collective action

The Post-PNoy era

A Broad Tent
A big tent?
The Million People March at Ayala called for unity in diversity, but did it achieve this goal?

The election of a genuinely pro-reform candidate like President Aquino or PNoy in 2010 happens only once in a generation. Dissatisfied with anything that falls short of their ideal, some are now calling for an end to his presidency, but others are more conscious of the fact that time is running out to enact bold reform before he steps down.

Mortality has a funny way of focusing the mind. Whether it be the end of one’s life or term of office, contemplating one’s demise allows us to transcend the present day-to-day battles, take stock of the remaining time we have left, and attend to doing the things that we want to be remembered for after we are gone.

So it goes for the budding reform movement that first catapulted President Aquino into the presidency and has now morphed into a cause to abolish the pork barrel system. The fast-approaching conclusion of PNoy’s presidency, less than three years away, and the uncertain fate of his reform program, has put into sharp focus the need to double up efforts and ensure that enough protections are in place to keep whoever succeeds him on the straight and narrow path.

Recent revelations of anomalies in the administration’s Disbursement Acceleration Program (DAP) have reminded citizens of the possibility for abuse that still exists when you combine congressional earmarks with executive privilege in the budget process. The supposed unconstitutionality of such a program has wedged supporters of the cause on the issue of whether to turn on President Aquino who takes full responsibility for authorising the DAP.

While it was easier to make that leap under the presidency of Gloria Arroyo, especially after the Hello Garci incident, when the reform movement abandoned her, the personification of evil has not yet reached the same fever pitch under President Aquino. Internecine conflict has broken out in the wake of the [email protected] rally on 4 October which attracted far fewer numbers than the August 26 Luneta rally. The warring factions are making two competing claims:

  • One side claims that the protest action was “hijacked” by anti-PNoy groups, incited by the opposition, whose senators are being investigated for fraud in relation to the original pork barrel scam. They view calls for the president to resign or be impeached as a distraction to the ongoing investigation into congressional abuse of pork.
  • The other side maintains that PNoy’s supporters are seeking to weaken or undermine their cause to protect the president from prosecution.

It is a classic case of purists vs pragmatists. The purist/idealist camp (anti-PNoy supporters) seeks nothing short of absolute adherence to its core principles of prosecuting all those involved in pork (which includes DAP), while the pragmatists/realist camp (pro-PNoy supporters) see that such adherence, although desirable is not practical, and possibly counter-productive, at this stage.

The debate has quickly descended into an uncivilised tone with pejorative name-calling serving only to weaken the overall reputation and efficacy of the movement. A silent majority consisting of pro-reform supporters are perhaps willing to suspend judgement and cut the president some slack. They probably shied away from Friday’s mass action for fear of being lumped together with anti-PNoy protesters.

This split in the reform movement was something that the [email protected] organisers, the Scrap Pork network had hoped to avoid with their pronouncements on unity prior to the rally. Now that the two camps are in open conflict with each other does not bode well for the movement. That is of course unless it is able to quickly pivot towards forming an agenda for change that goes beyond mere slogans.

The reform constituency needs to be broad enough to encompass both pro- and anti-PNoy supporters. This can be achieved by focusing on policy goals rather than personality-centred partisanship. Just as the RH campaign brought disparate groups together around a common policy theme, the reform movement needs to coalesce around a set of policies to push for as PNoy’s presidency comes to a close, and beyond.

How can we do that?

The problem faced by ordinary citizens who compete with very powerful vested interests in waging a campaign to affect public policy was first posed by Mancur Olson in The Logic of Collective Action. The book in a way tries to answer the question why special interests are better able to capture state regulators and policymakers, as well as fund slick media campaigns to influence public opinion, than ordinary citizens who outnumber them.

The fact that the benefits of collective action are shared by the public at large, while the cost is borne by a select few, gives rise to the free rider problem where people wait for the first movers to bear the cost of organising before jumping in. Special interest groups don’t suffer from this, since the incidence of costs and benefits falls on a concentrated group of players. The logic of collective action eventually results in what economists call the tragedy of the commons where policies that serve the public interest are disproportionately underrepresented.

