Economic Policy for Sustainable Growth and Development vs. Greedy Growth and Preservationism

Sustainability science emerged from the felt need to employ appropriate science and technology in the pursuit of sustainable development. The existing sustainability science agenda emphasizes the importance of using a systems approach, stressing the many interactions between natural and human systems. Despite its inertia and avowed purpose of being practical and feasible, however, sustainability science has yet to embrace the policy sciences. In pursuit of this objective, we first trace the history of thought of sustainable development, including its definition and operationalization. Sustainable development encompasses sustainable growth and dynamically efficient development patterns. Two promising approaches to sustainable growth are contrasted. Negative sustainability counsels policy makers to offset any decrease in natural capital with at least the same value of net investment in produced capital. This sustainability criterion cannot determine how and how much to conserve natural capital nor how much to build up human and productive capital. Indeed, there is ambiguity regarding what prices to use in summing the values of diverse capital assets. To fill the void, we offer positive sustainability, which maximizes intertemporal welfare while incorporating system linkages, dynamic efficiency, and intertemporal equity. This provides a solid and operational framework for sustainable growth. In addition, sustainable development must include the lessons from development theory, including how optimal patterns of production, consumption, and trade change with standards of living. However, like Tolstoy’s unhappy families, there are many pathways to unsustainable development. We describe two broad causes of unsustainable growth – rent-seeking and preservationism. We also illustrate patterns of unsustainable development by drawing on lessons from the Philippines. While specialization is the engine of growth, fragmentation is the anchor. In addition to natural fragmentation from natural trade barriers in an island archipelago, policy and governance, driven by rentseeking, promote economic stagnation. Low economic growth in turn exacerbates population pressure and environmental degradation—the vicious circle of unsustainable development. We give particular attention to how a resource curse can exacerbate policy distortions and rent-seeking, and how the same phenomenon can be promulgated by foreign aid, foreign direct investments, remittances, and tourism. For sustainable development not to be at odds with policy science, positive sustainability must be combined with projects and policies that promote dynamic comparative advantage and poverty reduction. We emphasize the facilitative role of government especially in transforming the vicious circle into a virtuous circle.Sustainable development and patterns, positive sustainability, specialization, the Philippines

Resource management for Sustainable Development of Island Economies

What is the role of resource management in sustaining competitiveness for island economies such as the Republic of the Philippines and Hawaii? We review the history of thought on sustainable resource management and sustainable development and then turn to the threats to sustainability from the resource curse and the parallel curse of paradise. We show how the resource curse undermines the pursuit of sustainability and describe innovations in governance that can transform the curse into a blessing.Resource curse, sustainable development, Dutch disease

THE rice problem in the Philippines: trends, constraints, and policy imperatives

Every political dispensation in recent decades has taken the view that the country has to be able to feed itself. For the country’s political leaders and the agriculture bureaucracy, this has meant that rice, the country’s staple food, has to be locally produced at quantity sufficient to meet the rice requirement of the burgeoning population. Indeed, rice self-sufficiency has been an objective enshrined in all government programs for the agricultural sector since the early 1960s. To achieve the objective, the Government has intervened, albeit in varying degrees, in the marketplace to affect virtually all segments of the supply chain, including importation, and of the demand spectrum. Yet, self-sufficiency has remained elusive. The population is far from being more food-secure now than a decade or two ago. Over the years, rice has become more expensive in the Philippines than in most developing countries of Asia. This has caused reduction in the purchasing power of the incomes of the poor, including landless farmers and urban poor workers whose spending on rice constitutes about 22% of their total household expenditure. Arguably, this could partly explain for the much higher incidence of absolute poverty in the Philippines than in Indonesia, Thailand, and even Vietnam. What has gone wrong? In this paper, we examine the performance of the rice sector over the last three decades. Our aim is to identify policy imperatives and investment options for the sector in the wake of globalization and population pressure. While a number of observations found in the paper are not new and have already been pointed out elsewhere, we move beyond the usual description of past performance to include as well an ex-ante assessment of the effects of trade policy reforms on the rice economy in the short and medium terms.Food security, rice economy, Philippines, trade policy reforms

