Missing the Point

In the last of a three-part series entitled PNoy’s Poverty Challenge, Malou Mangahas and Che de los Reyes writing for the Philippine Center for Investigative Journalism  or PCIJ speak of PNoy’s Bold Blows vs Corruption, Cautious Steps  vs Poverty. They are referring to his campaign slogan, kung walang corrupt, walang mahirap (which essentially presumes that corruption leads to, if not exacerbates, poverty, and that reducing corruption will help alleviate it).

They state that

while his first two months in office marked vigorous efforts to address the first part – filing suit against alleged tax evaders nearly weekly, creating a “Truth Commission” to hound crooks of the old regime, and firing midnight appointees of his predecessor Gloria Macapagal Arroyo – he has announced only tentative and inchoate initiatives to address the second part.

Their basic complaint seems to be that PNoy is muddling through: failing to craft a narrative that builds on his presidential campaign–failing to communicate with the public his strategy for improving their plight, having been the first candidate since Erap to bring the poor under his tent.  They argue that

(m)uch like Cory, Noynoy Aquino came to power backed by a company of similarly reform-minded if variously motivated political allies with consensus on general policy themes but not on concrete programs or policies.

There are really two things to say in response to this. One, the cases against tax evaders and the investigation of Mrs Arroyo are not really bold, new ideas, nor should they be considered the be-all and end-all of the anti-corruption campaign. Two, to expect some bold new initiative to target poverty to be rolled out on Day 1, makes light of how difficult it is to get a handle on this complex social phenomenon.

First, the revival of RATE (run after tax evaders) and RATS (run after smugglers) programs both originally conceived under Mrs Arroyo are more about improving enforcement and collection efficiency than about fighting corruption. The positive results of these initiatives witnessed during the early part of her administration is the main reason for their adoption by her successor. Also, as we saw under Mrs Arroyo, you can prosecute and jail a former president for plunder, but that does not necessarily mean that you have lowered corruption. The premise of the argument is flawed. These are not bold new initiatives. They have all been tried before at some point, in one form or another.

If in fact he took his slogan to be gospel truth, then PNoy should have prioritized law enforcement and anti-corruption in his first budget statement. The only thing remotely related to it that received mention was the ongoing computerization of the BIR. This is hardly what you may call “bold”. In fact, PNoy seemed to be taking the direct route to fighting poverty by assigning the largest spending increase in both absolute and percentage terms to DepEd and the DSWD respectively.

Second, poverty is a complex social phenomenon. When it comes to finding a solution to this “wicked” problem, we are practically flying blind in the dark. In fact, rather than engaging in bold new social experiments (like Mao’s Cultural Revolution, LBJ’s Fair Deal or Marcos’s New Society), we are actually much better-off conducting small scale experiments throughout the country based on different ideas, gathering evidence regarding the efficacy of each one and proceeding from there. Creating a tournament across various programs will filter out of the poor ones and strengthen the ones that remain.

Small, not Bold, is Beautiful

By taking small, incremental steps, the administration avoids many of the costly mistakes associated with big social experiments that are often attended to and defended with dogmatic or  ideological  zeal derived as they usually are from some cult of personality.

Most noticeable in its first budget is the manner with which the administration intends to scrap, scale up and scale down certain programs inherited from the Arroyo regime based not on political calculation, but on empirical evidence. In other words, based on a zero-based budgeting approach, it seeks to allocate resources to programs with the largest returns from a public value perspective as derived from proper monitoring and evaluation. This of course does not grab headlines, but neither can it be called “inchoate” or “tentative”.

Take the scrapping of the rice subsidy program.

The NFA has been managing these subsidies for decades. Despite volumes of evidence showing that it in fact does not achieve what it was originally designed to, it was supercharged and put on steroids under the previous administration. The re-channeling of funds away from it and the up-sizing of the conditional cash transfers (or CCT begun under Mrs Arroyo as the 4P’s) is again based on studies that reveal the efficacy of the CCT in the Philippines and elsewhere.

The scaling down or re-tooling of other programs such as Food for School and farm inputs (programs run by Mrs Arroyo) is again based on reports that point to their design flaws which may be corrected with proper management under the most relevant agency, the DSWD which has a national household income targeting system.

