Why all this talk of ‘institutions’ is rubbish

The Philippines is a place where development theories come to die.

This was the case in the 1950s when import substituting industrial policy or ‘picking winners’ was all the rage among development experts. The country was held up as a model of correct development planning and policy. It did not take long for us to prove that there was a flaw in this method which was that infant industries never grow up without a competent and powerful bureaucracy to direct and monitor them.

In the 1960s we flirted with liberalization, but it was a constant battle between the nationalists and internationalists that never seemed to go anywhere. Then in the 1970s the debt fuelled growth bubble came to town. The notion that underdevelopment was caused primarily by a lack of savings or capital would be fixed by borrowing externally. We also decided to emulate our ASEAN neighbors by imposing a more authoritarian model but to no avail.

In the 1980’s the bubble burst, and the country went into a steep recession followed by political upheaval. From the mid-80s we sought to steer away from the cronyism that came with authoritarian rule with varying success. We tried a Western liberal formula of economic stabilization, deregulation and privatization. It seemed to work in Eastern Europe but failed miserably in chaotic Russia. Our own experiment with it tended to emulate the latter.

The 1990s saw a rapid acceleration of trade openess with tarrifs going down faster than our external commitments to the world body, the WTO, required. We began to see more stable growth and saw poverty decline somewhat, but the growth was not fast enough to lift millions out of poverty in contrast to our rapidly developing neighbors in East Asia. These nations adopted a different formula, the BeST consensus (BEST stands for Beijing, Seoul, Taipei) which used a combination of liberalization and government intervention to strengthen their export industries.

In Latin America a resurgence of anti-capitalist regimes in country after country resulted due to the epic failure of neoliberal policies instituted earlier. The Washington elite that had peddled their development theory of open markets began to revise this paradigm. The new Washington Consensus tried to explain its earlier failures by declaring that markets needed the right set of institutions to function properly. Getting institutions right was required for markets to get prices right.

So we went down that road. Since the early 2000’s our business and political leaders have been spouting words like “rule of law”, “good governance” and “property rights” in keeping with the new consensus. It was all talk of course, but despite the fact that we suffered from weak institutions, the economy seemed to grow at a faster clip during the decade just as countries like China and Vietnam seemed to do without adopting Western legal and political institutions.

Where it began

During my undergraduate days at university in the late 80s and early 90s, there was not a single instance that I can recall when an economics professor uttered the word “institution” in class in relation to development. It was only when I entered grad school in the early 2000’s that the topic became vogue.

It became vogue because of “new evidence” that revealed its value. I remember reading “the evidence” found by a group of economists that wherever European explorers had dropped anchor and settled permanent communities on exotic shores, those communities developed into more vibrant economies many decades and centuries later compared to those that did not have that “privilege”.

The assumption made by the authors (who made names for themselves in the field and subsequently advised multilateral institutions like the World Bank) was that where these colonizers settled, they brought with them habits, practices and customs from the old world. These rules or “institutions” persisted even when they departed.

Unfortunately, I do not buy that idea. Let me tell you why:

First of all, there are good habits, and there are bad ones. Take for example Spain and its colonies. Many of the “institutions” exported by the Iberian power have not been supportive of development in the Hispanic world. Many studies have shown that former colonies who inherited the legal system of Spain and France have not progressed as much as those influenced by Anglo-Saxxon common law.

Ok, so you say, well, let us take the case of England. Its former colonies seem to be doing well. Think of the United States, Canada, Australia, Singapore, Malaysia and Hong Kong. Even India which despite languishing economically for decades since independence still managed to keep its railway lines functioning throughout the subcontinent following the habits of the Brits who count on their trains running on time. Doesn’t this prove the thesis, you ask.

Well, that’s my second point. In the case of the British Empire, it was not so much that they brought sound rules and practices with them. It was the fact that the Crown invested heavily in its colonies, nearly as much or even more than it had taken from them. You might take the establishment of a port or a walled city as a proxy for institutions, or you might see them for what they really are–public investment.

Lord Clive the baron who helped establish colonial rule over India and ran the East India Company, the world’s first multinational company put it succinctly, that it was “absurd to give men power, and to require them to live in penury.” The effective governance and riches of former British colonies are due to their willingness to devote an appropriate amount to the public purse.

