Arsenio M. Balisacan

Revisiting growth and poverty reduction in Indonesia : what do subnational data show?

Indonesia has an impressive record of economic growth and poverty reduction over the past two decades. The growth-poverty nexus appears strong at the aggregate level. However, newly constructed panel data on the countrys 285 districts reveal huge differences in poverty change, subnational economic growth and local attributes across the country. The results of econometric analysis show that growth is not the only factor to affect the rate of poverty change; other factors also directly influence the welfare of the poor, as well as having an indirect effect through their impact on growth itself. Among the critical ones are infrastructure, human capital, agricultural price incentives and access to technology. While fostering economic growth is crucial, a more complete poverty reduction strategy should take these relevant factors into account. In the context of ecentralisation, subnational analysis can be an instructive approach to examining local governance in relation to growth and poverty reduction.

Growth, Inequality and Politics Revisited: A Developing-Country Case

Key issues in the empirical study on growth are addressed using provincial data in the Philippines. We find a high rate of absolute convergence, a positive relationship between inequality and growth, and a positive relationship between political competitiveness and growth.

The Rural Road to Poverty Reduction: Some Lessons from the Philippine Experience

This paper examines how government policies and institutional arrangements affect rural welfare outcomes. Reviewing the Philippine experience, it shows that inappropriate policies and institutions stifle the response of the rural sector to agricultural growth, with adverse effects on the rural poor and overall economic development. Besides economic growth, policies that foster rural infrastructure, favorable agricultural terms of trade, and agrarian reform lead to poverty reduction. However, weak institutions slow the implementation of agrarian reform. Thus, unless agrarian reform can be achieved swiftly, rural development strategies should better focus on investments in physical and social infrastructures, research and technology transfer, SME development, and enforcement of contracts.

Poverty Targeting in the Philippines

Following a comprehensive overview by the editor, this book offers a detailed assessment of the results of directly channelling resources to the poor and extensively discusses the experience of five Asian countries – India, Indonesia, the People’s Republic of China, the Philippines and Thailand.

The Philippine Development Puzzle

Introduction The Philippines is one of the worlds major development puzzles. In the immediate aftermath of the Pacific War, and despite extensive wartime destruction, it had one of the highest per capita incomes in East Asia: above South Korea and Taiwan; significantly higher than Thailand, Indonesia, and China; and below only Japan, the then Malaya, and the city states of Hong Kong and Singapore. Among newly independent countries, its initial conditions were favourable. American rule from 1898 had been comparatively benign by colonial standards. The transition to formal independence was relatively painless, compared with some of its neighbours. Also unlike some of its neighbours, it had no really serious communal or ethnic divides. Its education standards were amongst the highest in the developing world. By dint of its colonial experience, it had privileged access to the market of the worlds largest economy, a facility that continued until the expiration of the Laurel-Langley Agreement in 1974. The countrys civil institutions were comparatively well developed, too. It possessed a reasonably democratic political system, albeit of the winner-takes-all variety. Its judiciary and legal system were quite well developed and somewhat independent. Its press was open and vigorous. Finally, while not especially resource-rich, the country possessed ample agricultural land to sustain a generation and more of rapid agricultural growth. Yet its development outcomes have been disappointing by any yardstick. In 2000, its real per capita gross domestic product (GDP) was about the same as that of 1980 (see Figure 1). Its per capita income was overtaken by South Korea and Taiwan in the 1950s, Thailand in the 1970s, Indonesia in the 1980s, and China in the 1990s (see Figure 2). It missed out almost completely on the Asian boom from the late 1970s until the mid-1990s (see Table 1). In particular, the restructuring from the mid-1980s, which witnessed the large-scale migration of labour-intensive industries to China and the lower-wage ASEAN economies, largely bypassed the Philippines. By the 1980s and early 1990s, the Philippines became an increasingly marginal player in the regions trade and investment

In Search of a Strategy for Making Growth More Pro-Poor in the Philippines

Despite the large and expanding literature on pro-poor growth, quantitative studies identifying potential determinants of pro-poor growth remain scarce. This paper addresses this lacuna in the literature for the case of the Philippines. The main driver of rural poverty reduction has shifted from agricultural to non-agricultural growth in the Philippines, but agricultural investments can be still effective in areas with underdeveloped infrastructure. Non-agricultural income growth, on the other hand, can be made more pro-poor by reducing child mortality, facilitating international labor migration, investing in roads, and reducing income inequality.

The Principles and Practice of Sustainable Economic Development: Overview and Synthesis

This chapter provides a summary of this volume, which pays tribute to the work of James Roumasset in the areas of economic development policy, behavior and organization in agriculture, and environmental resources such as energy and water. The authors in this volume are either his longtime collaborators and colleagues or his former students and associates, many of whom are making their own contributions in applying sound economic principles toward understanding problems of development, agriculture, environment, and governance.

The Growth–Poverty Nexus: Multidimensional Poverty in the Philippines

Poverty, a multidimensional phenomenon, is no longer debatable. This study employs the Alkire–Foster aggregation methodology, which preserves the “dashboard” of dimensions of poverty, to systematically assess the magnitude, intensity, and sources of multidimensional poverty over the past two decades and across subpopulation groups in the Philippines. It finds that what is generally known about the country’s performance in poverty reduction in recent years, as seen in income measures of poverty, is quite different from what the lens of multidimensional poverty measures reveals. While income-based poverty remained largely unaffected by economic growth during the past decade, multidimensional poverty did actually decline. Moreover, the diversity of both deprivation intensity and magnitude of poverty across geographic areas and sectors of the Philippine society is enormous, suggesting that, beyond growth, much needs to be done to make development more inclusive.