Cacique Democracy

Outliers

Outliers

Why do we keep criticising our politicos for “failures” but avoid reforming the system that produces them?

We Filipinos love to complain about our politicians. We expect them to achieve herculean tasks and solve wicked problems, and to do so honestly while being paid a pittance. We complain when politicians don’t show compassion or make their presence felt. And yet when they do, we accuse them of engaging in opportunistic premature electioneering (epal, being the derogative term in the vernacular used to describe it).

On the other hand, we Filipinos are also a very patient lot, willing to tolerate the inadequate levels of service from our government, willing to accept the way the system fails to provide for our needs, and willing to tolerate the corruption that goes on with our tacit approval. We love to complain about these problems, but then are often unwilling to consider systemic ways to improve the situation.

One reason for this is that we can sometimes point to exemplary politicians who are honest, decent, hard working and conscientious. Many Filipinos feel that these exemplary individuals demonstrate that it is possible for the system to work, if only the right people are elected or appointed. What they fail to consider is that among the elite, these individuals are outliers. They don’t represent the average politician or the political class from which they spring.

The Philippine condition can be summarised in a few sentences. When America annexed the Philippines from Spain, it introduced representative government without building up a competent, well-functioning bureaucracy, something which the latter had failed to do in over three hundred years. The civil administration that was eventually set-up was populated not on the basis of merit, but with appointees of local bosses who were now occupying national posts. The political elite took advantage of an ill-equipped bureaucracy to extract rents from public institutions, contracts and projects. These rents enabled them to retain power.

The average politician therefore seeks to maximise rents in between elections either legitimately or illegitimately because that is how they are able to compete in the political arena. Very few elected officials ever attract media attention for their work. By and large, the media darlings (or media whores depending on how you view them) who campaign based on their popularity or celebrity are the exception rather than the rule. Your garden variety politician has to rely on other means to gain the support of constituents. This is done by catering to the particularistic needs of clients through patronage.

Clientelism is embedded in our political structure through patron-client networks that emanate from the executive and work their way through senators, congressmen, local government units, down to the baranggay level. Political agents who are unable to dispense patronage are seen as weak and ineffective, while those that bring tangible, concrete projects are well-regarded for their ability to bend the national government’s will to suit their interests.

These networks do not come without inherent costs. To grease the wheels of the system, a lot of deals with corresponding payoffs have to occur, not least of which goes to the political patrons themselves. All this involves high political and economic stakes. It is a high risk, high reward venture that involves a lot of largesse being poured on and spread around to ensure mutual self-destruction, if the whole set-up is exposed.

The priority development assistance fund (PDAF) scam is just the latest in a long string uncovered by whistleblowers. Each time this occurs, the noisy middle class screams for their pound of flesh to be extracted from operators behind the scene. The focus is on getting prominent figures hauled into jail. Certain groups have also sought to ban PDAF or political pork barrel, which in the context of the debate has been framed as lump sums allocated to members of congress or the president, which give these individuals the discretionary decision-making rights to identify projects and implementing agencies or recipient NGOs.

The recent ruling of the Supreme Court has laid down the law in terms of the separation of powers between the executive and legislative branches. Legislators are not meant to have a hand in implementing any item of the budget, save for conducting congressional oversight in the way it is spent. If members of congress wish to fund projects in the future within their districts, they will have to propose and have them approved through the budget process. This is the way congressional earmarks operate in the United States and other advanced economies.

Many commentators have said that this spells the end of congressional pork. A caveat has to be attached to that. It is the end of Congress’ pork as we know it. In the future, the art of political dealing will have to occur prior to budget approval, not after. There will still be pork. This is because the same incentive structure is still in place. The same imperative to cater to clientelistic needs and the same problem of political campaign fundraising remains.

Campaign finance regulation is lax. There are no limits on the amount of political donations a candidate can receive from individuals or corporations permitted to give under the election code. The only statutory obligation candidates have is to report these contributions and to limit campaign spending and political advertising. Implementation by the Comelec of these regulations is weak given the meagre resources they have at their disposal. As a result compliance is spotty and slow at best.

