Archive for the ‘governance’ Category

It is the sad truth that a people deserve the government it gets. The poor quality of our polity is not merely or mainly due only to the poor quality of our politicians and bureaucrats but also due to the steady degradation of the quality of our own people and citizens most of which may be mired in the daily grind of making ends meet.

I speak as a senior citizen whose interest in politics and governance started decades ago–in my grade school years.

However, I also notice a similar lack of civic spiritedness and concern about the common weal among comfortable people thus material poverty may not be the cause for apathy. It is poverty of the human spirit.

Studying the history of other peoples, it seems that great shocks such as international war, revolution, and extensive natural disasters provide defining moments for a nation to unite and put its house in order. Should it come to that?

Reflecting on our own experience, I note that we have yet to unify around key ‘boundary’ questions:




Bangsa Moro?



midget Americans?

brown Chinese?




Treaty of Paris limits?

plus the West Philippine archipelago?

plus the Philippine Rise?





Coup d’etat?

People power?

Vote buying/selling?

Armed violence?

Rizal warned earlier that there are no tyrants unless there are slaves. Politics is really a relationship. Most of our despicable politicians were (sadly) elected into office. We are also complicit in the corruption of state officials and institutions. True, there are pathologies and imperfections in our instititutions. But these pathologies have long been analyzed and sensible solutions had been proposed. Why can’t we as a people adopt these solutions?

Is it because of the opposition of an intransigent political elite?

But then, who is truly sovereign?

Aren’t they our servants?

Or what we have here in the Philippines is an electoral oligarchy pretending to be a full-blooded democracy?

And that, we do not have what it takes to fix our house?

Comments. questions, and reactions are most welcome.


I did not comment on the on-going impeachment trial of Supreme Court Chief Justice Renato Corona except for the blog-entry on the G-word [see <>].

My reasons: I did not have anything new to say or a novel spin on the developments even if the impeachment was the news of the day for three months running.  At many instances, I got bored with the proceedings when most of the business of the day was marking of exhibits and as the defense resorted to technicalities that a non-lawyer like me cannot follow.  Of course, I also had work to do.

Senator Miriam Defensor-Santiago

This reminds me of the Senator Miriam Defensor-Santiago’s admonitions against non-lawyers making commentaries on the impeachment proceedings.  At one point, she argued that the law is a body of technicalities.  For these reasons, it requires one to go through four years of law school and a year to prepare for and pass the bar examinations.  So there!

However, to our amusement and consternation, both the prosecution and defense panels resorted to several schemes which could be best considered as fool-hardy.

We Filipinos have a sensible warning: Do not pick up a huge stone only to fumble and the stone drops on your foot.

Gambits are risky and can go both ways. They could pay off big time or could land people hard on their back-sides.

Let’s consider the prosecution.  At the heart of its Article 2 of the Articles of Impeachment is the charge that Chief Justice Corona under-declared his assets (particularly peso bank deposits) in his sworn statements of assets and liabilities and net worth (SALNs).  If the prosecutors alleged this misdeclaration, it meant that they had prior access to Corona’s bank records even before they were able to prepare the Articles of Impeachment.  During the impeachment of then President Joseph Estrada, the House prosecution was allowed by the Senate to issue universal subpoenas for banks to submit bank records of Estrada and his alias–Jose Velarde.

Lead prosecutor Rep. Niel Tupas Jr.

 This time, the Senate allowed the issuance of subpoenas only pertaining to specific peso bank deposits of Corona.  The prosecutors complied by specifying the account numbers.  However, they found they needed to explain how they were able to obtain such information.  They needed some defense against the ‘fruit of the poisonous tree’ doctrine; that if the evidence was obtained illegally, then it would be inadmissible in court.

Rep. Rey Umali

Rep. Rey Umali (Oriental Mindoro) tried to convince the senators he got an envelop containing the bank documents from a “small lady” within the premises of the Senate.  However, footage from the building’s CCTV cameras did not support Umali’s story.  So it was Rep. Bolet Banal’s turn to make his best shot.  Banal claimed he found the documents left at his house’s gate.  One senator (I cannot remember who) asked him if there were CCTV cameras outside his house.  I could claim he sorrowfully said there were none.

Rep. Bolet Banal

As things stand,  the prosecution’s gambits paid off.  The Senate ruled (with three not voting) to accept the evidence submitted regarding Corona’s peso deposits.  

Serafin Cuevas

 The defense panel, headed by former Associate Justice Serafin Cuevas, had their share of gambles.  The first was relatively minor: a charge that lead prosecutor Tupas was himself building a P50 million mansion in Quezon City.  It did not gain traction since it was Corona who was on trial.  Representatives are not impeached; they must win elections otherwise they cease to be representatives.

Then, in the middle of February, the defense panel clad in red shirts (but with Cuevas absent) gave a week-end press 

conference and accused Malakanyang of offering P100 million for each senator to defy the Supreme Court’s order to keep Corona’s dollar deposits secret.

The defense took a calculated risk.  The senators were predictably incensed and several took the defense to task for making the accusation and was asked to name names–a usual demand in Philippine politics.  Atty. Roy of the defense apologized profusely and explained that it was not their intention to tarnish the reputation of the honorable senators but only to warn of the Palace’s intentions.

It also appears that the defense’s gambit paid off.  During that same Monday, the Senate voted to uphold the Supreme Court’s ruling on Corona’s dollar deposits.  The apparent subtext is: if you voted against the Supreme Court, then you were reached by the Palace!

Other ploys of the defense did not meet as much success.  It wanted anti-Corona senators such as Senators Franklin Drilon and Kiko Pangilinan to inhibit themselves from the impeachment proceedings.  Suntok sa buwan ito!  It is clear that President Noynoy Aquino wants Corona impeached and as loyal members of the ruling Liberal Party, Drilon and Pangilinan are expected to support the President.  Even if that involves assisting a clearly-ill prepared prosecution panel.  

Senator Franklin Drilon

The defense could have gained greater credibility if they also asked for the inhibition of clearly pro-Corona Senators such as Defensor-Santiago.  That is, they want an impartial court.  In contrast, the prosecution panel (save for the Vitaliano Aguirre incident) takes Santiago’s tongue-lashing and tirades in stride.

In the past days, Corona himself went on a media blitz and implicated two senators in a seeming plot to unseat him as Supreme Court Chief Justice.

First, he claimed Sen. Teofisto Guingona III, also of the Liberal Party, asked him to share his term as chief justice with Associate Justice Antonio Carpio, the man believed to be acceptable to President Noynoy. Guingona dutifully denied Corona’s story and insisted they only met for dinner with other people.

Senator Teofisto Guingona III

Then Corona said that a male senator approached him and asked him to resign as chief justice.  He declined to name the said senator because supposedly it will make the latter ‘angrier’.  He added that senator knew that Corona was referring to him and that he will name him in due time. Feeling alluded to, Drilon denied Corona’s allegations and challenged the former to name the so-called senator immediately.

What is Corona’s game?  Why is he riling some senators who will judge him?  

I believe he is guided by the number of senators required to convict him.  At present, there are only 23 senators because the vacancy created by the election of Noynoy Aquino as President was not filled.  Be that as it may, 16 senators must vote in favor of his conviction.  If only 15 senators do so, he is acquitted and remains Supreme Court Chief Justice.  Put in another way, if 8 senators vote against his conviction, he is acquitted.

If indeed he (and his defense panel) is riling  Drilon, Pangilinan, and Guingona, he probably believes that the former will vote against him no matter what.  And the purpose of the propaganda offensive is to convince the public that the three will vote against him simply upon the bidding of the Palace.  One must remember that his chief battle cry is to maintain the judiciary’s independence.

The defense will present its case tomorrow.  The arguments of the defense will be the subject of future blog entries.



(Author’s note:  This blog entry was a seminar presentation made before a regular class at the National Defense College of the Philippines, where I once served as vice president for research and special studies, during the first quarter of the year.  Given the challenge of melding the diverse concepts and phenomena covered in the presentation, the talk is offered for the consideration of  followers of this blog.)

Logo of the National Defense College of the Philippines (NDCP)

Some key concepts need to be clarified so we can make progress in this presentation.  Among them include politics, constitutions, corruption, state or regulatory capture, and legitimacy.

What constitutes politics?  Politics is an ubiquitous aspect of life as human beings need to make, amend and preserve the general rules under which they live.  It involves the contest for scarce goods, both tangible and intangible.  With scarcity, the political contests results in some getting and some not getting the scarce resources.  Conflict therefore is one aspect of political life.  

However, people also realize that for order to ensue, they need to cooperate with each other notwithstanding differences in tastes and preferences and conflict over limited goods.  They need to agree on the fundamental rules of the so-called political game.   Otherwise, it would be quite impossible to build and sustain human communities.  

If politics is seen as a ‘game’, then it is rule-bound.  As a rule-bound process, politics is civilized.  Absent rules, politics is a no-holds barred melee.  Without rules, politics is war.

To build human communities, constitutions, which are the ground rules of the political game, are needed.  Constitutions indicate who rules, how they will rule, and why rulers should be obeyed by the ruled.

If we are to extend the metaphor further, the nature of the game is important and this is also specified by the constitution.  The rule book specifies the game: it’s basketball, not tennis!  It’s elections, not coups or insurrections!

When political actors stick to constitutional rules, they’re engaged in regular politics.

When they don’t, they’re engaged in irregular or extra-constitutional politics.  In at least three occasions in our nation’s history, leaders were sought to be deposed through irregular processes known as ‘people power’.  These attempts succeeded in February 1986 and January 2001 but failed in May 2001.   

It is obviously impossible to write a rule book for extra-constitutional politics.  Try it: write the rule book for ‘people power’!

