Early one morning in late November, on my way to De La Salle University for an important appointment, I hit a traffic jam that, hyperbole aside, stretched for at least a mile on Zamora Bridge, that flyover-bridge infrastructure complex that connects Valenzuela Street in Sta. Mesa and Quirino Avenue in Pandacan. The cause of the bumper-to-bumper snafu: gridlock at the Tejeron Street intersection, where cars refused to give way to those going crosswise relative to their direction. Ruing my choice of route for the day, as the minutes ticked away I tried to make the best of a bad situation by devising an economic model that offered an explanation for my predicament. What follows is the game-theoretic parable that came out of my ruminations.
Much heat has been generated by the national government’s issuance of the PEACE Bonds that resulted in the transfer of PhP1.4 billion to the Caucus of Development NGO Networks (CODE-NGO). For one, an esteemed colleague in the human development advocacy, Solita Collas-Monsod, has written that the critics’ accusation of cupidity or stupidity against ” everyone involved [with the PEACE Bonds]…reflects on their ignorance, or envy, or political opportunism.”
But a good number of critics are not the ignorant, envious and opportunist type. Our opposition to the PEACE Bonds stems from a cold analysis that CODE-NGO was engaged in impermissible rent-seeking to obtain the PhP1.4 billion.
The principal theorists on rent-seeking (J.M. Buchanan, R. Tollison, and G. Tullock) define it as “the resource-wasting activities of individuals in seeking transfers of wealth through the aegis of the state.” Similarly, R.B. Ekelund and Tollison describe rent-seeking as “activities whereby individuals seek returns from state-sanctioned monopoly rights.” Tullock views rent-seeking as “the activity of setting a monopoly or getting some other government favor.”
This piece was written on Jan. 24, 2001 – at the time that President
Gloria Macapagal-Arroyo assumed office in the wake of EDSA 2. It is
useful to revisit the recommendations outlined here for the recovery
and growth of the rural and agricultural sector, one year after the
entry of the post-Estrada administration.
Gasoline prices have been making news again. Prior to the recent
rollbacks, oil companies had hiked their prices, precipitating much
protest and renewed calls for repealing oil deregulation Meanwhile,
Cong. Enrique Garcia of Bataan has re-filed his Oil Exchange bill in
the current Congress as House Bill No. 300. It is essentially a toned
down version of last year’s bill that no longer provides for taking
over private oil firms’ physical storage facilities and terminals.
However, HB 300 Sec 4 still provides for an oil exchange…
During those weeks or months when road construction is ongoing, each time I hit Quirino Avenue and become one of the snarling mass of slow-moving vehicles on it, the question that inevitably rises out of my guts in between prayerful ejaculations (not curses, mind you) for politicians (whose CDFs fund the infrastructure project), DPWH bureaucrats, and contractors’ is WHY THE ANNUAL RESTORATION OF VIRTUALLY THE SAME PATCH OF REAL ESTATE?
This paper discusses lessons from past experiences in structural adjustment programs and concludes that structural reforms done via sector deregulation without serious accompanying institutional reforms are dangerous and are likely to experience limited success or fail altogether.
Two factors make tinkering with the tax code irresistible. One, the
BIR’s tax effort, contributing roughly 75% of National Government tax
revenue, has slid down to pre-CTRP (Comprehensive Tax Reform Package) levels. After peaking at 13% in 1997, it went down to 10.9% in 2000, lower than the 1994 BIR tax effort of 11%. Two, the revenue “crisis” comes at a time when prospects for economic recovery are bleak, and all sectors look to government to stimulate economic activity.