This leads me to my third point, you cannot expect to have rule of law without the requisite investment. It does not occur out of “a re-awakened sense of right and wrong” or by appointing close relatives and bossom buddies to sensitive posts. We can already see where that is heading as dysfunctionalism within the PNoy Palace has claimed its first major scalp.

Implications

The current thrust of the Aquino government is to bring about Western styled institutions ‘on the cheap’ by not looking at new revenues to boost its capacity to operationalize them. In its first year, it hopes to achieve better governance while simultaneously shrinking the size and capability of the state. Instead of funding its own development by raising revenue, it relies on donor funding from external agencies and foreign governments.

That is fine if you want to wait for manna from heaven, but as the saying goes ‘heaven helps those that help themselves.’ So as a result of the unsustainability of its current model of development, it is faced with three distinct options:

  1. give up on good governance altogether in the short term, focus on growth, and then return to this down the track when it can afford to do so,
  2. go for good governance full throttle but with the accompanying investment (and by implication, raising taxes), or
  3. take a more pragmatic and targeted approach in moving the good governance agenda forward.

What I mean by the third option of using a targeted approach is that it will have to identify the forms of corruption that are tolerable (benign), and others that are not (malignant) and focus on getting rid of the latter. This is where it gets tricky. For those that take a “purist” moralistic stand on the issue and cannot countenance a return to the inglorious ways of the diminutive one, the choices are even more constrained.

So in answer to those that keep spouting words like “good governance” and “rule of law” on the one hand without factoring in the cost and accepting the need for higher taxes on the other, I say “hogwash: either put up, or shut up.” Institutions aren’t built simply out of an altruistic sense or moral revival. They are built with common sense pragmatism. The kind exhibited by Lord Clive all those years ago.

To use the RH debate as an analogy: you cannot expect people to have less children through abstinence alone; government needs to invest in reproductive health to provide better options. Just as in that debate, this one is about our willingness to produce other options aside from relying on “a few good men.”

So until we get our fiscal priorities right, I am afraid that all this talk of building institutions is just plain rubbish.

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.

  • GabbyD

    There is another version of events in ellen T’s blog.

    “LTO Chief Virginia Torres had nothing to do with the sacking of de Jesus by the President. If at all, Torres was only one of those who briefed the President on the real score involving the P 1.2 billion that Stradcom was trying hard to collect from the government, contradicting what Velasco earlier told PNoy. It was the LTO chief who refused to release the P 1.2-billion payment to Stradcom given what she described as an “anomalous contract.”

    Fact is — we have no idea what happened. fact is, we’d like a process, due process in terms of a legal case, takes too long vis-a-vis the need to determine policy.

    Fact is — the solution to this is the person that hired that person ought to control how to proceed. in other words, the hiring person, here the president, should determine what to do.

    Fact is — EVERYONE IS SECONDGUESSING THE PRESIDENT.

    Fact is — the president isnt explaining himself very well, so its PARTLY HIS FAULT.

  • J_ag

    President Clinton the failure of structural adjustment which has been a feature of Philippine economic policy for 40 years.

    http://wn.com/Structural_adjustment

    The effects today are staggering in the Philippines…..

    • UP nn grad

      President Clinton now says what World Bank/ADB economists seem to say —- strengthening a developing nation’s agricultural sector is imperative. Leapfrogging not possible. Quote : “You can’t take the food chain out of “… production.

      Maybe that’s the reason USA is funding the Samar roads ; at least for that part of Pilipinas, better farm-to-market and better village-to-village road structure supports the food chain activities. Lucky the funds (for Samar farm-to-market and other roads) are USA-controlled, not Malacanang controlled.

    • Not just Clinton but his former chief economic advisor and former WB chief economist Joe Stiglitz has been scathing of the IMF’s ‘shock therapy’ approach to development.

  • J_ag

    “Each citizen contributes to the revenues of the State a portion of his property in order that his tenure of the rest may be secure.” Montesquieu

    This would presuppose the existence of a state.

  • J_ag

    Feudal institutions are based on relationships while professional technocrats being chosen based on meritocracy presupposes a professional mandarin class. This does not exist in the Philippine context.