Human communities will have to deal with constitutional conundrums.  First, how does a group of people agree on a constitution in the first place?  For instance, what will make the local communists and secessionists agree to give up the armed struggle and participate in rule-bound politics?  Will adversely-affected parties not opposed any peace agreement reached with these political actors.

Ultimately, a constitution is enforced by armed force.  The secret of effective constitutions lies in how the armed specialists of violence are constrained even as they are empowered to enforce the law.

I really hate to be a spoil-sport but I will go on just the same and raise some questions re the May 10 general elections.

The Inquirer today reports that “[T]he number of disenfranchised voters in last Monday’s election may range from 2 million to 8 million, a figure that could have changed the picture of the vice presidential and senatorial races, according to the Commission on Elections’ consultant on queue management.

While the automated voting was a success, Marvin Beduya said other aspects of the May 10 computerized elections may be considered a failure.

Beduya is quoted saying: “I think we should celebrate the success of the automated voting soberly and with the thought that it may not have delivered the true will of the people, the key purpose of elections, in a manner that is very difficult to prove”.

The long lines and the crowds wilting outside the polling precincts may have discouraged millions of voters from exercising their right to vote, said Beduya, an adjunct professor at the Asian Institute of Management, in his blog

He said this may have affected the outcome in the tight races, particularly in the vice presidential contest between Makati Mayor Jejomar Binay and Sen. Manuel Roxas II. The margin of votes between the two candidates was just under a million votes.

Basing his computation on the voter turnout, the Parish Pastoral Council for Responsible Voting data, and the historical record, Beduya said between 1.91 million to 7.92 million voters may have decided not to turn out and vote—what other analysts have termed “self-disenfranchisement.”

“I am inclined to believe that these discouraged voters who came from the demographic of the elderly and the disabled, mainly in the urban areas and so may have voter preferences skewed to certain candidates,” he said.

Aside from the vice presidential race, this management failure may also have affected the contest among the 11th-, 12th- and 13th-placed senatorial candidates. Based on historical data, the margins between the candidates in these spots are small.

Beduya said the congestion at the polling centers was due to such factors as the clustering of the precincts, the board of election inspectors lack of training to handle the large numbers of voters, and technical anxiety about the voting machines.

Let me comment on Beduya’s observations.  How can anybody celebrate the ‘success’ of the automated election system if one similarly recognizes that it may not have reflected the ‘true will of the people’ given the large numbers of apparently disenfranchised voters?

I also argue that Beduya makes an unwarranted conclusion when he declares that the disenfranchisement only affects the contest between Roxas and Binay for the vice presidential post as well as the contest for the 11th up to the 13th senatorial posts.

I think it can also affect the presidential contest between Noynoy and Erap.

Let me first declare that I will give up my Filipino citizenship if Erap gets a second lease in the presidential palace.

Let me also say that I have already accepted Noynoy as the 15th president of the Republic.

However, if some 2 to 8 million voters were disenfranchised last Monday, then even Noynoy’s spectacular lead over Erap of close to 5 million votes does not guarantee that he actually won the polls especially if we take the high end of the estimate.

Of course, we will not know how the disenfranchised would have voted last Monday.  For all we know, most of them would have still voted for Noynoy.

But that is precisely the point.  We will not know and we cannot know–a point that Beduya himself recognizes.

We should really pay attention to improving the queue management system, as Beduya was reported to have recommended last Tuesday.  It may have been a mistake to cluster precincts and prior time-and-motion studies should have been mounted to see if 1,000 voters per clustered precinct could be properly serviced within the designated voting time period.

Conrad de Quiros and Harry Roque are reportedly happy to be proven ‘wrong’ re their apprehensions over the new voting system.  The local bourse also reacted favorably with upbeat indices.

Elsewhere, Moody’s believes the absence of doubt re Noynoy’s victory is favorable to the country’s credit rating.  The credit rating agency said the seeming consensus that Aquino was the clear winner of the 2010 presidential election meant that the probability of disruptions created by protests by losing candidates is low.

Consequently, Moody’s said, the absence of chaos in the political front appeases investors and encourages a positive outlook on the Philippine economy.

Given Beduya’s observations regarding substantial voter disenfranchisement, aren’t the celebrations and congratulations premature?  Or shouldn’t they be at least qualified?

I strongly share Mr. Beduya’s opinion and concern that we cannot simply move on and feel good about Monday’s elections.  We need to dissect our first stab at automated elections, identify shortcomings, and implement measures to correct them so they will  not happen again in future elections.

Finally, can’t the COMELEC be put to task for allowing disqualified presidential candidate Acosta to still be made available to voters?  Large notices regarding his disqualification should have been posted in every precinct to warn voters who will choose him that they are wasting their votes!


Smartmatic/TIM PCOS machines: Will they work to contract specifications today?

The Philippine Star reports today that “foreign investors have adopted a wait-and-see attitude, putting on hold or temporarily withdrawing their investments in the Philippines due to jitters over today’s elections, according to Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa Guinigundo.

Gunigundo is quoted saying: “We continue to see inflows from the external markets. Perhaps if there will be – we don’t have the numbers yet – it is because of election jitters”.

He also pointed out that foreign investors could have adopted a wait-and-see attitude because of the uncertainties brought about by the May 10 elections.

Guinigundo said the jitters could have forced investors in the financial and equities markets to temporarily pull out their investments in the Philippines.

What Gunigundo had observed are signs of the political-business cycle in the Philippines, a phenomenon identified years earlier by UP School of Economics dean Noel de Dios.  Post-1987, the cycle theoretically repeats every six years, that is, every time a new president is elected.  Since the Philippine president is restricted to a single term, investors apparently adopt a wait-and-see stance in the early months of the term of the new president to discern his (or her) general policy preferences and programme.  Then as the policy landscape firms up, investments (including portfolio) will come back in.

Investors may also opt to exit before the presidential elections so they may not be forcibly locked in during the early term of the incoming national chief executive.  This is insurance in case the new president adopts policies unfriendly to capital.

It is an empirical matter whether the cycle was observed since the year 2000.  If we may recall, President Estrada’s grip on power started slipping when his erstwhile ally, Gov. Chavit Singson, started singing about jueteng payolas in late 2000.  Then it was almost a fast break to his derailed impeachment and his eventual ouster in January 2001.  I surmise that capital left the country in late 2000 and adopted a cautious attitude through the first three quarters 2001 as President Gloria Macapagal-Arroyo had to consolidate her grip on power in the light of the challenge of the poor people uprising of April-May 2001.

I also hypothesize that capital adopted the same wary stance prior to the May 2004 presidential elections.  It would be curious to find out how capital behaved in response to the 2003 Oakwood mutiny , the ‘Hello Garci’ revelations and the political crisis generated in the middle of 2005 and the attempted coup of February 2006.  May I call on Noel de Dios to do the appropriate study.

If today’s elections will be concluded successfully, investors will have no cause for alarm because a presidency either by Noynoy Aquino or Manny Villar will mean the adoption of orthodox or centrist business policy.  Investors may be quite wary of a new Estrada presidency given the latter’s demonstrated propensity to give preference to his midnight cronies.

To be fair, investors may also be cautious about allegations regarding Villar’s use of governmental powers in favor of his own business interests.  If Villar wins the presidency, he will have to assign his assets to a blind trust or to divest completely and convincingly to avoid tremendous conflict-of-interests issues.

Of course, if elected president, Noynoy must likewise disclose his assets, assign them to a blind trust or divest, and assure the electorate that he will not use or will not be used so his clan’s control over Hacienda Luisita will continue or that the Supreme Court will rule on the long-standing temporary restraining order against the Presidential Agrarian Reform Council’s ruling for distribution of Luisita land to its farm workers.

The last time we heard news about Hacienda Luisita is that it is heavily indebted.  Thus, we have to be assured by Noynoy that if he gets elected president, the estate will not get preferential credit especially from government financial institutions.

What exercises investors’ worries more than who will be the successor in the presidential palace are grave concerns regarding the automated electoral system adopted for the first time (without any piloting) amid all these news regarding malfunctioning PCOS machines, undelivered and untested flash cards, non-independently-verified machine source codes, and the like.

The worry list is quite long.

Hence the prudential behavior of capital.

Some twenty-four odd years after the ‘people power’ revolution of EDSA in the Philippines, the country’s democracy is still in trouble and illustrates the continuing problems of cosmetic change with unrevised socio-economic structure. The Philippines’ predicament mimics many of the post-authoritarian regimes created by the third and fourth waves of democratization. In Thailand where the ‘red’ crowds are currently occupying central Bangkok, for instance, the 2006 ouster of a similarly populist political leader (Thaksin Sinawatra) who did not seat well with the Bangkok urban set and the Thai king, mimicked the ouster of Erap Estrada in the Philippines in 2001, and has installed a military-dominated (but sanctioned by the king) regime.  The musical-chairs game in Ukraine seems to raise questions why the Orange Revolution was waged in the first place. It is thus warranted to re-examine the efficacy of the ‘people power’ route to democracy.

The post-Marcos record

The post-authoritarian government of Mrs. Aquino was an uneasy coalition between anti-Marcos civilians and military rebels and ‘reformists’. Critical of Aquino’s initial moves (e.g. freeing prominent CPP-NPA leaders and conducting peace talks with the communists), military rebels and Marcos loyalists repeatedly tried to topple her government up to December 1989 (Thompson 1996). Through these coup tries, Enrile and his military allies wanted to capture state power (which they failed to do in February 1986) for themselves. The US government opposed parlaying with the communists and worried that Aquino would close its military bases. Meanwhile, the communists scored significant propaganda gains through daily tri-media exposure during the peace talks, raising fears of an eventual leftist takeover or participation in a coalition government. The killing of several demonstrating peasants by the police in January 1987 ended peace negotiations and renewed the anti-insurgency drive.

