New Institutional Economics and the Philippines

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New Institutional Economics and the Philippines

New Institutional Economics offers a way to examine the dynamics of growth -particularly with an eye toward explaining the problems of slow growth in developing economies, where market systems may be presumed to be weak or incomplete. I will review these concepts within the framework of the Philippines, a sizable country with a rich and diverse set of resources, which however is not achieving significant growth.

At present the Philippines is in a depressed albeit not grim state. It remains firmly enmeshed in the World Banks lower middle income category of nations with a GDP per capita of $1,050 (U.S. 1998 Atlas method). 38% of the Philippines population is below the national poverty line. And it has one of the higher population growth rates in the region at 2.7% which will double the population within 30 years if continued1. Growth rate of GDP per capita in the period 1988 to 1998 was only 1.3%. Its total debt in 1998 was 73% of Gross Domestic Product and this is a growing percentage through the last decade. The overall story on exports is not clear, but traditional export products and categories (sugar, coconut oil /related products, rice, and timber) are not growing. Perhaps the most notable element is the degree to which it has not shared in regional growth. As noted by Yoshihara Kunio, relative per capita GNP between the Philippines and Thailand has reversed in the last 40 to 50 years (Yoshihara, 2). One reason for this is the tremendously damaging twenty year government of Ferdinand Marcos which among many other things left the county in an extremely indebted state at the onset of a world wide recession in the late 1980’s. A period of relative political instability follo...

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...ent of the New Institutional Economics.” Harriss 27-48.

-Toye, John “ the NIE and its Implications for Development Theory.” Harriss 49-70.

-Harriss-White, Barbara. “Maps & Lndscps: Grain Markets in S. Asia.” Harriss 87-108.

Kelly, Philip F. Landscapes of Globalization: Human Geographies of Economic Change in the Philippines. London/New York Routledge, 2000.

U.S. State Department. Background notes: Philippines, August 1999. Washington DC . http://www.state.gov/www/background_notes/Philippines

-1999 Country Reports on Economic Policy and Trade Practice U. S. Dept. of State March 2000 (Philippines PDF ,obtained from internal link previous cite).

World Bank. Philippines at a glance (PDF). Washington D.C . http://worldbank.org/.

Yoshihara, Kunio. the Nation and Economic Growth: the Philippines and Thailand. Kuala Lumpur/Oxford: Oxford Univ Press, 1994.

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