In the face of very powerful and concentrated interests which would want to stall and roll-back the reform process, how can the diffuse, inchoate masses that comprise the reform constituency mobilise support for a reform agenda? A new book Strength in Numbers by Gunnar Trumbull which challenges Olson’s thesis might hold a clue. The following is how Jonathan Rauch from the American Enterprise Institute summarised the key insights from the book

In fact, weak, diffuse groups have a paradoxical political advantage: precisely because they are weak and diffuse, the public sees them as less self-interested and thus comparatively trustworthy. Second, Olson also underestimates the power of ideological motivation, rather than just money and concentration, to spur activism. Third, “diffuse interests can be represented without mobilization,” thanks to activism by politicians and government officials who take up their cause. (FDR started a federal pension program at a time when “retirees,” as a self-identified social class, did not yet exist. The program created the constituency, rather than the other way around.) Fourth, weak or diffuse interests can link up with concentrated groups to amplify their effectiveness, as when consumers align with exporters to oppose trade protections or when free-speech advocates join with political parties to oppose campaign-finance limits.

A number of past cases in the Philippines would in fact fit well with the Strength in Numbers hypothesis. Legislation supporting clean air, cheap medicine and reproductive health were passed in the face of stiff opposition from very powerful business and special interest groups in society. Why? Because they had a combination of factors working in their favour: a champion in Congress, a constituency rallying behind it, motivated at times by an ideology or simply altruistic motives.

David Bollier, co-editor of the book The Wealth of the Commons, suggests that the internet has significantly reduced the costs of organising common people behind collective action. The following is how Bollier put it

In our times … (t)he rise of the World Wide Web since 1994 — and since then social networking, wikis, and countless other innovations — has made it ridiculously easy for people to find each other and organize to publicly advance their shared interests. That’s one reason that the commons is so robust today – the coordination and communication barriers among people have virtually disappeared in online spaces.

The strength of the MPM/Scrap Pork network is the fact that it is seen as a neutral group, less interested in the personalities of partisan politics. Its ability to organise mass actions through social media in the middle of a work day is gold. All this infighting simply undermines that and makes it appear that there are hidden operators with their own agenda trying to sway the cause one way or another. The fact that the network has hewn strictly towards the middle between pro- and anti-PNoy activists, in their pronouncements at least, was a good outcome.

To spur this movement forward requires us to harness all the energy and ideas of its constituents towards a reform agenda. To simply chant slogans is not enough. What we need are practical policy tools that would make the scrapping of pork, the accounting of public funds, and the prosecution of the corrupt a lot easier regardless of who sits in Malacañang or the Batasan.

We can either swim against the tide or make the tide shift in our favour through structural reforms. It is not a distraction to focus the conversation on policy reforms that could be adopted over the coming years, when all these investigations and prosecutions of pork cases will unfold. As the cases of alleged corruption are investigated and cases filed, there will be cause to mount protest actions to carry them to their logical conclusions.

The problem is if we think that removing pork from the diet of congress and the president, and punishing a number of senior elected and appointed officials will solve the problem of corruption in high places, we would be seriously mistaken. A lot of off-budget transactions have taken place in the past, and they will continue to do so in the future. Wily and entrepreneurial backroom operators such as Janet Napoles will always find a way of conducting shady deals when the public are looking away.

The incentive to cheat under our current system is simply too great because whoever is in power has the ability to maneuver using off-budget transactions. It is time that groups like MPM and Scrap Pork take their advocacy to a whole new level by taking advantage of the free space afforded by the digital commons to make their case for far-sighted reforms to address them. This might involve:

  • sponsoring and curating a combination of online forums where various experts put forth their ideas for policy change through discussion papers or presentations and where viewers participate by posting questions, comments and suggestions.
  • seeking champions for their cause in Congress or the administration to adopt their draft bills and proposals.
  • organising mass actions through social media during important dates when proposals are deliberated and voted on in Congress. The case of the Magna Carta of the Philippines for Internet Freedom could be used as a template to push for a number of reform measures.

Finally, if the reform constituency remains intact, and succeeds in pushing not only for administrative reforms through executive action, but political reforms through changes in law that would make it easier for reform-minded politicians to advance in our democratic system, then they will guarantee a better and brighter future for all of us as we move into the post-PNoy era.

Note: The hashtag #postPNoy has been started by the author on Twitter to foster a conversation on concrete reform proposals.  Anyone can participate in this discussion by following it and posting comments and suggestions.