Besieged by insurgents and military rebels, Aquino adopted the policy preferences of more powerful opponents and patrons. The resumption of anti-insurgency operations pleased the U.S. government and eroded the basis for military coups. Keeping options open earlier, she eventually favored retaining the American military bases. Business groups and big landowners were placated by the dismissal of a sympathetic-to-workers labor minister (and other left-leaning cabinet members) and a watered-down agrarian reform law. The regularization of government in 1987-1988, with the ratification of a new constitution and the consequent establishment of a legislature and reconstitution of local governments, returned previously disenfranchised politicians to power at various levels.

The peaceful assumption of the presidency by Fidel Ramos in 1992 and Joseph Estrada in 1998 marked a high point in the consolidation of Philippine democracy. However, chinks begun to show afterwards. A less-than-universally-acclaimed reprise of ‘people power’ ousted Estrada and installed Gloria Macapagal-Arroyo as president in January 2001 (Lande 2001; Putzel 2001). Arroyo survived a ‘poor people power’ uprising in May 2001 and a military mutiny in July 2003 . She contested for the presidency in 2004, the first time for a post-Marcos incumbent to do so since the 1987 constitution has imposed a single-term limit. Apart from using government’s resources, there was a strong perception that she cheated to win the elections (Muego 2005). In mid-2005, wire-tapped conversations between her and a ranking Commission on Elections (Comelec) officer surfaced and insinuated padding of the count in her favor (Hedman 2006). While her government survived various challenges since then (including resignation of many cabinet members, two impeachment charges, and a coup attempt in February 2006), questions regarding her legitimacy continue to linger and contribute to political instability. In 2007, her government was scandalized by credible allegations of bribery and other corrupt acts. These developments raise serious doubts about the progress of Philippine democratization since February 1986.

To date, a final closure regarding the dictatorship has yet to be achieved. There is no Filipino equivalent of the truth and justice commissions organized elsewhere to pinpoint responsibility and prescribe ways to heal a divided and brutalized society. The AFP, torturers and all, was absolved of its human rights violations during the dictatorship for abandoning its commander-in-chief by merely donning an NAFP (N for new) insignia. The same is true for the US government. Their joint culpability was not even whispered about during the heady days after Marcos’ ouster. The Aquino government eventually allowed the re-entry and political rehabilitation of most of regime stalwarts after Marcos’ death in 1989. The accommodations and compromises reached after February 1986 suggest that the democratic transition was more of a pacto along the lines of the Brazilian case (Hagopian 1990) rather than a real ruptura as argued by Thompson (1996), or the ‘insurgent path’ in South Africa and El Salvador (Wood 2001). This means that the democratic transition in the Philippines continued rather than ended with Marcos’ exile.

However, the analysis of Philippine democratic transition should be distinguished from democracy’s problems. Obviously, the democratic institutions established after 1986 were clear improvements over the dictatorship (Thompson 1996). The effectiveness of civil resistance in ending authoritarianism is clear. However, it could not be reasonably burdened with the task of consolidating democracy in the Philippines and elsewhere. The rather distasteful compromises with the military and regime stalwarts may have been necessary to ensure the survival of a fledging democracy besieged by military rebels and communist insurgents during Aquino’s term.

Better an imperfect democracy rather than a return to authoritarianism. A principled commitment to nonviolence may not be needed to oust a dictator. It may however affect prospects for democratic consolidation. If elite political actors once resorted to nonviolence as a political expedient, then violence may be resorted to if deemed necessary in the future. One can only note how easily the Aquino government unsheathed the ‘sword of war’ against the communists in 1987. In the process, democratic principles and civil political dialogue may be seriously compromised. A key problem is how a democracy (restored by a broad political coalition that includes an anti-revolutionary albeit reformed military) will deal with an on-going communist insurgency.

It is quite clear that the democratic credentials of any government will be put to a severe test. Continuing human rights violations by the Philippine military from 1987 up to the GMA presidency are among the worst aspects of post-Marcos governments. Thompson (1996: 197) reminds us however that ‘such crimes committed by an otherwise democratic government in the context of a civil conflict are not exceptional’. These difficulties recall the single most important prerequisite identified by Rustow (1970) in his seminal work on democratic transition and consolidation—that the ‘boundary’ question is resolved. That is not the case in the Philippines. Armed Muslims want to secede and armed communists and military rebels don’t share the consensus around elections and representation.

In other democratization cases, this question was settled. The Soviet empire had to broken up into several smaller states and Czechoslavakia was split in two.

Another problem in the Philippines: how will a restored democracy make its military accountable for its authoritarian past without being endangered by a military backlash? The blanket absolution of the AFP, especially of the RAM leaders (many of whom were accused of being heavy torturers), was essentially wrong yet was politically necessary at the time. The failure to pursue military accountability during martial law was further compounded by a kids-glove treatment of military putschists against the Aquino government by her defense officials, including soon-to-be President Ramos. Ramos himself bought tactical peace with a political settlement with military rebels during his first years in office. The shortcomings of this policy of appeasement will be revealed subsequently by the unhealthy role played by the military in the ouster of President Estrada in January 2001, and the coup attempts against President Arroyo in July 2003 and February 2006.

The Philippine experience underscores the extreme difficulties faced by a restored democracy as it tried to consolidate itself while weighed down by the legacies of authoritarianism (a weak economy, a highly-politicized civilian and military bureaucracy, weak or non-existent political institutions, and continued existence of maximalist forces), the shallowness of its elite democracy, and an unresolved first-order ‘boundary’ question. After Marcos’s ouster, the record of democratic commitment is mixed. The political elites and ‘yellow’ forces in the Philippines would subsequently fail to sustain their democratic credentials in several occasions. A reprise of ‘people power’ in January 2001 failed to impress true democrats since a democratically elected albeit corrupt president, Estrada, was deposed. As an exercise of extra-ordinary or irregular politics, ‘people power’ stunted the growth of the country’s political institutions. These same elites apparently turned a blind eye to a prima facie case of systematic cheating by President Arroyo during the May 2004 elections to prevent a populist Estrada-like presidency. While expedient in 2001 and 2004, the failure to uphold democratic principles is at the root of current political instability. Questions regarding the legitimacy of Arroyo’s mandate have inspired parodies of ‘people power’ since then. After weathering a rather inchoate ‘poor people power’ uprising in May 2001 and a military mutiny in July 2003, her government almost fell apart in July 2005. She survived another coup attempt in February 2006 through emergency rule. While styled as a referendum on her continued rule, the May 2007 mid-term elections failed to settle the legitimacy question.

This high-mindedness could flounder at the realist shoals and rough tumbles of everyday politics. Notwithstanding the less-than-pristine basis of civil resistance in the Philippines, it did depose the Marcos dictatorship. What is of greater value—the ouster of the dictatorship or a principled commitment to non-violent means of resolving inevitable conflicts? Upholding the democratic mandate of a venal chief executive or a preference for good governance? Should irregular politics be frowned upon since they undermine existing institutions or should non-institutional deviations be tolerated or even encouraged given institutional inadequacies and dysfunctionalities? Or are these false dilemmas?

Theoretical propositions

I borrow from work I have done earlier on the Soviet reform project from 1956 to 1991 (Mendoza 1992) and forward these theoretical propositions regarding democratization and democratic transitions.

1. Ultimately, transitions from authoritarianism are both prone to voluntarist action (qua actor-directed processes) and vulnerable to material and subjective (i.e., cultural) constraints. In this sense, therefore, there is no uniform road from authoritarianism and each country necessarily charts an idiosyncratic path.

2. Democratization is a politically contentious process. First, since it proposes to change or to disrupt existing institutions (understood in a broad sense ala Douglass North as ‘rules of the game’), it will always invite opposition from interests and groups comfortable with the status quo or from those who believe that the changes that had been achieved so far are quite enough. In addition, there is a time lag before the benefits of democratization could be realized or made apparent. This delay and the difficulties experience during the period could be used as arguments for scuttling the democratization process. For one, the post-authoritarian democratic regime must (by definition and by necessity) recognize and guarantee the political enfranchisement even of unrepentant or latent sympathizers of the deposed regime. Secondly, even in the rare case of apparent unanimity for the necessity of change, differences on the nature, pace and sequencing of democratization reforms will most likely arise and precipitate political struggles. Thirdly, the dysfunctionalities and turmoil generated by democratic transitions also provide leeway for other political projects to be implemented. The possibilities for non- and pseudo-democratic projects are almost always present. This is quite apparent in post-1986 Philippines as exemplified by the current presidency of Gloria Macapagal-Arroyo since 2001.

3. The above proposition leads to a third major insight—the open-endedness of political processes—one gained through a hindsight evaluation of transitions from authoritarian rule initiated from the top, or what I call abo-reformism (reform from above). Notwithstanding the ‘people power’ circumstances of the authoritarian regime’s demise, all transitions from authoritarianism are elite-directed processes. This is the necessary and logical outcome both of the difficulties of maintaining long-term popular mobilization and the inherent appetite of elites to limit democratic changes. In fact, many transitions could be characterized as popular projects hijacked by elites.

Appropriate institutions and technologies of ‘people power’

It can be argued that the democratization project is the evolution of appropriate technologies and institutions. A careful reading of the Bolshevik (which was a ‘people power’) project indicates that it entails the institutionalization of new and appropriate technologies of production and distribution and, above all, of governance. While the post-authoritarian project of democratization may not seem, at first glance, as comprehensive as the Bolshevik project—the realities in underdeveloped jurisdictions like the Philippines where socio-inequalities can undermine legal equality require a similar broadness.