    “UPDATE: Mohammed El-Erian of Pimco has written about the IMF issue. Describing the previous process as “feudal” he adds that”

    “the post of Managing Director should be open to all nationalities, with candidates assessed on the basis of transparent job qualifications. It should also involve an internationally balanced committee to evaluate applicants and put forward 2-3 finalists for Executive Board consideration, and the final choice should emerge from a fair vote of the Board.”

    “Exactly.”

    In the Philippines well connected families are not bound by the rules that bind ordinary people. That is what feudalism is all about.

    Which comes first quantitative or qualitative change. Quantitative change comes first.

  • Bert

    “Lord Clive, the baron who helped establish colonial rule over India and ran the East India Company, the world’s first multinational company put it succinctly, that it was “absurd to give men power, and to require them to live in penury.”-Doy

    “So in answer to those that keep spouting words like “good governance” and “rule of law” on the one hand without factoring in the cost and accepting the need for higher taxes on the other, I say “hogwash: either put up, or shut up.” Institutions aren’t built simply out of an altruistic sense or moral revival. They are built with common sense pragmatism. The kind exhibited by Lord Clive all those years ago.”-Doy again

    I say, hogwash!

    The operative term is Lord Clive’s, “..absurd to give men power, and to require them to live in penury.”

    Philippine presidents, I believe, have taken that statement of Lord Clive to heart. Such that they have impoverished the country and made themselves as rich as multinationals, or richer.

    Now I can understand better Doy’s obssession with new taxes but not his displeasure with Noynoy’s good governance.

    • Not rich, my friend, but to just have a decent life. For example, to compensate public officials for the risk they put their lives in, as well as their families, reputation, livelihood, when they make difficult decisions that disappoint powerful interest blocs.

      It is not Lord Clive that Philippine officials have taken to heart. It is the rulers of the Hispanic colonies who told their king, “I comply, but do not obey,” in refusing to remit taxes and pocketing them instead, when Spain was going bankrupt and losing its ascendancy to Britain. They are the progenitors of our leaders today.

  • manuelbuencamino

    Doy,

    Good governance and the rule of law is common sense pragmatism.

    What is benign vs. malignant corruption? This sounds like you are advocating Neri’s moderate the greed philosphy.

    Please cite examples of benign corruption.

    • extreme example, you want? pocket a peso for every P100,000.

      • or even more benign, pocket a peso for every P1M. now this is getting funny.

        • oh, have a project as big as BNPP. for instance At $12B @ P45 a dollar. Incredible! At one peso for every P1M, you get P540,000.00! And I am being extremely benign!

        • UP nn grad

          Ang Pinoy sa Pilipinas ay nahihilo at malaking nagpaloko kung naniniwala na mapapalis ni Presi-Noynoy lahatng corruption. Mukhang maraming Pinoy sa Pilipinas nagpaloko nuong sinabi ni candidate Noynoy na maisasara niya ang lahat ng leakages.

          Ang admission ni Persi-Noynoy, hindi niila maisara ang mga leakages kaya ang sulosyon niya ngayon???? Ayan — isinara ang release ng pondo.

    • GabbyD

      yeah, this is a good question.

      on the one hand, there is a matter of taste. one persons benign is another’s malignant.

      take “living out” arrangement. some people thought its ok. some dont.

      what is the line where its ok, versus where its not?

      more important: who gets to say its ok? its not?

    • That kind of corruption precisely that Neri was confronting is the kind that is malignant.
      We have to prevent that kind. There are for instance specific government agencies that handle regulations involving big projects and big investments.
      The NAIA 3 for instance, North Rail. These agencies have to hire competent staff. The revenue agencies are another critical place where staff need to be competent and honest. You cannot expect the agents of these bureaus to live in penury when you give them power to decide on things involving powerful interests.
      It is a matter of using a well-targeted approach if you do not intend to raise taxes. Otherwise to raise salaries of all government officials would just be asking too much. I will have more on this shortly.

      • manuelbuencamino

        Doy,

        I was asking for examples of benign corruption.

      • Happy to oblige, MB.

        The classic example of benign corruption was found in Brazil back when government was being overly constricting of business and imposing many restrictive regulations.
        Fortunately, the bureaucracy in general colluded with businesses to override such unnecessary imposts. Benign corruption in this sense aided economic growth and did not hinder it.