The capacity to depoliticize these programs by subjecting them to the rigors of empirical evaluation is actually a far better way to govern. Much as we would like to bash whoever resides in Malacanang, we should give credit where it is due.  Now consider what would have happened had PNoy started from scratch with a bold, new social experiment and branded it with his initials like what previous presidents have done. If the program eventually failed, he would be hard put to scale it down. He would in fact be committed to perpetuating failure. A lot of public money has been wasted because of such “ownership” issues.

Thank God he has not succumbed to that!

P.S. Based on prior experience, what other programs do you think should the government probably scrap, scale down or supersize in the future?

Doy Santos aka The Cusp

Doy Santos is an international development consultant who shuttles between Australia and the Philippines. He maintains a blog called The Cusp: A discussion of new thinking, new schools of thought and fresh ideas on public policy (www.thecusponline.org) and tweets as @thecusponline. He holds a Master in Development Economics from the University of the Philippines and an MS in Public Policy from Carnegie Mellon University.

  • You are approaching the problem of corruption and poverty from the angle financial constraints. I am approaching these phenomena from the angle of market failures driven by deeper social failures. It is an interesting conversation to have as long as we are open and willing to accommodate each others’ points of view.

  • I see your point, my concerns are more for the fact that in your article you state “They are referring to his campaign slogan, kung walang corrupt, walang mahirap (which essentially presumes that corruption leads to, if not exacerbates, poverty, and that reducing corruption will help alleviate it).” I can not see that SOCIAL experiments have anything to do with alleviating corruption or poverty. Only a Physical experiment is the proper avenue here. My point being that if you want to talk about poverty and corruption Social experiments of any magnitude are of very little value. Those come later when the hearts and minds of the people are not focused on where their next meal is coming from. I’m not detracting from you article, but I’m pointing out that there are many things that need a clear focus right now, getting sidelined in a Social Experiment is unwise be it any size. Thanks for the feedback.

  • M&M Borders, thanks for your feedback. I will seek to address your lengthy concerns about the piece as succinctly as possible by clarifying the definition of a social experiment as follows:

    1. Any kind of physical infrastructure like a hi-way system cannot be called a SOCIAL experiment for the simple reason that they are physical and not social in nature. Examples of big social experiments include Mao’s Cultural Revolution, Marcos’s New Society, Pol Pot’s agricultural Shangri-La. They have been proven very costly in terms of money and human lives.
    2. A small social experiment is a public rather than a private endeavor, e.g. socialised housing, socialised health, etc. A private business venture launched by a private individual or company for private benefit is not a social experiment.
    Small social experiments attempt to provide evidence as to which policy lever best addresses a specific social dilemma (like alcoholism, HIV or malnutrition) thru small pilot projects so that policy makers can then allocate adequate resources to finance the best mix of options later on with a wider scope of program recipients. Case in point is the CCT program scaled up by PNoy’s budget statement.

    Again thanks for sharing your thoughts. Hope this clarifies things.