Social-hierarchical (as opposed to technical-hierarchical and therefore socially-neutral), rather than horizontal or associational, relations between persons imbricate the existing technology of production the world over. Taylorism organized the capitalist labor process so that it was conceived and directed from a hierarchical center and could be executed with parts of the entire process done by distinct groups of workers supervised by foremen and surveilled by timekeepers. The institutional expression of Taylorism is the factory assembly line and the consequent shopfloor division of labor. The objective was to remove any element of worker control over the pace, intensity and quality of work. Taylorism was adopted by Lenin himself instead of ‘workers’ control’ since Taylorist methods were seen as particularly useful in building the Soviet industrial base with a work force which was relatively young and inexperienced and which was not weaned from its peasant origins, traditions and values.

The available technologies of distribution and economic organization are limited to the market and centralized state allocation, or metaphorically, the ‘invisible hand’ and the ‘central plan’. The German ‘social market’ is an attempt to essay a third way just like other social democratic welfare states in West Europe. Karl Polanyi (1957) noted that the organizing principles of reciprocity and redistribution characterized pre-capitalist societies. Plan and market are weak in several respects. For one, the problem of monopoly arises in both cases. The most likely reaction to institutional failure is to adopt its antipode; that is, the response to state failure is to marketize and vice-versa. “Third way’ experiments appear to be doomed by Kornai’s detection of the strong affinity between specific modes of property ownership and economic coordination mechanisms, i.e., between state ownership and central planning and between private property and market coordination. On the other hand, the rule of the few over the many is the essence of the technology of governance and political organization used through much of recorded human history.

In contrast, democratic (and socialist) governance is a promise of self-activation and management of society for the benefit of all its members. At its purest, democracy is majority self-rule. Vincent Ostrom submits that a self-governing free society is governed by an elaborate structure of institutional arrangements that conform to two basic rules. The first is the basic golden rule: ‘Do unto others as you would have others do unto you’. Under this rule, humans takes the perspective of others, discount partialities associated with self-love, and strive for impartiality. The second rule is W.R. Ashby’s ‘law of requisite variety’: To realized specified effects, there must exist as much variety in the strategies available as there is variety in the conditions that obtain.

The historical experience so far reveals that the problem of democratic governance is accentuated by the phenomenon of ‘substitutionism’, disguised as representation—a malady denounced by Rousseau in his Social Contract. This seems to be unavoidable given the size of modern societies. In a democracy, the people are supposed to be sovereign and they appoint their representatives as ‘public servants’. The age-old question of who will guard the guardians recurs repeatedly. How can the ‘servant’ be made accountable for its actions and decisions to the sovereign principal? What can prevent or alleviate the effects of an agent’s action which is detrimental to the principal’s interests? So far the institutional (meaning nonviolent) means available to principals for checking their agents are freely-contested elections and mechanisms for recall or impeachment of treasonous, incompetent, or corrupt public officials. However, problems of the authenticity of electoral exercises as well as the politicization of the recall/impeachment processes reduces control over agents.


In the early twenty-first century, the twin and related developments of globalization and the new information-communications technology (ICT) revolution are the two most powerful factors that shape and will continue to determine the parameters within which contemporary nation-states—big or small, strong or weak, developed or developing—will operate. They likewise have the strong potential of transforming governance in the Philippines—from the public to the private sector and from the national down to the grassroots levels. Likewise, these forces will also affect the continued viability of the Philippine nation-state project, one that is yet to be completed.

In public and academic discourse, globalization has taken on narrow and broad meanings. Its narrower meaning is economic integration at the global level. It is associated with capitalism, capitalism’s logic being that of expansion and accumulation. Globalization has also been identified with the growth of political interdependence at the world level, the erosion of local space and time, and the homogenization of social life especially at the elite level through universal standards, products, and culture.

Technology is understood as the use of scientific knowledge to indicate ways of doing things in a reproducible manner (BELL 1976). Included among the information and communications technologies are the converging sets of technologies in microelectronics, computing (hardware and software), tele-communications/broadcasting, and opto-electronics (SAXBY 1990; MULGAN 1991). Other observers add, to the list, genetic engineering and its growing list of applications and developments (HALL 1987; MARX 1989; CASTELLS 1996) because genetic engineering is focused on “decoding, manipulation, and eventual reprogramming of information codes” of living matter and because biology, electronics, and informatics seem to be converging and interacting in their applications, materials and conceptual approaches (CASTELLS 1996: 30; K. KELLY 1995). What characterizes the current technological revolution is not so much the centrality of information “but the application of such knowledge and information to knowledge generation and information processing/communication devices, in a cumulative feedback loop between innovation and the uses of innovation” (CASTELLS 1996: 32).

Globalization and the ICT revolution are inter-related processes; they in fact feed on each other. It has been acknowledged that globalization is not a new phenomenon as it is associated with capitalism. However, it is quite clear that contemporary globalization is distinct from past globalization in so far as the pace of flows (especially in the capital markets) is concerned. The immensely accelerated pace of contemporary capital flows were made possible largely through advances in ICT. Progress in ICT also enhanced the C3 (communication-coordination-control) capabilities of multinational organizations (especially transnational business firms) such that post-Fordist arrangements (such as internationalized production, sub-contracting, niche production and marketing) can be undertaken leading to greater global economic integration in the process.

Because of the two’s inter-relatedness, one is forced to coin a new albeit awkward term to represent their summation, interaction, and synthesis: globalICaTion.

Both inter-related phenomena reshape, distort, displace, dissimulate time and space, parameters that are key to governance and nation-states. Some observers have made radical but one-sided claims: OHMAE (1995) argued that globalization will send the nation-state to the museum of antiquities while NEGROPONTE (1995: 6) expected “the nation-state to evaporate” under the influence of the new technologies. It will be argued in this article that globalization and ICT will exert enabling, disabling, and transformative effects on governance and nation-statehood. The ultimate purpose is to identify these various phenomena as far as the Philippines is concerned and to elaborate on some of the key trends that may configure the Philippine political economy in the early 21st century. The second broad objective will NOT be a stab at futurology but rather, ala CASTELLS (1998: 352), “an attempt to bring a dynamic, prospective dimension to a previous synthesis of findings and hypotheses.”

The State and Globalization

It was with the modern nation-state that politics became territorialized. In pre-modern Europe, political authority and sovereignty were shared by a wide variety of secular and religious personages and institutions—king, prince, pope, bishop, merchant guilds, and the like. The modern state project sought to replace these overlapping and often conflicting jurisdictions through a centralized state apparatus and the entire exercise was legitimized by the doctrine of state sovereignty which claimed that the government of any state had supreme authority over the people, resources and all other ‘authorities’ within the territory it controls (AXTMANN and GRANT 2000). In recent years, the phenomenon of globalization, with its consequent adulteration of space and territory, and its impact on the state is a hotly debated topic among academics and politicians alike.

Two strands in contemporary literature stand out on the question of globalization and the modern nation-state. The earlier strand asserted that globalization has reduced the potency of the nation-state, i.e., that non-state, sub-national, and transnational actors have dethroned the nation-state as the primary actor in the international arena. Supposedly, there is pressure for a “relocation of authority” both supra-nationally and sub-nationally (ROSENAU 1997a). These developments supposedly carry the risk of national disintegration for, at least, some societies especially those racked with ethnic rivalries and boundary disputes (KENNEDY 1993). A more extreme view relegated the nation-state to the museum of antiquities (OHMAE 1995). This view has a noble lineage: capital mobility was seen by writers from Adam Smith, David Hume and Montesquieu as a powerful antidote to bad princes. In this situation, the authority of the sovereign state is being undermined by the pressures of de-territorialization. The territorial bounded ness of the state is undercut by the globalization dynamique. The global economy supposedly evades the control of any single state, even the most powerful or wealthiest one. New information and communications technology make it extremely difficult for governments to control the flow of information. Extra-territorial global forces both invade and evade the political space of the modern state and have the effect of altering or diluting political allegiances. For one, notice how Islamic fundamentalism has caused the growth of the Abu Sayyaf in Southern Philippines.

A more recent thread argues for the continued relevance of nation-states, though states must develop new capacities, in response to globalization. It has been noted that while some state functions such as macroeconomic management, immigration control or cultural policy are more difficult to implement under globalization, others may in fact be more effectively conducted. International issue regimes on criminal investigation and deportation, mutual defense, customs and taxation harmonization, and statistical cooperation mean that individual states can be more effective (P. KELLY 1999; MANN 1997; WEISS 1997).

Capital mobility and the changed nature of on-the-cutting-edge products (being more a bundle of ideas rather than a package of tangible or material inputs) make property rights even more important today than ever before. This is so because knowledge products are more susceptible to copying or replication making the enforcement of property rights over these same products even more difficult what with the open and replicative nature of contemporary technologies. Consequently, the key area of property rights enforcement and protection is the realm of intellectual products, e.g., software, movies, books, songs, etc., a popular song-swapper on the Internet, is a case in point. The Recording Industry Association of America (RIIA) asked the federal courts in the US to shut down the Internet site that it charged with “massive copyright infringement.” At the time, Napster already has 22 million users who use the site to download, for free, music files (in the MP3 format). Thus, even with international issue-area regimes in place (such as the GATT-Uruguay Round Treaty with its TRIPS, TRIMS, etc), nation-states are still tasked with the enforcement and protection of these same rights (EVANS 1997).

Other observers have similarly argued that actors in the global economy need a public agency, i.e., the state, that can regulate the business environment even with respect to old-fashioned products, and that economic actors are necessarily embedded in national economic systems:

Calculable trade rules, settled and internationally common property rights, and exchange-rate stability are a level of elementary security that companies need to plan ahead and, therefore, a condition of continued investment and growth . . . Companies may want free trade and common regimes of trade standards, but they can only have them if states work together to achieve common international regulation . . .. Companies benefit from being enmeshed in networks of relations with central and local governments, with trade associations, with organized labour, with specifically national systems of skill formation and labour motivation. These networks provide information, they are a means to co-operation and co-ordination between firms to secure common objectives, and they help make the business environment less uncertain and stable—a national economic system provides forms of reassurance to firms against shocks and the risks of the international economy (HIRST and THOMPSON 1995: 425-7).

