This paper was written to assist NAPC in formulating a capability-building program that will make most efficient and effective use of the People's Development Trust Fund for the benefit of micro-finance institutions and their clients. In doing so, it looks into the sufficiency of these funds to accommodate or match the capability-building needs of the […]
At a personal level, we intuitively know that trading our labor (then
using the money wages as the means of transactions) gives us a higher standard of living than if we tried to produce everything ourselves. As individuals, we know and act on the knowledge that specialization enhances our individual incomes and wealth.
But this knowledge does not seem to hold in our perceptions of the
national economy. We know that a country will be wealthier and have a better life if the country specializes in producing those products that it is good at producing, exporting the surplus, and using the proceeds to buy imports. Yet the notion that the gains from trade should be measured by what we import, not by what we export, is difficult for many.
Two bills currently under consideration in the legislature are of great
importance: House Bill (HB) 3339, filed by Speaker Jose de Venecia and Rep. Ben Cruz, and Senate Bill (SB) 1912 filed by Sen. Manuel Villar. Both bills are entitled: AN ACT TO PLACE SAFETY NETS FOR FILIPINO RICE PRODUCERS BY IMPOSING TARIFFS IN LIEU OF QUANTITATIVE RESTRICTIONS ON RICE IMPORTS, DIRECTING TARIFF COLLECTIONS FROM RICE IMPORTS TO PROJECTS AND PROGRAMS THAT ENHANCE RICE PRODUCTIVITY AND INCREASE FARMERS’ INCOMES, AND FOR OTHER PURPOSES – or in short, the “RICE SAFETY NET ACT OF 2001.”
Globalization is perhaps the most important of the long-run forces
driving world development today. (In the 20th century it may have been the independence movements of the colonized peoples in Asia and Africa – which, by the way, is an indication of how advanced politically the Philippines was in the second half of the 19th century, when Filipinos began their agitation for national sovereignty ahead of most other countries in the region).
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.