Pork is the new GMA

The organizers of the Million People March know what they are doing.

They know that for their protest movement to attract the broadest base of support and have the greatest impact, it would have to limit its concerns to as few as possible. This basic insight into the inner workings of interest groups was first highlighted in the Logic of Collective Action, a book by Mancur Olson. Although his findings from the 1960s have recently been weakened by more recent studies, the core of the thesis still holds.

Why do groups like the NRA (National Rifle Association) and the Tea Party movement in the US wield so much power and influence over governments in driving policy debates? It is all due to the specific nature of the issues they have in mind. For the NRA it is the freedom to own guns, for the tea party it is to lower government debt and deficit. The greater the level of specificity, the greater the potency.

Having too long a laundry list of demands and positions would simply cause their adherents to splinter and their message to get diluted or hijacked. This is perhaps what happened to the Occupy movement. While it raged on for a while, the inchoate nature of the protest action and the wide disparity of calls among its adherents eventually caused its energy to dissipate.

That is clearly something that the MPM wants to avoid.For this reason their emphasis on unity and limiting the number of demands to just three–to abolish pork, account for pork, and prosecute pork abusers–is important. That’s it. Just scrap pork. Anything else beyond that is a distraction, as far as they are concerned.

It is not that they don’t see other policy prescriptions as valid. Their statement acknowledges the need for a broader conversation later down the track to determine what would replace pork, but for the time being, people’s attention and energy have to be focused on the single task at hand, which is to rid the national government’s budget of different forms of lump sum, discretionary spending, which is how they have defined pork.

But even with the three points that they have outlined, there apparently was still room for confusion. Shortly after releasing their unity statement, the MPM organisers had to issue a clarification that they were not supporting calls for the president to resign or be impeached over the release of the DAP (Disbursement Acceleration Program), a stimulus package initiated in late-2011, which the Palace had put together from its underspent budgetary allotments earlier in the year.

Because legal and fiscal luminaries had claimed that the DAP had violated provisions of the constitution over how savings could be re-aligned and spent, and because some of it had been channeled to legislators as Priority Development Assistance Funds (aka pork), many had construed the MPM’s earlier remarks as potentially supporting calls for impeaching the president. To prevent its message from being hijacked, the Scrap Pork network had to make it clear that they were not going to use their rally in Makati as a staging ground for ousting Mr Aquino.

The president for his part has tried to lay the blame back on Mrs Arroyo claiming she had raided the Malampaya Fund to the tune of close to one trillion pesos and had directed some of that amount to Ms Janet Napoles, who is now facing charges of plunder for her role in the whole conspiracy. This staggering amount that was allegedly misappropriated, only serves to remind protesters of the potential for fraud and plunder in the future.

This is why the MPM and Scrap Pork Network cannot fathom why the Palace insists on the appropriateness of the DAP and of maintaining budget rules around off-budget funds like that of Malampaya. While the president keeps acting like it is 2005 when the anti-Gloria movement raged, he has to recognise the fact that pork is the new GMA, and that people have moved on and are tired of him blaming her all the time.

If he does not do so, then he risks alienating protesters and losing legitimacy and public trust in his administration. He will be increasingly seen as part of the problem rather than part of the solution. At the moment, the MPM and Scrap Pork network haven’t turned on him, but they could easily do so, especially if new revelations emerge of other questionable dealings. Already, his aunt, Tingting Cojuangco has alleged poll fraud in 2013 that involved military and palace officials with his tacit approval.

Though President Aquino may be trying to draw lines of distinction between him and his predecessor, such allegations are slowly blurring those lines. Though they may later be proven to be unfounded, allegations of fraud have a way of unsettling voters and investors. Just as the country has gained the trifecta of investment status upgrades from the three major credit rating agencies, and when the need to drive deeper reforms is becoming urgent in the final years of his presidency, Malacañang cannot afford to have such destabilising forces at play.

The Binary World of James Robinson: a rebuttal to Why Nations Fail

He came at the invitation of the Angara Centre for Law and Economics to present his ideas from the book Why Nations Fail which he co-authored with Daron Acemoglu. This pair along with Simon Johnson had originally published back in 2001 an article in the American Economic Review entitled The Colonial Origins of Comparative Development: An Empirical Investigation.