The tendency of globalization to produce losers and winners (and therefore cause polarization within and between nation-states) enhances the need for states to act as mediator and conciliator (CHANG and ROWTHORN 1995). A number of observers have been disturbed by the uncanny correlation between increased economic openness and increasing global inequality in recent times. Accordingly, the income share of the bottom 60% of the world’s population has fallen by more than 40% between 1965 and 1990 (from 9.27% to 5.27%), while the share of the top 20% rose from under 70% to over 83% with the trend accelerating at the end of the period just as globalization accelerated (CHANG and EVANS 2000; STEWART 1999, UNCTAD 1997; KORZENIEWICZ and MORAN 1997). The inability of self-regulating markets to produce socially acceptable outcomes has given rise to the so-called “Polanyi problem.” In his work on the rise of national markets, Karl Polanyi argued that free markets, with its inequitable outcomes, generated a natural “protective” response on the part of a variety of adversely affected social groups, including fractions of the elite (POLANYI 1944). The rise of the Keynesian welfare state in most of the developed economies after World War II appeared to have mitigated the Polanyi problem but has led to the enlargement of state (RODRIK 1997; 1998). The apparent inability to regulate the international markets in contemporary times created social dislocations (as those generated by the Asian financial crisis) that are seemingly beyond the ability of states and domestic political processes to resolve and call for the construction of new international institutions (CHANG and EVANS 2000). Of course, states are called upon anew to build these new global institutions.

Furthermore, integration into the global economic community is quite costly. It has been calculated that it would cost a typical developing country US$150 million to implement requirements under the World Trade Organization (WTO) agreements on customs valuation, sanitary and phyto-sanitary measures (SPS), and intellectual property rights (TRIPs) (FINGER 1999).

The effects of globalization on the modern state, more particularly the Philippine state needs extensive empirical analysis. We cannot immediately say, without detailed argument, that globalization will of necessity weaken the Philippine state, even as the latter is already a weak one, and undermines its political capacity.

A synthesis of the literature reveals the key political challenge posed by globalization for nation-states: while globalization may diminish state authority and capacity in some areas, it has simultaneously offered new opportunities and new burdens on states. However, these opportunities can only be exploited by those who are nimble enough to do so. The new burdens imposed meanwhile require new capabilities on the part of nation-states. Where states are weak or have uneven capacities, the challenges become more formidable.

The strong link between growth of government and economic openness, at least in the West, has been demonstrated. The explanation appears to be that government spending plays a risk-reducing role in economies exposed to a significant amount of external risk. International economic integration, as it increases societies’ exposure to external risk, consequently intensifies domestic demands for social insurance through national government programs. But globalization also reduces the financial ability of governments to respond to these pressures since capital mobility reduces tax bases. There is danger that as globalization proceeds apace, the domestic social consensus (forged by increased government spending) required to maintain openness may erode to the point where a return to protectionism becomes a serious possibility. This observation was made in connection with the open economies of the West (RODRIK 1997; 1998).

The problem gets compounded in societies like the Philippines where the social consensus for openness to the global economy is either weak or non-existent. A rough estimate of the Filipino public’s response to globalization may be represented by results of a September 1999 survey of public opinion on possible changes in the Philippine Constitution. To avoid the suspicion that plans to amend the charter are motivated principally by self-serving motives (such as the lifting or extension of term limits for the President and other elective officials), the Estrada administration initiated in mid-1999 an amendment drive called Constitutional Correction for Development (or CONCORD). The said plan intends to limit changes to the economic provisions of the charter with the objective of making it more attuned to the challenges of globalization.

Concretely, the Estrada plan intends to amend the charter by lifting the prohibitions on ownership of land by foreigners and 100% foreign ownership of public utilities, mass media, and other strategic industries.

While the September 1999 survey of Pulse Asia indicate that most Filipinos were against amending the Constitution in general, it was precisely the economic amendments proposed by President Estrada that Filipinos found most unacceptable. While 77% of the survey respondents were against extending the term limits of elected national and local officials, a heftier 92% did not want foreigners to own land in the country. In addition, 88% did not want foreigners to own public utilities or mass media companies while 81% registered opposition to a proposal allowing foreigners to own retail companies in the country. The profile of the respondents tends to suggest that these opinions are held strongly by the poorer sectors of society. Majority (at 64%) of the survey respondents rated themselves as poor/very poor, with nearly half of the total (45%) saying their quality of life in the last year deteriorated rather than improved (19%).

The attitude against alien ownership of land appears to be common across income classes. Of the 6% of the survey respondents who rated themselves very poor, 94% were not in favor; 92% of those who rated themselves poor (57% of the respondents) agreed with them. The 7%, who rated themselves well off or wealthy, were of the same opinion. Strong differences in opinion among the income classes are more pronounced with respect to foreign ownership of media and retail companies. While 93% (83%) of the very poor did not approve of foreign ownership of media firms (foreign ownership of retail companies), only 84% (66%) of the wealthy had the same opinion.

The need for domestic social conflict resolution is highlighted by recent research that show that internal conflicts can help explain why growth rates could not be sustained and why so many countries have experienced a growth collapse after the mid-1970s. Conflicts interact with external shocks on the one hand, and the domestic institutions of conflict management on the other. Economic evidence show that countries which sustained the sharpest declines after 1975 were those with divided societies (as measured by indicators of inequality such as Gini ratios, ethnic fragmentation, and the like) and with weak institutions of conflict management, as proxied by indicators of the quality of government institutions, rule of law, democratic rights, and social safety nets (RODRIK 1998-NBER 6350).

Capital mobility itself can lead to a distributive conflict even as it enhances efficiencies. Just as free trade in goods, there is no guarantee that capital mobility makes everyone better off. Consequently, capital mobility may be politically unsustainable (RODRIK and VAN YPERSELE 1999).

With respect to capital mobility, there appears to be an emerging consensus in favor of some form of capital controls—a shift prompted by Malaysia’s successful one-year experiment. This shift was announced by no less than recently resigned World Bank chief economist Joseph Stiglitz (“A Paradigm Shift,” CHIKIAMCO 1999).

Market reforms associated with globalization may not always reduce rent-seeking opportunities. It may in fact reproduce incentives for rent-seeking behavior even in the presence of comprehensive liberalization. Recent Latin American experience shows that distributional coalitions (of the Mancur Olson type) may proliferate when the state withdraws from the economy, not only when it intervenes (SCHAMIS 1999). Russia’s experience shows how premature price liberalization without prior or accompanying de-monopolization simply shifted the flow of monopoly rents from the state to private monopolists. The Philippine experience (with Ramos’ telecommunications policy) saw the emergence of duo-polies (or tripolies) with the service area concept.

Even if one accepts that the components of the so-called “Washington Consensus” can help spur growth in developing countries, new research demonstrate that it is “groups of policies” (combination of policies) that are more critical for growth. States in developing countries supposedly must ensure policy complementarity, the adoption and implementation of a set of mutually reinforcing policies that create an environment that is conducive to investment and growth. Progress along a multi-faceted set of policy dimensions is supposedly more critical especially as the world economy becomes more globalized. This suggests that sequencing of reforms may lead to less optimal outcomes (AZIZ and WESCOTT 1997). The growing list of necessary capabilities that developing countries must acquire in order to grow has led NAIM (1999) to quip that the lack of these same capacities was the problem in the first place. The need to achieve progress on a broad reform front poses great political and technical difficulties for the many weak states in the developing world. For one, reformers sequence reforms to try to stagger the political battles they will have to wage against special interest groups. Others believe that one has to go after “low-lying fruits” first in order to notch early victories, gain confidence and broaden the social consensus for reform. Policy complementarity may be most especially difficult in democracies, which are by nature breeding grounds for inconsistent policies (COMMANDER and GILLICK 1988).

Globalization and Governance

Governance entails the design, construction, and maintenance of mechanisms to reach collective decisions and to enforce agreed-upon bargains within human communities. The Commission on Global Governance defines it as “the sum of the many ways individuals and institutions, public and private, manage their common affairs. It is a continuing process through which conflicting or diverse interests may be accommodated and cooperative action may be taken.” Nation-states are a particular type of governance structure but they are not the only form. Governance is not merely government. For all intents and purposes, a diverse range of organizations, families and clans, firms, guilds, trade unions, lobby groups, political parties, international non-governmental organizations, empires—are all governance structures since they ‘speak’ and act as a singular entity, facilitate group decision-making, foster cooperation, and enforce compliance with group norms and rules. In short, they govern their members and represent them in interactions with others. Thus, governance occurs in many arenas and in many forms.

Nonetheless, governance structures at the nation-state level appear to be most important as they enable and enhance operation of other governance structures, sub- and supra-national. Within a given national jurisdiction, the co-existence of a well-functioning state and a vigorous civil society characterized by robust crosscutting ties (the linkages between diverse social groups) produce social and economic well-being. Thus under conditions of good governance, the functioning state complements the functions of civil society groups. The functioning state provides the environment that encourages the productive work and cooperation among private social actors. Where states are dysfunctional, private social groups become substitutes for the state. People struggle to survive in the context of disorder, or try to cope in an economically stagnant situation to earn a livelihood (NARAYAN 1999). When states are dysfunctional or when they collapse, they lose the ability to fulfill three basic functions:

1. As a sovereign authority (the accepted source of identity and the arena of politics);
2. As an institution (a tangible organization for decision making and an intangible source of identity); and
3. As the guarantor of the security of a population within a given territory (ZARTMAN 1995).