Payment schemes in random-termination experimental games

We consider payment schemes in experiments that model infinite-horizon games by using random termination. We compare paying subjects cumulatively for all periods of the game; with paying subjects for the last period only; with paying for one of the periods, chosen randomly. Theoretically, assuming expected utility maximization and risk neutrality, both the cumulative and the last-period payment schemes induce preferences that are equivalent to maximizing the discounted sum of utilities. The last-period payment is also robust under different attitudes towards risk. In comparison, paying subjects for one of the periods chosen randomly creates a present-period bias. Experimentally, we find that the cumulative payment appears the best in inducing long-sighted behavior.economic experiments; infinite-horizon games; random termination

Survey data of finalists and winners in the search for outstanding teachers in the Philippines, 1988-2010

The data derives from a survey of teachers who competed at the national level in the Metrobank Foundation, Inc. Search for Outstanding Teachers in the Philippines from 1988 to 2010. Conducted in March-September 2014, the survey has complete information from 252 national winners and finalists. The survey collected data on teachers’ professional profile, socio-demographic characteristics, community involvement, socioeconomic characteristic of the teachers’ household including income and expenditure, and their overall perception on the search for process. It also collected information from school heads. The data collected by the survey from the school head include statistics on the educational profile of their teachers, performance indicators of the school, physical characteristics of the school, and school head\u27s general assessment of colleagues and overall perception on the search process. The survey also includes information about the financial literacy of teachers. The dataset is in comma-separated values file (.csv) with accompanying data dictionary (.txt). The questionnaire is also included in data supplementary appendix. This data article is related to the research article, “Awards and Recognition: Do they Matter in Teachers’ Income Trajectory?” Ravago and Mapa, 2020, where data interpretation and analysis can be found

THE AFTA-CEPT and the ASEAN-China Early Harvest Program: An Assessment of Potential Short-run Impact

Theoretical and empirical support for a more liberal trading environment has grown increasingly over the years. In the last decade, many countries have aggressively pursued unilateral trade liberalization. Based on decadal growth rates, globalizing developing countries has outpaced growth of non-globalizing developing economies in the 1980’s and 1990’s. Aside from participation in regular WTO Ministerial to discuss multilateral trade issues, many countries have also entered into bilateral and regional trade agreements (RTA’s). Since 1995, the WTO has received 130 notifications regarding the creation of RTA’s which is slightly higher than the notifications received by GATT over its almost fifty years of existence. In this paper, we aim to sift thru the effects of trade policy on agriculture, focusing in particular on the possible short-run impact of the Common External Preferential Tariffs under the ASEAN Free Trade Agreement (AFTA-CEPT) and the ASEAN-China Early Harvest Program (EHP). While few would argue about the long-run benefits from a liberal trade regime, fewer still would deny the possible short-run adjustment costs that could accompany trade reforms. As such, it would help policy makers to be cognizant of the possible ramifications of pursuing a particular trade strategy. We provide an overview of the Philippine trade policy leading to the AFTA-CEPT and the EHP and isolate their impact. The immediate impact of trade policy is on the effective rate of protection it provides to various sectors. How uniform it is or how diverse reflects the relative protection, how much one sector is favored over another. Ultimately, the resulting trade protection structure would impact on output, income and employment. We measure how the EHP and AFTA impact on these variables. We employ a simulation model following an earlier study under the Joint Tariff Commission-PIDS (TC-PIDS) Study. The simulation analysis is done for three scenarios: (1) the Early Harvest Program, (2) the AFTA-CEPT, and (3) a hypothetical Base scenario reverting tariffs to 1994 levels which allows for comparative analysis that can be useful for policy formulation.Regional trade, ASEAN, China,Early-harvest

