The economy on a cusp: The proposed VAT amendments and their larger significande

Debates on the revision of the value-added tax (VAT) are about to reach the penultimate stage. Once house and senate have passed their respective versions of the bill, congress - through a bicameral conference committee sometimes referred to as the 'third chamber' - must then agree on the final form of the law. After all the media-posturing, the politicking, and horse-trading have subsided, politicians of both chambers are still left to confront the nation's true interests - and their own consciences. It is vital that they finally pass a law that is right in form and adequate to the economy's needs

Population, poverty, politics and the reproductive health bill

Following an earlier paper titled 'Population and Poverty: The Real Score' (UPSE Discussion Paper 0415, December 2004), the present paper was first issued in August 2008 as a contribution to the public debate on the population issue that never seemed to die in this country. The debate heated up about that time in reaction to a revival of moves to push for legislation on reproductive health and family planning (RH/FP). Those attempts at legislation, however, failed in the 13th Congress, and again in the 14th Congress. Since late last year, the debate has been heating up further on the heels of President Noy Aquino's pronouncements seeming to favor RH/FP, though he prefers the nomenclature 'responsible parenthood'. With some updating of the data, this paper remains as relevant as ever to the ongoing public debate. It is being re-issued as a Discussion Paper for wider circulation

Unpaid Work and the Economy: Linkages and Their Implications

Unpaid work, which falls outside of the national income accounts but within the general production boundary, is viewed as either "care" or as "work" by experts. This work is almost always unequally distributed between men and women, and if one includes both paid and unpaid work, women carry much more of the burden of work than men. This unequal distribution of work is unjust, and it implies a violation of the basic human rights of women. The grounds on which it is excluded from the boundary of national income accounts do not seem to be logical or valid. This paper argues that the exclusion reflects the dominance of patriarchal values and brings male bias into macroeconomics. This paper shows that there are multiple linkages between unpaid work and the conventional macroeconomy, and this makes it necessary to expand the boundary of conventional macroeconomics so as to incorporate unpaid work. The paper presents the two approaches: the valuation of unpaid work into satellite accounts, and the adoption of the triple "R" approach of recognition, reduction, and reorganization of unpaid work, recommended by experts. However, there is a need to go beyond these approaches to integrate unpaid work into macroeconomics and macroeconomic policies. Though some empirical work has been done in terms of integrating unpaid work into macro policies (for example, understanding the impacts of macroeconomic policy on paid and unpaid work), some sound theoretical work is needed on the dynamics of the linkages between paid and unpaid work, and how these dynamics change over time and space. The paper concludes that the time has come to recognize that unless unpaid work is included in macroeconomic analyses, they will remain partial and wrong. The time has also come to incorporate unpaid work into labor market analyses, and in the design of realistic labor and employment policies

Rejoinder

We are pleased to note that the discussion paper we wrote ("How to change a constitution by handwaving") has attracted some interest from the public and observers of economic policy. Among the more thoughtful responses the paper has received is that from the Foundation for Economic Freedom (FEF). Indeed, their response concedes the main point of our paper, which is that compared with lifting foreign-equity restrictions: "Corruption and infrastructure gaps may well be more significant turnoffs for foreign investors." Notwithstanding this, the FEF response incongruously then insists that "removing the restrictions is a necessary condition". To insist on their conclusion, the FEF challenges our interpretation of the quantitative evidence as well as presents illustrative anecdotes or events meant to repair what they perceive as our paper's being "ahistorical and devoid of historical context". Here, we set the record straight on both FEF's appreciation of the econometric evidence and on the anecdotes they recount

How to change a constitution by hand-waving: (or, the unbearable lightness of evidence in support of lifting foreign ownership restrictions)

This paper provides a review of the empirical evidence cited in the current public discussions on removing the remaining constitutional restrictions on foreign-equity ownership in certain economic sectors. A fuller appreciation of the given evidence shows that lifting equity restrictions is not a necessary condition for explaining the inward stocks of foreign direct investment (FDI) in the cited countries, including the Philippines. While restrictive equity rules may represent a hindrance to FDI, their potential effects are small and sometimes insignifcant in comparison to other explanatory variables such as the ease of doing business, physical infrastructure, and perceived corruption. The paper cautions against an uncritical mindset towards FDI, discussing how consistent empirical evidence of the positive effects of FDI on host economies has proved elusive and that knowledge and technological spillovers from FDI are highly contextspecifc, not unconditional, and not without cost. Instead, a more discriminating approach, focusing on the quality of multinational enterprises and its activities, rather than simply on the volume of FDI, is recommended. Finally, the paper warns that the push for legislative fexibility, while attractive on the surface, can be self-defeating since it also has the potential of increasing investment uncertainty, particularly given the idiosyncrasies of Philippine political economy