In the international context, even if treaties create global governance mechanisms on key issue areas like trade, environmental protection, and the like, the implementation of these treaties still rest on the state-signatories.

In the 1970s, the Trilateral Commission worried about a “crisis of governability” as social unrest spread throughout the industrialized countries. At the time, the concern was that the evident breakdown in state-society relations threatened the ability of governments to respond effectively to the emerging economic and technological challenges of the phenomenon we now know as globalization.

Today, analysts worry about a crisis of governance. Under the press of globalization, political authority is seen as draining away from states, and is supposedly moving in three different direction:

• Upwards to supranational organizations like the European Union;
• Downwards to sub-national units—regions, provinces, and municipalities; and
• Sideways to private actors assuming hitherto public responsibilities such as multinational firms and non-governmental organizations (NGOs).

Globalization and Economic Reform in the Philippine Context

Various Philippine governments, including the late Marcos regime (late 1970s up to 1985) have made commitments to economic and structural reform to international multi-lateral financial institutions. These commitments were without fail responses to balance of payments crises, which required mediation of international financial institutions (IFIs) such as the International Monetary Fund (IMF) and the World Bank to keep the flow of foreign exchange going. The essence of these commitments was a rejection of an inward-looking protectionist policy regime and a choice for active engagement in the global economy.

If globalization is primarily understood as economic integration, then the extent to which the Philippines is integrated within the global economy could be measured. The World Bank has formulated an index of integration consisting of four components: the share of trade to gross domestic product (GDP); the ratio of foreign direct investment (FDI) to GDP; the ratio of manufactured goods to total exports; and a creditworthiness rating as determined by the Institutional Investor magazine (World Bank 1996). Even if one uses only one of these measures, the share of total trade to GDP, it is quite clear that the Philippine economy has been steadily integrated into the international economy since the 1980s.

In 1985, for instance, the Philippines had the lowest trade-GDP ratio (at 31.4%) in a group of six Southeast Asian economies, which includes Indonesia (36.3%), Thailand (39.5%), Vietnam (48.9 %), Malaysia (83.7%), and Singapore (269%). By 1996, the Philippine ratio (65.3%) bested that of Indonesia (41.9%), was comparable to Thailand (67.2%), but was still lower than Vietnam (82%), Malaysia (149.8%), and Singapore (281.1%) (SOESASTRO 1998).

Two kinds of adjustments to globalization had been identified by SOESASTRO (1998). First-order adjustments involve the process of opening up the society (and the economy) to forces of globalization and these include changes in the domestic economy through liberalization, marketization, deregulation, and privatization. On the other hand, second-order adjustments entail coping with domestic changes that come as a consequence of opening up. In the wake of the Asian financial crisis, the concern is whether government and society can make the adjustments necessary to alleviate, overcome, or minimize the negative impacts of the first-order adjustment efforts. These domestic social and political impacts of globalization, and the subsequent responses by government (in the form of policy and programs) and civil society, constitute second-order adjustments in the globalization process.

In the Philippines (and Thailand), civil society is more developed and active than in other ASEAN societies. Among ASEAN members, the articulation of political and social challenges to globalization (particularly its negative aspects or impacts) is probably strongest in the Philippines. While by and large, there is acceptance that globalization requires market-friendly reforms, many individuals and groups are concerned that globalization can result in displacement and marginalization of the poor in economic, social, and political terms, and that the burdens of adjustment are inordinately shouldered by the poor. Given its rather unique (compared to its ASEAN neighbors) political history, the Philippines exhibit the greatest concern within the region that globalization must not be subversive of democratization and popular empowerment and participation (GOCHOCO-BAUTISTA 1998).

As globalization was accelerated over the past decade by the end of the Cold War and the breathtaking advances in information technology, the implementation of these commitments got facilitated during the post-Marcos regimes with substantial breakthroughs achieved by the government of President Fidel V. Ramos. Elite consensus was achieved on key aspects of the economic reform package as evidenced by the relatively easy ratification of the General Agreement on Trade and Tariff-Uruguay Round Treaty in the Philippine Senate and its acceptance even by hitherto protectionist economic interests and groups. In the Philippine context, the government’s accession to the GATT Treaty in 1994 represented the first time that the term ‘globalization’ entered the political lexicon.

The elite consensus behind marketization and further integration into the world economy is not shared by several sectors of Philippine society. From the late 1970s up to the mid-1980s, opposition to so-called International Monetary Fund (IMF)-inspired economic austerity cum structural adjustment packages was fundamentally tied to the overall democratic struggle against the Marcos dictatorship. The basic critique was that these programs were “anti-poor,” “anti-people,” and that they provided much-needed financial support to an oppressive regime.

The advent of democracy in 1986 changed the tenor of the opposition to market reform. For one, it provided additional opportunities for opposition given relative freedom of information and expression. The strength of the opposition was manifested by a general strike against oil price hikes in August 1987, an occasion exploited by military rebels to mount the first serious coup attempt against the government of President Corazon Aquino. Any reform of an existing trade and economic regime will produce winners and losers within the short- and medium-run. For that matter, trade and economic reform had always been a tan¬gle of technical and political considerations. Why is this so? As early as the 13th century, Machiavelli observed “the reformer has ene¬mies in all those who profit by the old order and only luke¬warm defenders in all those who would profit from the new order.” It is easy to see why groups (labor, businessmen involved in “sunset” sectors, etc.) that will lose from trade and economic reform will lobby their governments to restrict trade and protect their incomes. However, those who would gain from the re¬form will not lobby equally strongly on the other side. Trade economists (e.g. KRUGMAN and OBSTFELD 1988) have long recognized that those who gain from economic reform and trade in any particular product are a much less concentrated, informed, and organized group than those who lose. This means that the per capita benefits of trade and economic reform are grossly outweighed by the per capita costs. For instance, the consumer beneficiaries of trade liberalization of sugar products would run to millions and are often unorganized while domestic sugar producers, who might be adversely affected, are obviously fewer, organized, and have the ability to act collectively and make political contributions to help thwart or adulterate trade policy.

Indeed, questions about the allocation of the social and political costs of economic reform have generated bitter argument within both international development circles and within countries struggling with economic adjustment since the 1980s. A number of observers (ROOT 1996, PRZEWORSKI 1992, and DAHL 1992) draw our attention to the attendant problems of market reform. These problems could be grouped into two: political support and state capacity.

Political support for structural adjustment programs in the 1980s was sorely lacking all over the developing world. They entailed sacrifices from social groups not generally included in the negotiations. During adjustment, countries that suffer severe income inequality often experienced political polarization. Adjustment programs became contestable on charges of intensifying perceived inequalities. Notwithstanding their intrinsic technical merit, market reforms will be opposed when some groups realize that they will benefit or suffer more than others. Good policies indeed matter but gaining a consensus for reform is a political question. Gloria Macapagal-Arroyo was the most enthusiastic champion for GATT-Uruguay Round treaty during the 1994 Senate debates. Is it correct to read her topping the 1995 senatorial by-elections, her election as vice president in May 1998 as a strong popular consensus, or her coalition’s victory during the May 2001 senatorial elections as a clear mandate for free trade and economic liberalization? How about her contested mandate from the May 2004 elections?

Equity therefore is a major consideration in assessing the political feasibility of market reform. NELSON (1992) points out that two distinct equity issues have emerged from out of the economic adjustment and reform processes in the developing world during the 1980s. The first, driven by humanitarian considerations, focused on reducing the impact of adjustment on the very poor, most of which are rural folk. In most cases, the pressures from external institutions played an important role. The second was largely defined by domestic political pressures, and focused less on the very poor than on the semi-poor and the urban working classes.

These two equity issues pose different political dilemmas. In the first case, while there are very weak domestic political incentives to assist the very poor (who are also relatively powerless and atomized), there were considerable international pressures on their behalf that have developed since the late 1980s, when economic adjustment sought to have a “human face” (pace CORNIA, JOLLY and STEWART 1987). While external agencies provided financial support for pro-poor programs in many countries, most of these programs had been defeated by opposition from the more vocal political sectors who stood to lose by the reforms.

The second issue seems to be a greater problem in the Philippines and the rest of the developing world. In contrast to the very poor in the rural areas, urban working and “popular” classes are more organized and politically active and can pressure reforming governments through a variety of weapons–from the general strike up to the ballot box and ‘people power’.

Given the above discussion, any reforming government has to weigh the social and political costs of reform. In the Philippines, opposition to economic and trade reform had traditionally emanated from oligopolistic business interests, farm interests and organized labor. However, oligopolistic business had displayed greater political sophistication since the downfall of Marcos in 1986. Realizing that multilateral funds were necessary to resuscitate the Philippine economy and secure the post-Marcos political regime, they paid lip service to economic reform to secure these funds and fought rear-guard skirmishes and battles since then. In fact, they made use of their positions in the Aquino government to perpetuate protectionist tariff barriers and block other anti-monopoly measures.

Curiously, these monopolists then found “strange” tactical allies in organized labor, peasants, and other leftist forces in the country. Apart from a perception that these measures were being foisted by imperialist agencies, the less powerful classes are also aware that they usually bear the costs of economic adjustment. For instance, the import liberalization program of President Aquino spared the “white-line” appliance industry identified with her trade secretary while certain agricultural sectors (e.g., cotton, sunflower seeds, etc.) were liberalized.

The tactical alliance may seem curious to a technical analyst who would argue that the lower classes (who are also consumers) will benefit in the long run from freer trade even if they may suffer short-run losses especially if they are employed in inefficient industries. The same alliance is intelligible, however, to ROBINSON (1962) who earlier quipped that the invisible hand of the market will always do its work, but it may work by strangulation. In addition, the visible hand of oligarchic interests and rent seekers will inflict further damage to lower class interests.