Due to the weakness of the system and a lack of state contribution to campaign expenditures, political parties are paper entities. The average candidate for political office does not pass through a merit-based system of primaries or pre-selections at the local level. Candidates are not drafted by their parties, they are its patrons. As a result the pool from which political leaders are drawn is highly constricted.

Once in a while, an outlier will come along and challenge conventions. But we have to remind ourselves, these are often the product of random chance, flukes of history. If we want our political system and culture to change, we will have to deal with the incentive problem and the candidate selection pool in a structured way.

I have written in the past what this would entail: campaign finance reform, empowering agencies to implement election regulations, higher pay for elected officials, state contributions to political parties with conditionalities relating to the process of candidate selection, i.e. having a cap on political dynasties. For these reforms to work, they have to be systematically adopted because they are mutually reinforcing.

Once upon a time, the nobility were singled out for political office because it was only they who could afford to serve the community without much compensation. The Philippines at its inception was a cacique democracy. With the high cost of vying for political power and the weak institutions of the state, even the landed aristocracy and their political heirs have succumbed to the temptations of competitive kleptocracy.

To reverse this dynamic, we would have to adapt our political institutions. Of course some might say that we are over-thinking the problem. Fickle minded voters simply want the current scandals to be dealt with by putting some prominent figures in jail and imposing a ban on pork. Once that occurs, people will turn their attention elsewhere having felt that the issue has been dealt with. The problem is we could simply be scratching the surface not knowing the full-extent of corruption.

Even with a handful of senators and over thirty congressmen both incumbent and past being identified as having something to answer for in relation to the PDAF scam, we are forgetting that the audit report on which this is based was not exhaustive. We really won’t have a comprehensive picture of how pervasive corruption is. The only surefire way to ensure that it does not happen again is to deal with the underlying issues that plague our system.

If we don’t then we will simply be narrowly focused on the outliers on the opposite extremes of the spectrum of political behaviour that attract our attention, without really improving the norms within the institutions which we rely on to govern our state and address the collective needs of our society. If we want a professional political class in our country, we need to get past observing these outliers and concentrate on improving the normal operator who moves in our political space.

Imagining True Independence

What would a truly independent Philippines look like?

In the week that the nation was celebrating the 113th anniversarry of its original declaration of independence from Spain, it was fending off rumors of impending incursions into its territory in the Spratlys by China. Having an up and coming naval power in the region press the boundaries of our sovereignty made us call upon our former Commonwealth partner in the US to come to our rescue with assurances of support.

To some, the fact that we had to seek foreign assistance to protect our domestic resources means that we are not truly free. This leads me to imagine what a truly independent Philippines would look like. I use the word ‘imagine’ in the Andersonian sense. Benedict Anderson, author of Imagined Communities would say that all post-colonial societies are mere fiction, inventions of their former colonial masters.

According to one definition of it, “independence is a condition of a nation, country, or state in which its residents and population, or some portion thereof, exercise self-government, and usually sovereignty, over its territory.” The concept of a sovereign state usually incorporates two things: an effective and independent government on the one hand and a defined territory on the other. Nations or states which are unable to fulfill these two requirements are generally recognized as failed states.

Based on these definitions, can the Philippines be seen as truly independent?

Aside from acquiring formal independence in the political sense, what other indicators would signal our independence in a de facto sense. It sounds like a sophomore’s essay writing assignment, but the president himself during his Independence Day addresses was ruminating out loud as to what this would mean for us today. He seemed to be offering up a few suggestions, to wit:

  • One was freedom from corruption. It was present and running rampant in 1898. In Cacique Democracy, Anderson described how the abuses of local bosses prevented the revolutionary taxes from reaching the central government of Aguinaldo. In 2010 a hundred and thirteen years later, one of the decendants of the original revolutionary leaders in the person of PNoy declared that the Philippines had become graft free. Strange imaginings, perhaps, but corruption does prevent the state from governing in the interests of its people.
  • Another ingredient for true independence dreamt up by PNoy was freedom from hunger and unemployment. In his speeches during the week, he spoke of the freedom from privation when he said that the problem facing his countrymen was what type of food to put on the table, rather than having something to eat or not. He also mentioned that overseas workers now had an option to come home to the Philippines because the booming call center industry permitted them to earn decent wages. Again, strange imaginings, it would seem, but deprivation of economic freedom does weaken a nation’s sovereignty.
  • Related to the second ingredient is energy independence or freedom from the high cost of foreign oil. During the week, PNoy announced the fifty percent renewable energy by 2030 target. Indeed the high cost of transportation and electricity along with food are the main causes of misery among much of the populace, which is probably the reason for his declining popularity. However, in the same week that he made this announcement, the palace also released a statement regarding the postponement if not outright cancellation of some port and rail projects just as the previous administration cancelled an airport contract for much the same reason.

Indeed each administration would like to draw a line in the sand to mark the end of the old era and the start of a new one. But what each administration finds out, whether it be the Aquino administration and the mothballing of Marcos’s nuclear plant, or Erap and Ramos’s indepenent power producers, or GMA and Ramos’s NAIA-3, or PNoy and GMA’s pet projects, cancellation of old contracts come at a price. This price is eventually borne by the taxpayers.

A fiscal strategy missing

The deeper question has to do with why the nation has to depend on overseas development assistance or ODA’s in the first place. These projects which often require us to purchase equipment from the donor country are little more than industrial policy disguised as foreign assistance. Indeed with the WTO restricting member countries from exercising independent industrial, trade or monetary policies, public sector procurement provides one of the remaining avenues for a nation to foster domestic import replacing industries.

The model I would put up is that of Marikina City under Bayani Fernando. The city’s engineering department under Mayor BF did not contract out its public works projects but produced everything in house, including its quaint looking portalets, traffic signs and street lights. While the city was not one of the richest, it raised revenues through property taxes which were justified by the city’s improvement of roadworks and schools. Fiscal independence was integral to its development.

Unfortunately, calls for a fiscal adjustment plan that would lead to greater fiscal independence seem to be falling on deaf ears as the administration continues to believe in its ability to attract private investors to supply public infrastructure. The idea is that a user pays principle trumps the socializing of public investment. The problem with that is that along with user pays, PPP’s also introduce the notion of a fair market return for the private investor.

It would be possible, under an alternative situation, for the government to fund the construction of public infrastructure projects and recover its investment by charging users without resorting to a private operator model. Under such a set-up, users would not have to pay as much, as the government would not require a fair market rate of return.

The social contract

The modern imagining of the concept of sovereignty comes from reflections on the relationship between individuals and their government. This led to an “intellectual device” known as the social contract. According to one definition, the “(s)ocial contract arguments assert that individuals unite into political societies by a process of mutual consent, agreeing to abide by common rules and accept corresponding duties to protect themselves and one another from violence and other kinds of harm.”

For the nation to maintain its territorial integrity, and protect its off-shore assets in the South China Sea from invasion, it will have to increase its military budget. Australia has already announced that it will increase its deployment of defence assets off its northern and western shores to secure its oil and gas reserves. The move comes while it also contemplates increased US military presence on its own bases. This is in anticipation of the rising influence of resource hungry China in the region.

For the government to provide security and basic social services to the people in a way that enables them to be productive citizens, it will have to become more efficient and competent in acquiting its resources. One of the things hindering the present government from doing what it intends appears to be its fear, some would say paranoia, that a lot of its spending goes to line the pockets of corrupt officials.

This distrust has created bottlenecks in the expenditure program which has hampered development spending of late. If as PNoy stated the Philippines has become graft free, it would be partly because his government in its first year has withheld spending from most of its line agencies with only the military and police agencies being spared.

Finally, and perhaps as a parting shot, let me say that if the nation is to be more mature, one would imagine there to be no need for petty partisan politics during national celebrations such as June the 12th. The use of folksy street parlance to settle personal political gripes denigrates the solemnity of the occasion. For me, the day when we as a people can mark such important dates in our history without our leaders resorting to snide remarks and bickering of this sort will be the day that our nation truly becomes free.

Clef two-factor authentication