        • GabbyD

          it seems that “benign” corruption is definable only expost…

          its benign if its corruption that doesnt halt growth. malign otherwise.

          so, the SAME ACT, in different place, contexts, can be either benign or malign.

        • That’s right, GabbyD, which is why no one can prescribe a set of policies beforehand. Each country and each state is different. It takes judgement and continuous tweaking to arrive at the best set of policies.
          This gives rise to the question, who should do the tweaking? Whose judgement should be exercised? I will have more on this shortly.

          • GabbyD

            ha! if u have a good answer for that, i’d be impressed!

          • UP nn grad

            “Who should di the tweaking” is to go off into imagining the ideal. Good for a Master’s degree, even a PhD degree, and then there is Pilipinas. For Pilipinas ” who does the tweaking?” is more relevant. [My opinion….]

            The practical matter is that the tweaking gets done by 3 institutions for Pilipinas, namely Executive Branch, Legislative Branch and Makati Business Club. [Ang mga walang boses, walang boses… dala ng anod.]
            The courts become agents of one or the other (witness the use of TRO’s against CARP-ification of Hacienda Luisita); government troops/police used by Malacanang in aid of a faction of “Big Business” (think Torres); and Supreme Court interpreting big-issues like “NO, you can’t do MOA-AD” or baby-steps like “NO, you can’t do witch hunts” and “Danding’s Marcos loot is Danding’s!”.

            Given the many number of players, important for the walang-boses to at least know what has happened. Please, someone tell Presi-Noynoy the importance of Freedom of Information as a Law.

          • GabbyD

            “The practical matter is that the tweaking gets done by 3 institutions for Pilipinas, namely Executive Branch, Legislative Branch and Makati Business Club. ”

            first, NAME ONE example where it was tweaked by the MBC as you allege.

            second, who else would “tweak” other than the executive and legislative? natural, sila!

            seriously, you’ve been sounding increasingly shrill upn.

          • In East Asia, there is usually a technical unit with sufficient clout and access to the highest levels of government that drives reform. More on this shortly.

        • manuelbuencamino

          Doy,

          I am not familiar with your example. Is it similar to the benign corruption in Singapore, Hong Kong, Malaysia, Mexico, the US, UK etc.?

          When you say colluded with business, how much money was exchanged? Who were favored over whom? What was the criteria for collusion? Is crony capitalism benign corruption? Is cornering contracts for your political party or for those who share your vision benign corruption? How does benign corruption not tilt the playing field?

          I’m sorry Doy but when you say benign corruption you are going down a slippery slope. How benign is benign?

          In the US, Wall Street found many regulations very constricting and restrictive so they colluded with the politicians and regulators to override what they felt were unnecessary imposts. The rest is history.

          I can’t believe that you would advocate benign corruption as a policy. GMA’s corruption was benign compared to Mugabe of Zimbabwe or Cheney of the US and a whole host of world class crooks. Erap was benign compared to GMA.

          When does benign corruption end and malignant corruption begin?

        • The type of regulations being imposed by the government of Brazil at the time were trade restricting, growth constricting regulations.

          Colluding was probably the wrong choice of words. It was more petty corruption. Nothing grandiose about it.

          If you are so intolerant of all forms of corruption, then you should support a higher level of taxes.

          Corruption in developing nations has been seen as a way to augment the low incomes of public sector employees. A form of market mechanism. So if you don’t want that to be the case, then support the calls for tax reform.

          Otherwise as I say in the piece, it is just plain wishful thinking that you can achieve Norwegian levels of clean government by relying on saints and eunuchs to run our government making a pittance.

          • Bert

            Another amazing statement from my friend which never fails to make me smile.

            I say, give a million pesos personal profit to a devil president as had happened in our history and she/he will still steal 20 million pesos more of our tax money.

            Pure and simple fact.

            Between good governance and burdening the people with additional taxes I will choose good governance anytime.

            My friend’s choice is hogwash to me.

          • Bert

            Good and clean governance is a promise to the people made by the sitting president of this country. For anyone to deplore such good motive at this time too early in his administration is abhorrent to me. Sorry.

          • Bert

            I’m really sorry for that rant, but any suggestion to add another yoke on the neck of my poor countrymen in the form of new and additional taxes can really get my goat.