To dissipate local opposition to the Uruguay Round Treaty, the Philippine Senate cobbled up a multi-billion-peso ‘safety net’ package especially directed to peasant and rural beneficiaries. In general, a reforming government may have to buy off opposition through such “bribes”.  However, its difficulties are compounded if it is in a financial bind and under an IMF-prescribed austerity program which calls for reduction of public deficits, among others. The question here involves the funding of these “reform-buying” efforts. The scramble for government funds will obviously have political implications for any reforming regime.

Fundamentalists would argue that the provision of so-called safety nets is contrary to the logic of the market. The technical objective of market reform, they argue, is precisely to eliminate non-competitive firms, industries, and sectors. These observers believe that the provision of safety nets will simply inject new life into these moribund sectors. Others believe that technical considerations should be tempered by political imperatives especially in a country with a substantial peasant and small grower population as well as a burgeoning service (formal and informal) sector.

But this brings us back to the financing problem. Some have suggested that multi-lateral agencies such as the International Monetary Fund and the World Bank, pushing for trade and market reforms in the developing economies, should likewise provide funds for safety net packages. But this track may have to depend a great deal on the improvement of the capacity of many government bureaucracies to prevent the diversion of these resources to rent seeking orgiasts.

It is quite clear that market reform entails massive overhaul of state capacities in the developing world. The “orthodox paradox” stipulates that while reform calls for less intervention of the state in the economy, it requires the same state to initiate and sustain these same changes. The absence of state capacity is, in my opinion, a more important reason why economic reform could fail. Even when political support exists, it can ensure the successful implementation of reform. In situations where the bureaucracy is known to be corrupt or inept, the adoption of market reforms will not instantly transform it into an honest and competent one. A democratic state’s dismal capacity to administer reform will also feed to its political vulnerability. Capacity, politics, and equity considerations are in fact intertwined. The inability of the bureaucracy to successfully fend off demands for continued preferential treatment for powerful vested interests will only fuel charges that reforms benefit some groups at the expense of others.

As it is, economic and trade reform will be a politically and socially contentious process because not everybody gains both in the short and long hauls. Furthermore, more powerful interests who cannot stanch the reform process may manage to pass on the costs to less powerful and marginalized social sectors and groups. This is the usual complaint raised by populist critics with economic reform programs. A government committed both to popular empowerment and economic reform must therefore find ways through which the burdens of reform may be born equitably.

On the other hand, the advent of democracy and the initial results of economic reform have both resulted in diverse responses from the popular opposition. While a section continues its outright opposition to the incumbent regime, other sections have adjusted to market reform and have “constructively engaged” government to make the reform process a humane, pro-poor one. Other considerations include extracting a commitment from government in favor of sustainable development and gender-equity. These sections of the popular movements skillfully used international initiatives on environment, development, population, human rights, and gender (from Rio in 1992 to Beijing in 1995 and beyond) to obtain these governmental commitments.

What needs to be done?

The demand for good governance at the nation-state level is universal. The more relevant and interesting question is a question of supply: where or how do strong states develop?

If one considers the history of Western Europe where the nation-state was born, international war was the cruel crucible. Centuries of warfare forced the nascent Western European states to steadily build their capacities to penetrate and extract resources from their societies and to coordinate variegated functions and programs. The test of statehood was war; weak and incompetent states usually sustained military defeats and debacles. More recent examples indicate that war, even if of the “cold” kind, continue to be the forgers of strong states. Taiwan and South Korea built strong states, with the help of the United States, as they competed with their communist alter egos.

In principle, the Philippines rejects war as an instrument of national policy. In lieu of this option, our leaders has chosen the neo-liberal solution, or closer integration into the global economy, as the way to bring about good governance and a strong state. The international capital market will supposedly impose disciplinary strictures on local political and economic actors, public and private. This view has a noble lineage: classical writers like Smith, Hume, and Montesquieu saw capital mobility as a powerful antidote to bad princes. Where mobile capital goes will be depend on the quality and competitiveness of immobile factors of a particular location. These immobile factors include the hard ones—land, roads and bridges, information and communications systems, and the like; and the soft ones such as law enforcement, contract enforcement, property rights protection, and public service delivery systems—governance in short.

The burden of attracting mobile capital falls squarely on the immobile factors of a country. From the viewpoint of international capital, the ultimate competitiveness of each location depends upon the attractiveness of the package of immobile factors it offers. Previously, competition for mobile capital among and within developing economies have largely taken the form of providing more attractive hard immobile factors as well as investment incentives such as tax credits and strike-free industrial estates. More recently, the greater salience of governance had been recognized.

How could governance at the state level be improved? A general prescription is to reduce the state’s intervention in the economy. The argument here is that the over-reaching state will consequently be an incompetent one since its grasp will fall short of its reach. If the state reduces the scope of its activities, its competence will improve. The retreat of the state from direct intervention and involvement in the economy in turn requires new governance and regulatory capacities. Where markets do not exist or where markets do exist but are unfree, state action is needed either to help create markets, to free existing ones, and to maintain the freedom of existing ones.. This is the so-called “orthodox paradox” of market reform. The “orthodox paradox” stipulates that while market reform calls for less intervention of the state in the economy, it requires the same state to initiate and sustain these changes. While there is debate about the state’s “limited agenda,” there is consensus on three basic items:

 The state should stay clear of areas where markets can function properly;
 The state, should, at best, regulate in areas where market failures are endemic (as with prudential rules for banks where moral hazard is eminent) rather than acquire ownership;
 The state should improve its performance in the Smithian agenda (FABELLA 1999).

Retreating from the overreaching agenda of the past is the political challenge confronting the Philippine state. Alongside this necessary retreat is the need to change the prevailing culture of entitlements. As far as the Philippine state is concerned, it is both a case for retreat and advance. In many cases and levels, state action is sorely lacking. In this sense, the state is a weak and soft one. In instances where the state is overbearing, this is usually when and where the intervention is in favor of vested interests.

Reverting to a minimalist agenda is not problem-free. Several questions need to be answered. From where will the impetus to dismantle the overreaching soft state come from? From the state leaders and bureaucrats themselves (even if they benefit from the state’s softness)? From the rent-seeking special interest groups? From the general public who also benefit from the transgression of rules via the contagion effect?

All these questions are derivatives of the more fundamental questions: where do good institutions come from? How are they built and how are they sustained? A number of the greatest minds tried answering these questions, including the participants of the 1999 conference on second-generation reforms organized by the International Monetary Fund (IMF). In an article appropriately titled, RODRIK (1999b) noted that the choice lay between importing wholesale a “blueprint” from the more advanced countries and relying on the expertise of technocrats and foreign advisors or relying on hands-on experience, local knowledge, and experimentation. The local knowledge approach relies on mechanisms for eliciting and aggregating local information. The most reliable forms of such mechanisms, according to Rodrik, are participatory political institutions since democracy helps build better institutions for achieving prosperous societies. In a follow-on paper, he argued that democratic regimes are associated with significantly lower levels of aggregate economic instability since democracies have a greater propensity than non-democracies to moderate social conflict and induce compromise (RODRIK 2000a).

The Harvard economist also cautioned us that institutional change is costly and requires the expenditure of scarce human resources, administrative capabilities and political capital (RODRIK 2000b). The priorities implied by integration into the global economy will, arguably, not always coincide with those of a more fully developmental national agenda. Consider some illustrative tradeoffs:

• Education. What should the government priorities be in its education budget? Should it train more bank auditors and accountants, even if it means fewer elementary and secondary school teachers?
• Corruption. How should government focus its anti-corruption strategy? Should it target the “grand” corruption that foreign investors complain about, or the petty corruption that affects the average person the most?
• Legal reform. Should the government focus its energies on “importing” legal codes and standards, or on improving existing domestic legal institutions? Reforming the existing legal system for the benefit of foreign and domestic investors might be a better strategy in the long run.
• Public health. Should the government pursue tough policies on compulsory licensing and/or parallel importation of basic medicines (to make low-cost drugs available to the poor), even if that means running afoul of existing World Trade Organization (WTO) rules?
• Industrial strategy. Should the government simply open up and let the chips drop wherever they might, or emulate East Asian experience of industrial policies through export subsidies, directed credit, and selective protection?
• Social protection and safety nets. How much can the government afford to spend on social protection and safety programs in view of financial constraints imposed by market “discipline”?

One of the usual laments about under-developed societies in general, and the Philippines, in particular, is that there is supposedly “too much politics” and that therefore, the road ahead would be better if politics were reduced. SHEPSLE (1999), a noted political scientist, warned against naïve prescriptions which call for the creation of institutions that are depoliticized, that is, purged of politics, such as those contained in the World Bank-produced World Development Report 1997. Politics may be a problem but it must be part of the solution since institutions are inherently political and therefore those engaged in the design of appropriate institutions and social reform must “take politicians and political motivations as a fixture and try to design institutional arrangements in light of these, not despite them.” (SHEPSLE 1999, 2) In the end, Shepsle sees hope in the competition between uber-officials and unter-officials, between older and younger politicians, where ambition is pitted against ambition. Older uber-officials with shorter time-horizons will discount the future heavily and may be partial to present consumption (or predatory behavior, if you will). The future welfare of his people will thus depend on his altruism (or the lack of). On the other hand, younger unter-officials have greater valuations of the future and may therefore prefer investments to current consumption for future growth. To the extent that uber-officials need the cooperation of unter-officials to implement policy or changes in policy, then the latter can temper the excesses of the former. All these arguments are made in appreciation of the fact that successful economic development requires sacrifices in the short-term for long-term gain.

