Political-dynasties--business--and-poverty-in_2022_Journal-of-Government-and

Political Dynasties, Business, and Poverty in the Philippines

Article Overview

• Authors: Ronald U. Mendoza, Jurel K. Yap, Gabrielle Ann S. Mendoza, Leonardo Jaminola III, Erica Celine Yu

• Institution: School of Government, Ateneo de Manila University, Philippines

• Keywords: Political dynasties, Philippines, Business dynamism, Development, Poverty

Abstract Highlights

• Political dynasties are linked to poverty; however, the relationship varies by region in the Philippines.

• Empirical evidence shows that dynastic concentration impacts development differently in Luzon compared to non-Luzon.

• The interaction between local economic elites and political dynasties influences poverty levels.

Introduction

• Dynastic Behavior:

  • Dynastic politicians may act as "roving bandits"—extracting wealth with weak law enforcement.

  • They may also act as "stationary bandits"—investing in local development to gain popular support.

• Prevalence of Dynasties:

  • 80% of Congress and 50% of elected officials are from political families.

  • Strong link established between political dynasties and poverty in prior studies but lacking an explanation for regional variations.

Impact of Economic Elites

• Independent economic elites can counteract negative effects of political dynasties.

• Economic activity mitigates the degree of poverty linked to political concentration.

Study Framework

• Key Research Questions:

  1. How do interactions between politicians and businesses shape poverty?

  2. Does political and economic inequality contribute to underdevelopment?

• Methodology: Utilizes novel survey data and empirical models analyzing government-business relationships.

Literature Review

Political Dynasties and Development

• Evidence of governance issues in regions with political dynasties:

  • Reduced legislative productivity and local economic growth.

  • Dynastic dominance linked to higher misuse of funds and lower public goods provision.

Dependent and Independent Variables

• Political Dynamics:

  • Political concentration negatively impacts development, evident through case studies in Colombia.

  • Comparisons show economic elites in politics may lead to better economic outcomes.

• Governance and Economic Activity:

  • An active economic sector contributes positively to governance and development.

Methodology

Survey Design

• Target: 81 provinces in the Philippines

• Expert Interviews:

  • Engaged business leaders, civil society leaders, and academics to assess political-business linkages.

  • Used vignettes for contextual understanding.

Data and Analysis

• Panel dataset from 2006 to 2018 assessing poverty levels by political dynamics.

• Fixed and Hausman-Taylor models utilized to understand impacts of dynasties and business dynamics.

Key Findings

Luzon vs. Non-Luzon Comparison

• Luzon:

  • Political dynasties do not exacerbate poverty; business ownership relates positively to poverty.

  • Competitive environment allows politicians to foster growth and expand economic activity.

• Non-Luzon:

  • Political dynasties significantly exacerbate poverty due to extractive behaviors in resource-rich areas.

Summary of Results

• Presence of dynasties is strongly linked to poverty rates.

  • Higher dynastic influence correlates with ineffective local governance and economic stagnation in non-Luzon.

Conclusion

• The influence of political dynasties on poverty is highly context-dependent:

  • Varied effects based on region's economic activities and political structures.

  • Need for institutional reforms to promote accountability and reduce dynastic power.

• Future Directions: Further research essential to dissect the regional dynamics of dynastic interactions with business and governance.