Investment, institutions, and governance in Asia

We investigate the extent to which the investment slowdown in many Asian countries since the Asian Financial Crisis is attributable to changes in governance institutions. In the process we test the more general hypothesis that different aspects of governance will become relevant constraints to investment and growth at differing levels of countries’ development. This hypothesis is validated and explains a standing paradox that finds certain governance aspects – notably voice and accountability and control of corruption – do not apparently figure as explanations in the average growth record. We show that in fact they do, though only at certain levels of development.

A Combined Preconditioning Strategy for Nonsymmetric Systems

We present and analyze a class of nonsymmetric preconditioners within a normal (weighted least-squares) matrix form for use in GMRES to solve nonsymmetric matrix problems that typically arise in finite element discretizations. An example of the additive Schwarz method applied to nonsymmetric but definite matrices is presented for which the abstract assumptions are verified. A variable preconditioner, combining the original nonsymmetric one and a weighted least-squares version of it, is shown to be convergent and provides a viable strategy for using nonsymmetric preconditioners in practice. Numerical results are included to assess the theory and the performance of the proposed preconditioners.Comment: 26 pages, 3 figure

Secular morality and the university

Secular morality is implied in the University's very founding, with roots dating back to the 18th century Enlightenment that informed both the defeated Philippine revolution and the political ideas of the American occupiers. Citing recent knowledge gained from behavioural games and evolutionary psychology, this paper discusses how a public morality that is secular, minimal, and libertarian, is both possible and desirable in a complex society. The paper then illustrates how such a morality can inform politics and public policy in such difficult issues as illegal gambling, contraception and abortion, and living-organ donation. The state university's role in developing and strengthening the idea of secular morality is then discussed

Smith's economic morals: An introduction

This article introduces the moral philosophy underlying Smith's contributions to economics and emphasises the close connection between Smith's two principal works, the Theory of moral sentiments and the Wealth of nations

Skills, migration, and industrial structure in a dual economy

A comparative-static model describes the decline of manufacturing in the face of rising overseas employment through a mechanism other than the Dutch Disease. Instead it is competition for skilled labour and the relative ease in producing skills that affect the size of the manufacturing sector, including its employment of unskilled labour

Completing Ostrom's table: A note on the taxonomy of goods

A framework is proposed to subsume public goods and common-pool resources, respectively, as specific cases of positive and negative externalities. A pure public good is a positive externality whose appropriable benefits are too small or too uncertain relative to the high private cost for anyone to produce it in any amount. The common-pool problem is a case where each agent's action imposes a negative externality on everyone else

Just how good is unemployment as a measure of welfare? A policy note

The government is rightly concerned with employment generation to make growth inclusive. The use of the open unemployment rate to measure its success, however, is misplaced. In a developing country with a large informal sector and in the absence of unemployment insurance, open unemployment is primarily a middle-class phenomenon: the unemployed are not predominantly poor, and the poor are not predominantly unemployed. Measures of productivity and shifts of labour across sectors may contain more information

Deviant behavior: A century of Philippine industrialization

Recent work has documented industrial output growth around the poor periphery from 1870 to the present, finding unconditional convergence on the leaders long before the modern BRICS and even before the Asian Tigers. The Philippines was very much part of that catching up. In the decade or so up to 1913, Philippine industrial output grew at 6.3 percent per annum, way above that achieved by the industrial leaders. Indeed, the Philippines was the third Asian country to enter the 5% industrial growth club: Japan 1899, China 1900, the Philippines 1913, Taiwan 1914, Korea 1921, and India 1929. The Philippines continued its industrial catch up during the interwar years 1920-1938, as it did during the ISI years 1950-1972. While the Philippines conformed to the world-wide unconditional industrial convergence pattern for seven decades, it began to deviate from the pack in the 1980s, leaving the industrial catching up club in 1982, never to re-enter. What were the causes of this regime switch? Was it political instability at a critical time in the 1980s? Was it a subsequent failure to exploit the move of Japanese manufacturing FDI into the region? Was it an institutional weakness benign in the pre-1982 past but made more powerful since? Was it some liberal policy package that penalized manufacturing when it was already on the ropes? Was it a labor emigration surge in the 1980s that stripped the work force of industrial skills? Was it some massive Dutch Disease created by subsequent huge emigrant remittances? Given the initial political shock, all of these negative forces had their influence in the form of a 'perfect de-industrializing storm'

Lacking a backbone: The controversy over the 'National broadband network' and cyber-education projects

The National Broadband Network (NBN) project and the Cyber Education Project (CEP) are state-initiated programs originally conceived to provide last-mile connectivity and interoperability to all government offices and all public schools, respectively. The backbone service required for this was to be procured from the private sector either from extant backbones or via BOT. When the soft loans from China became available, these two programs became scaled up to include two government-owned backbones. We examine the possible economic rationales for a government backbone and found the scaled-up NBN and CEP severely wanting. The prior question we address is: Does the Philippines need a government-owned backbone? Our answer is: No