Their book could be seen as an essay expounding on the themes uncovered by their earlier research which credits economic development to the institution-building conducted during the colonial era between the fifteenth and nineteenth centuries. It begins by drawing our attention to the differences between Nogales, Arizona and Nogales, Sonora, towns on opposite sides of the US-Mexican border.

The basic thesis of the book is that nations with institutions that promote greater inclusion in both political and economic spheres prosper while those that foster extractive or predatory policies wind up becoming impoverished and backward. The seminal moment in history, according to the book, happened in England back in 1688 during the Glorious Revolution.

For those not familiar with this event, I provide a brief background here. The basic argument goes a little like this: security of ownership and property rights is essential to investor certainty; investor certainty is needed to foster capital markets, and a set of political checks and balances that guarantee this is best suited for capitalism to flourish.

These principles were essentially what The Glorious Revolution was supposedly fought on and why the Industrial Revolution subsequently took place first in Britain, rather than in Continental Europe. The rights and ideals that Englishmen fought for were transplanted to their American colonies and became the basis for the American declaration of Independence in 1776.

Acemoglu, Johnson and Robinson (AJR) sought to prove empirically that institutions mattered to development. Previously, it was argued that climate and geography had a lot to do with it, i.e. that the industrious, temperate, northern states of Europe were more prosperous than the sluggish states in the southern Mediterranean and the tropics.

AJR sought to dispel this using colonial history. Why was it that not all colonised countries developed along the path of the United States? The difference lay in institutions. Their article demonstrated that in places where diseases led to high mortality rates among early European settlers, and where consequently hardly any permanent settlements were planted, centuries later, the lack of institutional legacy was found to be significantly correlated with low development.

The main lesson was that geography was not destiny, and that even history was not destiny. Less developed nations could begin adopting the institutions that promoted greater inclusiveness and discard extractive policies that left them in squalor. This dove-tailed with the agenda promoted by Washington on good governance, as it searched for a way to rescue the failed Washington Consensus from repudiation.

What came about was the augmented consensus that said free markets and good governance promote economic growth and development. After decades of telling less developed countries to shrink the role and capacity of the state and let markets rip, they were now saying that government needed to be strengthened once again.

The liberal democratic states of the West act as an ideal to which other societies need to aspire to. No other path leads to sustainable economic growth other than this. Just as Calvinist preachers of old would proclaim that no one cometh to the Father, but by His Son, these economists present a case that no other path leads to economic Nirvana, but through the Market (with Institutions performing the role of the Holy Ghost).

This rather binary view of the world is actually contradicted if you go deeper into the colonial history of the Americas which is what John H. Elliott did in Empires of the Atlantic World: Britain and Spain in America 1492 to 1830.

Here he wrote that it was actually the exclusionary racial policies fostered by the English settlers that led to greater social cohesion among settlers around Enlightenment principles of individual rights and liberties, which in turn led to greater independence and prosperity.

Meanwhile in the Southern hemisphere, the Spanish settlers had an “organic conception of a divinely ordained society dedicated to the achievement of the common good” which was “more inclusive rather than exclusive in approach”. The granting of rights both economic and political to natives consisting of mestizos, creoles and freed slaves led to a mixed-race society prone to greater divisions than existed in the North.

The irony here is that a more inclusive colonial policy led to greater exclusivity as subsequent societies were stratified and organised into “pigmentocracies” which made it harder to achieve the egalitarian principles espoused by the Enlightenment. In the Philippines, the outpost of New Spain, the situation was worse in that apart from developing this multi-racial caste-like system, the facility of a common language was not provided as it was in the Americas.

This is the difficulty of using colonial history to prove or disprove that institutions matter in the way attempted by the authors of Why Nations Fail. They do matter, but in different ways, which is the point I highlighted previously in this column (see here).

Secondly, there is the anomaly of the benign dictators of East Asia and the desarollista states of Latin America. Robinson has taken the view that the East Asian growth formula, what is termed the BeST Consensus (BeST consisting of Beijing, Seoul and Tokyo), represent a unique moment in history that cannot really be duplicated or sustained.

Peter Evans disputes this saying that just because the East Asian miracle emerged from a unique blend created by the Cold War policy of the United States, it does not mean that we cannot distil a few basic principles and emulate them today. Just because these states were predominantly autocratic does not mean that weak democratic states cannot adopt the policies that made them succeed in fostering rapid industrialisation (see here for a deeper discussion).