          • manuelbuencamino

            Doy,

            you are a policy guy who loves numbers, statistics, percentages and all that.

            So tell me, how much does benign corruption cost? What percent do you recommend that we give to our benign corrupt bureaucrats and politicians? At what percent does benign become malignant?

            Corruption my dear friend has always been seen as a way to augment incomes whether or not the crook comes from a developing country or a developed country.

            By the way, benign or malignant, they are crooks anyway, right?

            And you are advocating a policy of tolerating crooks.

            Is that what you call realistic and ballsy?

          • You have to weigh the costs of preventing corruption against its benefits, MB.

            You seem to be looking at the benefits side, but you cannot attain those benefits without the costs.

            If as you believe the benefits are worth the costs, then you ought to be willing to put up with the costs. That’s all I’m saying.

            If on the other hand, you are not willing to bear the costs, then you have to be selective and find the most damaging forms of corruption and eliminate them.

            Since you are not willing to make that distinction and seem to be after eliminating all forms of corruption, then by all means let’s raise additional taxes to pay for better governance.

          • manuelbuencamino

            Doy,

            Better governance will mean less waste. Less waste means less need for more taxes.

          • UP nn grad

            manuelB: Governance is like a Porsche. You have to put money in order to get performance from the Porsche. Presi-Noynoy can’t even afford a Porsche… like Pilipinas can’t afford an information-systems infrastructure and a well-paid civil service base where you get high performance from Pilipinas governance.

            What car can you afford, ManuB? You getting the full BTU/horsepower from the gasoline yout put into your car, or are you satisfied with corruption and pollution because Kapos ang Pera????

            Ganuon lang iyon.

  • GabbyD

    lets talk about when the right time is to fire someone.

    pnoy has always says, we need due process. do you agree?

    if yes, you need to agree what due process is.
    1) if a finding by the DOJ due process?
    2) if a filing of a court case due process?
    3) or do you have 2 be guilty? or close to being called guilty by some kind of court where u can defend urself?

    perhaps you dont believe due process is the relevant gauge? monsod in her column said that the LTO chief was being insubordinate to the DOTC chief.

    question abound! is lto chief torres a ceso? if so she enjoys security of tenure. if not, then we need to know that. why is de jesus silent about it, if it is true?

    • UP nn grad

      Actually, a strong leader has to be swift and decisive, even emotional and vindictive if this is where the leader gets his energy. So Noynoy doing witchhunt with EO-1 was good for Pilipinas (but not in the manner Noynoy expected. EO-1 witchhunt revealed Noynoy vindictiveness / Supreme court decision says constitution does not allow the government institutions to do witchhunts. The gain for Noynoy is this — the EO-1 supreme court decision protects the sitting president. Like PresiNoynoy can make a swift decision to NOT ALLOW FerDieMarcos burial in Libingan Bayani, being assured that BongBong Marcos can not do an EO-1 against him when BongBong wins).

      PresiNoynoy should be swift in firing BFF’s who get tainted. Due process means that Presi-Noynoy allows the fired BFF to file grievance in the proper institution (courts, civil service, ???) and if the firing is denied, then Malacanang takes the appropriate action.

      • GabbyD

        so you want to fire someone, and then re-hire that person after due process?

        it would be so easy to get rid of people for no good reason. just taint them.

        • UP nn grad

          The huge problem which Presi-Noynoy doesn’t even know that he is doing is this. Weather-weather lang. BFF’s trumps all and whatever else. Presi-Noynoy uses “… tainted, hence get rid of them” for his enemies and “… so what if tainted, let’s wait for due process” for his BFF’s.

          Is it really that easy to taint these government officials? You really think innuendoes and paid hacks trying to spread twitter blabber works? If that were true, then —Trillanes will still be in jail! — that red-Lamborghini dude would be in jail already. Imagine that not only the justice secretary but the persi-dente himself saying the guy is guilty, you thunk the guy would be serving jail time already, right?

          • GabbyD

            really? name one example where he did: “Presi-Noynoy uses “… tainted, hence get rid of them” for his enemies “

    • If we stick to the Western concept of “rule of law”, then due process means following the letter of the law. However, in this case, I am not sure whether we can afford to wait for the wheels of justice to turn.