  • In your Second point; Are you out of your mind? This is not a new problem, many societies have faced these challenges before, Bold New Social Experiments are a vivid and valuable guide that have proved themselves in history, these Experiments, right or wrong, helps us know the right decisions to make based on the outcome of that previous experiment. See http://en.wikipedia.org/wiki/Interstate_Highway_System partially quoted below:
    The Dwight D. Eisenhower National System of Interstate and Defense Highways, commonly called the Interstate Highway System, Interstate Freeway System (or simply the Interstate), is a network of limited-access roadways (also called freeways or expressways) in the United States. It is named for President Dwight D. Eisenhower, who championed its formation. As of 2006, the system has a total length of 46,876 miles (75,440 km),[1] making it both the largest highway system in the world and the largest public works project in history.[2] The Interstate Highway System is a subsystem of the National Highway System.
    This freeway system serves nearly all major U.S. cities, with many Interstates passing through downtown areas. The distribution of virtually all goods and services involves Interstate Highways at some point.[3] Residents of American cities commonly use urban Interstates to travel to their places of work. The vast majority of long-distance ground travel, whether for vacation or business, uses the national road network.[4] Of these trips, about one-third (by the total number of miles driven in the country in 2003) use the Interstate system.[5]
    Further, small scale experiment? Have you lost all reason and logic completely? Experiments where you will be asking someone to risk maybe their entire livelihood if the experiment does not work? How despicable a notion that is, let’s put this in perspective if you will allow. A British friend of mine related a story to me of a friend of his, another British Gentleman, who came to the Philippines to live with his wife and help the economy of their chosen community by opening a business that would employ several people. SOP’s, Graft and Corruption, and “Crab Mentality” and “I got to get mine first attitude.” presented him with one delay after another. (It seems that no one in the Philippines understands the expression: “Time is Money”). Eventually all those struggles took its toll on this man’s good natured and caring personality. A man who came here to be happy while also helping his adopted home, took his own life in desperation. How despicable a community that must have been, to allow a generous honorable man to reach the point that it seemed better to end his life since he had nothing left. The question for each of you right now; Is that the only time something like this has happened? The answer is no, it’s not. Right now in Lianga, Surigao del Sur, there is a man who faces the same problems with the same results, but fortunately this man is a fighter. This man has the resolve to see this through to the very end. This man is willing to give his life in a fight that might one day free this country from Corruption. But this man will not take his own life in desperation, no my good friends and neighbors, this man will fight with all his energy and might to get for each of you that which above all else you deserve. Freedom from this terrorist act called Corruption. Let’s call it what it is, it is a act that puts fear into those who are forced to give the SOP’s, Graft, Corruption. What is terrorism???
    Join us at our blog at http://stchristine.blogspot.com/ or join with us in this fight at http://www.facebook.com/mark.and.merejen

  • Btw one doesn’t have to be a policy analyst to evaluate these proposals. On the contrary, these ideas must first pass the common sense test to be worthy of consideration in my view.

  • The Ramos administration had I believe a subsidy program to bring home scientists and engineers. I wonder whatever happened to it. Then there is the ongoing one that offers loans to returning OFWs for livelihood projects involving the purchase of capital goods. I wonder how successful these were though.

    About giving tax rebates to new hires, it would be cheaper than engaging in public works projects. It can be targeted to firms in the countryside or the ones engaged in agribusiness perhaps or technology firms. It will essentially be a one-off payment for keeping people for more than 90 days in employment. It will be paid for by increased payroll taxes. The people hired should be those who have been unemployed for more than six months to a year.

  • UP nn grad

    The Paranaque Spillway is still waiting — who knows if it is 2012 or 2013 when another heavy-duty Ondoy visits metro-Manila.

    And a project to hire more rural-poor which is also beneficial to food self-sufficiency — irrigation.

  • UP nn grad

    There may be copies in the “Noynoy campaign promises” section of proPinoy, but Noynoy during the campaign mentioned infrastructure projects for Pilipinas where Noynoy administration will make effort so that during the projects, there is focus on hiring more workers (I suppose by depending less on labor-saving devices like graders).

  • Felicity

    Bring home our OFWs who have learned valuable skills abroad. Provide competitive compensation to attract our Filipino professionals to come back home. Like in America, tax credits/subsidies/stimulus dollars are short term solutions. Our problem is we have many good minds but not the right environment to foster them. IMO, that should be the idea behind it — to reverse the brain drain. Not only invest money but invest self/skills in country. The HOW is something that should be deliberated though; I’m not a policy expert.

  • What sort of programs would work in your opinion? Should we give tax credits to companies that hire new workers? What about subsidies to those that will hire apprentices and trainees?

  • UP nn grad

    Noynoy Administration has been saddeningly quiet about any initiatives to create jobs. Even programs that create more OFW’s will be welcome, but preferred will be programs that create jobs for Pinoys in Pinoys.

  • In effect, it is a philosophical difference, not just a problem that has to do with “messaging” in your opinion?

  • UP nn grad

    A program that Noynoy administration can easily triple the funding for without breaking the bank — funding for condoms, “the pill”, well-baby care, health initiatives for expectant mothers. The barrier to condoms and health-initiatives for pregnant mothers is the CBCP, not the budget.

  • UP nn grad

    I am impressed that Noynoy has increased the funding for CCT. This is a change — pushing GINI (poverty reduction) over GDP (growing the economy). And this is not acclaimed by all Filipinos. In Pilipinas Congress and even inside the Yellow Army, there are those who look at pro-poor programs as dole-outs and inefficient utilization of limited money and/or throwing good money after bad.