What’s more is that both Germany and the United States, late industrialising Western nations after Britain and France, followed the same industrial policies a century earlier. It was just that after scaling the development wall, they felt the need to “kick the ladder” away to prevent others from following them up because not doing so would disadvantage them.

In Latin America, the record of developmental or desarrollista states of the 1970s and 1980s in Brazil and Mexico is more spotty than in Chile but nonetheless more successful than in Africa or South Asia as these countries made their way into middle income status ahead of countries like Malaysia, Indonesia and Thailand. This is the evidence that Robinson conveniently sidesteps.

Another point James Robinson makes in the book and in interviews is that collective action, which he equates to people power, is key to expanding opportunity for people if the system is closed. He cites the experience of the Philippines and of the Middle East a la Arab Spring to underscore his point. Again, the use of people power is problematic. Why?

Well as Elliott points out, people power features in Spanish colonial traditions as well because

(b)y the laws of medieval Castile the community could, in certain circumstances, take collective action against a ‘tyrannical’ monarch or minister.

Cortes in fact used this against governor Velasquez who ordered him to survey and not to invade the territory of Montezuma in the Yucatan peninsula. It was based on the notion of a social contract between the prince and his subjects which if broken gave the right of the governed to say, “I obey, but I do not comply” (se obedece pero no se cumple).

From time to time, commoners or comuneros resorted to acts of dissent bordering on revolution. But these were simply seen as a way to get the authorities to the bargaining table. Once their grievances were heard and the tyrannical laws or ministers were replaced, they would go back to living as loyal subjects of the monarch. Direct democracy rather than representative democracy ruled until very late in the piece, which left them with very little in terms of a genuine parliamentary tradition.

This swinging of the pendulum from uprising to dictatorship and then back again is exactly what we are witnessing in Egypt today. The problem with equating collective action, i.e. people power, with greater openness, is that the relationship does not always hold.

Finally, let me address the fallacy that only the Anglo-American form of capitalism works well. Francis Fukuyama is right to point out that this is not the only successful Western model that exists. Scandinavia demonstrated another path, which did not require revolts against oppressive monarchs. Theirs was more along the lines of an enlightened, benevolent monarch based on egalitarian religious rather than secular beliefs.

What I hope to point out through this discussion is that the world that we live in is more complex, more multifaceted than what Robinson tries to portray. While it is easy for him to be parachuted into the Philippines to spread his brand of institutional economics, we don’t necessarily have to buy into his whole message.

I agree that the Philippines needs greater openness and participation in political and the economic life, and that collective action to widen the sphere of participation probably needs to be organised, because elites won’t surrender their privileges willingly, but that is as far as I would go.

We don’t need a whole theory based on a faulty or perhaps selective reading of history to back this up. We have seen how people power can be hijacked or used for narrow political ends. We need to guard ourselves against simplistic arguments that say unseating this corrupt ruler here or that autocrat there is going to bring about nirvana for us. Institution-building is not accomplished by this alone, but through a sustained, deliberate, evolutionary process.

The social innovation of Oportunidades and Bolsa Familia more widely known as conditional cash transfers which have been credited with reducing poverty in Mexico and Brazil were not developed by the World Bank or the IMF.

They were experiments conceived by indigenous policy makers who were thinking ‘outside the box’. The East Asian industrial policies responsible for creating economic prosperity and convergence were pursued against the advice of international economists from the IMF and the West. Japan’s Ministry of International Trade and Industry sought to deceive their Western minders that they were complying when in fact they were doing their own thing.

Similarly if the Philippines were to find its way in the world, it will have to be by taking into account its own unique blend of ideas, capacities and institutions. It won’t be by applying some universal one size fits all formula promoted by a Western economist armed with some statistical regressions, a few case studies and a loose reading of history.

Since the era of Martial Law we have had technocrats sing from the same hymn sheet as their Western counterparts while ironically supporting a system that undermined the very principles they were espousing. We need to be smarter and wiser this time around.

We need to accept that the world is not a binary system, comprised of dummy variables that say you are either inclusive or exclusive, free or unfree, open or closed. We need to admit that we live in a multi-polar world, where things are not as clear cut, as some experts would have us believe, and that many paths lead to development. Ours in fact still needs to be found.