      Rather than ask what constitutes due process, we need to ask what forms of irregularity are tolerable and which ones are not. In my opinion, if Monsod’s story checks out, the behavior of the ASec is totally unacceptable (whether she is legally exonerated or not). This is what I mean about a pragmatic use of common sense.

      If this is not checked, an adverse selection problem will emerge, which is, only the ones with a personal agenda will stay or accept a position in PNoy’s government. This kind of corrosive influence needs to be nipped in the bud before it ruins the reputation of this government.

      • GabbyD

        “if Monsod’s story checks out” — this is the whole point of due process… to see if the allegations are true.

        • If you read the story of Monsod and Doronila in today’s Inquirer, it seems that the DOJ or Sec De Lima recommended suspension. But the decision was elevated to PNoy who made her go on leave instead. That was what De Jesus reportedly could not stomach.
          So it seems the good honest secretaries in the Palace know of the problem, but political considerations weighed in.

          • UP nn grad

            Do you hear the decibel loudness of the silence of the amuyongs? Loud and very-loud, the cry for “.. resign ka na… kaunti namang delicadeza, Merci!!!”…. now do you hear the same cry for “.. resign ka na… konti namang delicadeza” when it comes to Torres tendering her resignation?

          • Kg

            The so called noisy minority.
            I think if the noise is consistent,unless there is no such group as the demoralized employess of LTO or something like that.(I saw from your (UPNN) link.(philstar)

          • KG

            There is a limit to the public’s patience. Bert says it is too early( to lose patience). I think PNOy must not snub public opinion.He already or his communication team already blamed the opinion writers for the dip in the ratings and I don’t think that was the way to go.

        • GabbyD

          first, what is the diff between suspension and leave? why does that diff matter?

          second: yes cusp, but that brings us back to what due process means.

          if someone investigates you, and finds that you are guilty, is that due process?

          when the doj investigates, is that all there is to it?

          i’ve always thought its more than that. theres got to be more to it than that.

          but u said above, we cannot “afford” it.

          fine. then you are basically saying, an investigation by the DOJ should be the final arbiter of whether one should fire someone.

          if so, the president doesnt have 2 weigh in? it can be automatic? is this your position?

          if so, then we ask: are the usecs, asecs and secs under the firing power of the DOJ sec, not the president?

          lets call a spade a spade — what you REALLY WANT is what UPn wants –> any taint is a fireable offense. magkatotohanan na tayo dito.

          • UP nn grad

            gabbyD: a taint is not a fireable offense. To make a taint a fireable offense is to pass new laws, and Persi-Noynoy’s enthusiasm about his campaign promise — Freedom-Information-Law — coupled with candidate Noynoy’s “..Pilipinas has enough laws already”, forget that road to good governance.

            What Presi-Noynoy can do is man up — he can / he should should exercise his prerogative to fire people — especially his BFF’s — to show that he holds his BFF’s to a much higher standard where “…daang matuwid” is imperative.

            If Persi-Noynoy can fire the deputy-Ombudsman this or that, then Persi-Noynoy can fire his BFF’s for bringing mayhem (Quirino grandstand) or stench (pictures at a raid) to “Good Governance/ Daang Matuwid”.

          • UP nn grad

            just my personal opinion, gabbyD… the loyal Yellow Army and those who are uma-asenso in the current dispensation can disagree with my personal opinion.

          • UP nn grad

            And apparently, Miss Torres is a political appointee and not a career civil service officer.

            http://www.philstar.com/Article.aspx?articleId=650508&publicationSubCategoryId=

          • UP nn grad

            BFF trumps CESO.

        • GabbyD, I can sense the lack of clarity is creating a lot of grief. So we should go through the options one by one.
          Option One: to suspend someone pending investigation.
          Two: to re-assign that person to a less sensitive position.
          Three: to ask the person to go on leave, but basically keep her in the same post when she returns.

          I think option 3 was what PNoy went for according to the story. That is the option I felt we could not afford, because keeping that person in the same place means that DOTC Sec could not get on with his job and unsettles the DOJ Sec as well.

          Option 2 for me would have been the more middling way of dealing with the issue. PNoy could have opted not to follow DOJ Sec Lima’s recommendation for suspension, BUT at the same time allowed investigations to continue while assigning Torres to a less sensitive role. That is possible among CESO people.

