of consumers durables
There was mounting evidence that the body politic was incapable of action in the
interest of all Filipinos (Frank Golay)
Reasons of why the power of the oligarchy so clearly overwhelms the power
of the state.
Postwar years
By that time US was rising as a superpower making it difficult for the Philippines to
emerge as a truly sovereign nation
Oligarchs have needed external support to sustain unjust, inefficient, and graft-
ridden political and economic structure making Washington receive an
unrestricted access to two of its military installations
After Independence
Seemingly strengthening of patrimonial features
1. Central bureaucracy personal contacts became even more important for entrance to
the bureaucracy, and the role of competitive examination became relatively
marginal
Bureaucracy expanded rapidly especially during elections
1959 50-50 agreement between the Palace and the Congress
2. Patron-client relations were undergoing significant changes
Patron found expanded opportunities in obtaining external and office-based resources
Increased the role of state resources within longstanding patron-client relationships
3. Particularistic control over the elements of the state apparatus through a spoil
system
Civilian machinery of state remained weak and divided
Despite the growth of the bureaucracy the bureaucratic elite never emerged
Reasons of why the power of the oligarchy so
clearly overwhelms the power of the state.
Historical development in the Philippine
bureaucracy created opportunity for social
mobility that resulted I the formation of an
indigenous bureaucratic middle class
Reasons of why the power of the oligarchy so
clearly overwhelms the power of the state.
Comparative of Thailand and Philippine
Bureaucratic Culture
Philippines Thailand
Entrance in the
bureaucracy
access to public
education and the
examination
system ensured
that the civil
service did not
swiftly become a
self-perpetuating
class
entrance in
government post
was greatly
restricted by the
bureaucratic elite
bureaucracy long
subordinated to
particularistic elite interest
Elite traditionally
based in
bureaucracy
Many opportunities
outside the bureaucracy in
Manila than in Bangkok,
(prewar era) in which
many middle-class
Filipinos actually left the
bureaucracy for jobs in the
business
Old oligarchy showed
little interest into moving
to bureaucratic ventures
for they already had a firm
economic base outside the
bureaucracy
Reasons of why the power of the oligarchy so clearly overwhelms the power of the state.
US colonization was considerably oligarchy building, but very little in the way of state
building
Countless opportunities for enrichment that the American regime have brought unto to
consolidated oligarchy
As source of largesse cam in the form of preferential access for Philippine agricultural
products in American markets
Payne-Aldrich tariff act of 1909 establishing free trade between the United States and
the Philippines
US tariff and commercial policy was the most important factor in stimulating the
expansion of the Philippine coconut industry which enjoyed a tremendous advantage
over the other producers (Gary Hawes)
As source of largesse came from effective manipulation of the growing colonial state
apparatus
1913-1921 - Under democratic governor-general Francis Burton Harrison Filipino elites
began to control both houses of Congress, and considerable influence within the
executive branch through the Council of State (Governor-general, Speaker of the
House, Senate President, and Members of the Cabinet)
Bureaucracy was substantially Filipinized
Expansion of the oligarchy control of the state
Philippine National Bank the richest new source of booty for emerging national
oligarchy
Reasons of why the power of the oligarchy so
clearly overwhelms the power of the state.
Eve of Pacific War
Oligarchs enjoyed the arrangements provided by the
American colonial regime that they were loath to make
transition to independence
However independence was the last thing they desired,
precisely because it threatened the source of their huge
wealth: access to the American market (Anderson)
1946 when the independence did come, it was
accompanied by provisions that was clearly advantageous
to the landed oligarchy that controlled the state
Bilateral free trade act - ensured dependence on the
American market
$620 million in US rehabilitation assistance for war damages
Oligarchs in effect, both responded to and created new
sources of booty that could be tapped through access to
the state machinery, and their economic interest became
much more diversified (agriculture, commerce,
manufacturing, and finance)
Developments in the central bureaucracy and local
patron-client relations, as well as the expansion of
governmental economic responsibilities highlight the
seeming strengthening of patrimonial features within the
postcolonial Philippine State.
Neopatrimonial helps to capture the historical sequence
Thus the combination of historical factors bequeathed to
the postcolonial Philippine provided fertile ground for
booty capitalism
Civilian state apparatus remained weak and
divided in the face of the powerful oligarchic
interest and most of all underdeveloped
Despite changes in the regime basic patterns
persisted throughout the first forty-five years of
postwar era: while the state was plundered
internally, it was repeatedly rescued externally
Lastly, with a positive note, the withdrawal of
the US military bases in 1992 seems to have
provided a n important stimulus for initiating a
program intended to transform many basic
aspects of the operation of the Philippine
political economy