Islands of Sustainability in Time and Space

We review the economics perspective on sustainable resource use and sustainable development. Under standard conditions, dynamic efficiency leads to sustainability of renewable resources but not the other way around. For the economic-ecological system as a whole, dynamic efficiency and intergenerational equity similarly lead to sustainability, but ad hoc rules of sustainability may well lead to sacrifices in human welfare. We then address the challenges of extending economic sustainability to space as well as time and discuss the factors leading to optimal islands of preservation regarding renewable resources. Exogenous mandates based on moral imperatives such as self-sufficiency and strong sustainability may result in missed win-win opportunities that could improve both the economy and the environment, as well as increase social welfare across generations.Islands of sustainability, sustainable development, sustainability science, fisheries, forests

THE rice problem in the Philippines: trends, constraints, and policy imperatives

Every political dispensation in recent decades has taken the view that the country has to be able to feed itself. For the country’s political leaders and the agriculture bureaucracy, this has meant that rice, the country’s staple food, has to be locally produced at quantity sufficient to meet the rice requirement of the burgeoning population. Indeed, rice self-sufficiency has been an objective enshrined in all government programs for the agricultural sector since the early 1960s. To achieve the objective, the Government has intervened, albeit in varying degrees, in the marketplace to affect virtually all segments of the supply chain, including importation, and of the demand spectrum. Yet, self-sufficiency has remained elusive. The population is far from being more food-secure now than a decade or two ago. Over the years, rice has become more expensive in the Philippines than in most developing countries of Asia. This has caused reduction in the purchasing power of the incomes of the poor, including landless farmers and urban poor workers whose spending on rice constitutes about 22% of their total household expenditure. Arguably, this could partly explain for the much higher incidence of absolute poverty in the Philippines than in Indonesia, Thailand, and even Vietnam. What has gone wrong? In this paper, we examine the performance of the rice sector over the last three decades. Our aim is to identify policy imperatives and investment options for the sector in the wake of globalization and population pressure. While a number of observations found in the paper are not new and have already been pointed out elsewhere, we move beyond the usual description of past performance to include as well an ex-ante assessment of the effects of trade policy reforms on the rice economy in the short and medium terms

THE rice problem in the Philippines: trends, constraints, and policy imperatives

Every political dispensation in recent decades has taken the view that the country has to be able to feed itself. For the country’s political leaders and the agriculture bureaucracy, this has meant that rice, the country’s staple food, has to be locally produced at quantity sufficient to meet the rice requirement of the burgeoning population. Indeed, rice self-sufficiency has been an objective enshrined in all government programs for the agricultural sector since the early 1960s. To achieve the objective, the Government has intervened, albeit in varying degrees, in the marketplace to affect virtually all segments of the supply chain, including importation, and of the demand spectrum. Yet, self-sufficiency has remained elusive. The population is far from being more food-secure now than a decade or two ago. Over the years, rice has become more expensive in the Philippines than in most developing countries of Asia. This has caused reduction in the purchasing power of the incomes of the poor, including landless farmers and urban poor workers whose spending on rice constitutes about 22% of their total household expenditure. Arguably, this could partly explain for the much higher incidence of absolute poverty in the Philippines than in Indonesia, Thailand, and even Vietnam. What has gone wrong? In this paper, we examine the performance of the rice sector over the last three decades. Our aim is to identify policy imperatives and investment options for the sector in the wake of globalization and population pressure. While a number of observations found in the paper are not new and have already been pointed out elsewhere, we move beyond the usual description of past performance to include as well an ex-ante assessment of the effects of trade policy reforms on the rice economy in the short and medium terms

Environmental Resources, Shocks, and National Well-Being

The contribution of the environmental-resource sector to national well-being is the sum of natural resource depletion and environmental degradation. Inasmuch as existing resource stocks are below efficient levels, better enforcement of existing laws as well as policies that incentivize sustainable use are needed. Similarly, progressive royalty assessment of mineral resources can incentivize exploration without transferring the bulk of resource rents to private interests. In the case of pollution, the key is to face firms with the full costs of their production, e.g. through emission taxes and/or cap and trade systems. Calculating total depletion and degradation (TDD) will facilitate the calculation of green national income (GNI), a more inclusive metric of national well-being. In the same way, simultaneous optimization of disaster management policies in the face of climate change can facilitate a further improvement in national well-being, this time measured as comprehensive national income (CNI)