          Option 1 in my view is still a live one because given due process, the person suspended still has the presumption of innocence until proven guilty.

          Does that help?

        • GabbyD

          cusp,

          so, the diff is her leave (actually its a suspension), has a limited duration.

          lets see if she actually returns. there is nothing that says must return.

          … and yes, your explanation helped.

        • GabbyD

          ok. lets say that the person who has been accused has been suspended indefinitely pending some result in the process.

          if the person is found guilty, then the rest is easy.

          but if this person is exonerated, will he be reinstalled? how will this person get another job? or wait?

          • Kg

            usually cases in Sandigan bayan is snail paced ang decision ilan presidente na ang nakaupo saka darating. kaya sa tingin ko innocent till proven otherwise ang dapat. That is just me.
            UPn raised a valid issue called BFFism. trust must be present in any friendship ,betray that trust saulian na ng kandila wika nga.

          • GabbyD

            yup KG. kung mabagal, what is the best solution?

          • KG

            kung mabagal nga ang takbo ng hustisya parang walang kwenta kung palaging gagamitin innocent till proven guilty trump card.
            Kaya nga I think sa case ni Torres kung saihin nyang I serve at the pleasure of the president which i think ilan news reports na ang nag quote sa kanya nito, the only way is not to let BFFIsm trump anything. the president has to act ayaw umalis sa pwesto eh di naman daw sya pinapaalis ng nag appoint sa kanya.
            The so called demoralized officers of LTO already wrote the Civil service commissioner, wala pa din.Its the presidents move.

          • KG

            The Inquirer calls BFFISM : Kaibigan Incorporated.BFFIsm na lang; mas maikli.

          • KG

            Speaking of the Inquirer.
            The Bizz Buzz portion is claiming that the president blocked the probe or investigation of Torres according to “their palace insider”.
            Akala ko kaya pinag leave para ma investigate.
            In addition,It seems that DOJ opinion is not worth anything after all.

          • UP nn grad

            The answer seems to be in that particular thing that Pinoys-in-Pinas are very proud of — delicadeza.

            Delicadeza always saves the day and folks resign immediately. Case-in-point — Merci. She has to be emulated by Torres, one would think, and Persi-Noynoy should explain to Torres the good example set by Merci.

            To the question “.. saan naman kukuha ng suweldo?” iyong nag-resign, that really is a non-issue if Torres is as good a professional as she should have been. In other words, somewhere in the Danding organization would be a desk for her, one would think.

  • UP nn grad

    BFF-ism is an institution for Presi-Noynoy Malacanang, , hindi ba And that for Presi-Noynoy, the traditional school is best where loyalty and BFF’ism to trump professionalism, anytime. This seems to be the theme of the BusinessWorldOnline article about BFF shooting-buddy Torres.

    • Interesting, an overlooked point. In a country like PH where business is lubricated through personal relationships, hiring a BFF allows the principal to economize on screening and monitoring costs, because there is that shared history and personal understanding.

      Unfortunately, time and time again, the savings made in hiring BFFs/cronies/kamaganaks/kumpadres is swamped by agency costs as these agents see it as their right to run amok in the turf assigned to them by their principal. Just like a conquistador of old.

      Compounding the problem are the emotional ties that bind creating a ‘cognitive bias’ that can cloud the principal’s judgement. Having endowed their BFF’s with a ‘halo’, it becomes difficult for them to make rational decisions regarding their fate when mischief is discovered.

  • GabbyD

    can we clarify what your problem is exactly: “The current thrust of the Aquino government is to bring about Western styled institutions ‘on the cheap’ by not looking at new revenues to boost its capacity to operationalize them.”

    is your problem:

    1) the govt did not spend what it was supposed to spend

    OR

    2) the govt planned spending is not enough

    • GabbyD, it would be good if we could just get back to the tax levels of the mid- to late-90s of between 18-19% of GDP. From this not too distant historical anecdote, we can conclude that there is enough room in our economy to yield such a tax take.

      It was the result, after all, of Cory’s 1986 tax reform program. I do not remember the roof caving in under that tax regime. Why is her son so timid in seeking to restore that kind of balance? At present levels, revenues are just too anemic.

      Pushing for good governance and economic growth may not be mutually exclusive, but doing them both while keeping the budget deficit within reasonable bounds is.