However, politicians of whatever age, as a rule, have short time horizons. While some of them may genuinely desire prosperity and equity for the people, most of them are mainly concerned with their personal interests and advancement. Uber-officials want to remain as such while unter-officials want to become uber-officials. Furthermore, the pressures and demands exerted on them by their constituents and patrons are for gratification in the short-run. Should we pine for monumental changes in the behavior of our political leaders and our citizens? Or should we design solutions in due recognition of the fact that most men, officials and citizens, are ambitious and self-interested. Thus, the solution is not “political will” nor “impeccable non-corrupt behavior” because if these were available there would not be a problem in the first place. Enlightenment and incorruptibility are in short supply and properly designed institutions may serve as substitutes.

We have already alluded to one source of hope and change. The difference in age and valuations among politicians, even as they are as a rule with short time horizons, will lead the rising ambitious set to oppose actions by the current incumbents to run down the privileges, authority, and capital assets associated with the higher offices to which they aspire. Shepsle also notes that even if all politicians were predatory, the presence of organizations with longer lives and therefore, longer time horizons, which represent interests to whom politicians are beholden for their political survival—political parties, labor unions, corporations, churches and religious organizations, etc.—will also serve as countervailing powers. The most important implication of this analytical line is that non-state actors, which normally have longer-time horizons than politicians, must be thoroughly integrated into a society’s political life. In this sense, therefore, Shepsle’s institutional preferences are compatible with those of Rodrik even as they are no more than a general principle rather than a well worked-out or fully operational plan. This is where local learning and experimentation will come in.

ICT, Governance and the Nation-State’s Future

A Human Development Report released by the United Nations Development Programme (UNDP) observed that while the digital revolution offered mankind great opportunities at learning, enhancing productivity, and improving governance, it also could help perpetuate the divide between the rich and the poor both within and across societies. This time the divide is between the “connected” and the “unplugged,” the digital “haves” and “have-nots,” the latter being those who are, for one reason or the other, unable to join the digital revolution and are not on the information superhighway. An article published by the Philippine Daily Inquirer reveals the dimensions of the digital divide :

• Only one of 20 people around the world are online and close to 60% of Internet users live in North America even if it accounts for only 5% of the world’s population.
• In Africa, there are a mere 14 million phone lines, fewer than in Manhattan or Tokyo.
• In India, despite its celebrated emergence as a software and IT powerhouse (with Bangalore as its own “Silicon Valley”), nearly a quarter of a million villages lack even a single telephone.
• In the US itself, there are yawning IT gaps with 60% more white households being online than African-American households and senior citizens account for only 16% of the cyber-community.

The digital revolution has at its core, networked data-production technologies, of which the Internet (or the WWW) is the most publicly visible form, is transforming the world upside down as they achieve critical mass in many societies around the world.

As networks become pervasive, they are reshaping the way people live, communicate and work. The technological changes that are transforming the business world (e-commerce, e-biz, B2B, B2C, etc.) and civil society will also revolutionize the way government operates and the very nature of public life in the near future. In its wake, the digital revolution will remake the two distinct yet intertwined relationships between people and their governments: the one between the government and the citizen as “customer” or “consumer” of public goods and services, and the other between government and the citizen as “owner” or “shareholder”. These transformations will be most likely felt in democratic polities all over the world where citizens are formally recognized as stakeholders of the polity.

The widespread adoption of information and communications technologies (ICT) is beneficial to democracy. Before the unfolding of the ICT revolution, democratic governance had to deal with tremendous transaction costs. The citizen must know in order to be able to consume available public goods. But acquiring this knowledge is costly. In order to provide the appropriate public services, governments, like a private business firm, must likewise know what citizens need and/or demand. Acquisition of such knowledge by government is equally costly. Furthermore, for the citizens as a whole to exercise their power and privileges as principals over the government (their agent or their representative), they must likewise know what their agent is doing. The antidote to Michels’ iron law oligarchy will surely include knowledge in the amounts far exceeding current levels that citizens have of what their governments are doing. With the digital revolution, the costs of producing, acquiring, transmitting, transforming information/knowledge has been dramatically reduced. This happens as the reach and speed of ICT increase exponentially and as the tools become more robust.

For all governments and governance structures, the digital changes have brought pressure to bear on through these issue areas:

Fiscal and performance issues. Governments the world over face continued pressure to reduce the costs of operations and control public borrowing and deficits. Citizens want improved public service; not simply better service but service delivered with increasingly flexibility and efficiency, and without their having to pay an extra premium for it. These issues intersect with technology because, increasingly, taxpayers and end-users know that many governments lag behind private business badly when it comes to providing convenience, accessibility, and efficiency. In the Philippines, for instance, the weather bureau has to rely on private mass media outfits to announce typhoon signals accurately and promptly.

The emergence of digital citizens. These same performance issues are felt keenly by the growing number of digital citizens. Computer access is now an everyday reality for millions of people and the reach of digital technologies grows daily. While computer access is not yet that widespread in the Philippines, the emergence of the wireless Internet promises to make access to information more widespread. The country has already earned the reputation of being the Short Messaging Service (SMS, more popularly known as text) capital of the world. And with the on-going convergence of communications technologies (such that one can use his mobile phone to send and receive e-mail or view TV broadcasts), then the country will most likely go whole-hog digital limited only by individual budget constraints.

New technologies are creating new networks. As ICT converge and as bandwidths increase, governments face not only tremendous new possibilities of informing and serving their constituents but are also challenged seriously to keep up. Most governments, including the Philippine national government and the LGUs still face an even bigger hurdle: their lack of resources required to acquire and implement complex and robust technologies. Alongside the IT revolution, globalization has created new competitive pressures on governments: jurisdictions are now measured for their compatibility with firms and actors who have digital savvy. Citizens now (or will) have the information that allows them to compare their government against any other in the world on virtually any score.

In summary, the digital age spawns transformation at all levels of governance:

• Democracy—from representative to participatory;
• Citizens—from passive consumers to active partners;
• Politics—from broadcast, mass, polarized to one-on-one;
• States—from national, mono-cultural to global, local, virtual, multi-cultural

In short, the digital revolution posed both rich opportunities and serious challenges to democratic governance. For a poor society like the Philippines, the digital revolution may help exacerbate the socio-political divide. Or it could be harnessed to deepen democratic politics, increase equity, and enhance empowerment. The socio-political challenge is to prevent the ICT revolution from exacerbating disparities between and within societies, when millions are still without running water and electricity, not to mention phone lines and computers.

If the historic brouhaha about the “I Love You” virus is instructive in any way, it is that the perverse episode may be indicative of the Philippines’ strong potential in the new ‘Digital Economy’. While the country ranked consistently low in competitiveness based on traditional economy indicators (lower than most Southeast Asian countries including Thailand and barely ahead of Indonesia), a new index based on New Economy indicators showed the Philippines as the world’s most competitive in one of 5 categories. The country was ranked No. 1 worldwide in the category of knowledge jobs, followed next by Australia, US, Canada and France, with India, a presumed competitor, way behind. The indicators for the category of “knowledge jobs” included qualified engineers, availability of IT skills, availability of senior management, and higher educational enrollment. In the other four New Economy indicators—technological innovation, economic dynamism, degree of transformation to a digital economy, and globalization—the Philippines scored no higher than 26 in any of the four categories (CRUZ 2000).

The ICT revolution poses serious challenges to national sovereignty and offers new opportunities for improving governance at all levels in the Philippines. As mentioned earlier, capital mobility and the changed nature of on-the-cutting-edge products (being more a bundle of ideas rather than a package of tangible or material inputs) make property rights even more important today than ever before. This is so because knowledge products are more susceptible to copying or replication making the enforcement of property rights over these same products even more difficult what with the open and replicative nature of contemporary IC technologies. The essential nature of these technologies, i.e., digitization or the conversion of data into bit streams consisting of number strings, is a vast improvement over previous copying technologies in that no diminution in quality is observed no matter how many copies are made.

In addition, the horizontal character of the contemporary IC infrastructure enables anyone with access to the network to be author/producer/distributor, etc. with the minimum of effort and capital resources. Consequently, the key area of property rights enforcement and protection is the realm of intellectual products, e.g., software, movies, books, songs, etc.
ICT makes it difficult for nation-states to regulate content and usage of the cyberworld. The Internet is undoubtedly an international and global phenomenon. As observed by FROOMKIN (1996), Net users are largely indifferent to the physical location of their interlocutors as long as they understand each other and connection is established rather rapidly. To the extent that cyber-transactions are instantaneous or to the Net enables long-term relationships, its multinational character makes it possible for users to engage in regulatory arbitrage defined as choosing “to evade disliked domestic regulations by communicating/transacting under regulatory regimes with different rules. Sometimes this will mean gravitating to jurisdictions with more lenient rules, or perhaps no rules at all; sometimes it will mean choosing more stringent foreign regimes (e.g., those with strong consumer protection laws), where stricter rules are more congenial” (FROOMKIN 1996, 13).

ICT offers opportunities in improving governance, especially in the provision of public goods and services to citizen-consumers. As mentioned earlier, the ICT revolution has theoretically and in practice reduced the cost of acquiring information. For this reason, if harnessed properly, it can help improve governance. Information is a crucial good and input in the governance process. Citizens need to know what public goods and services are provided by government and other public agents. Governments and other public agents, on the other hand, require adequate and timely data about citizens’ needs. Government agencies need to transmit and collect data from each other, either horizontally or vertically—for them to be able to better fulfill their function of public good provision.

ICT systems themselves can deliver the public good or service. A great number of the services that the public needs from government comes in the form of licenses, certificates, permits, etc—form documents—the issuance of which could be facilitated by ICT systems. For example, the computerization of the issuance of residence certificates at the Quezon City Hall as well as of birth certificates at the National Census and Statistics Office (NCSO) could be cited.

A number of observers argued that the expanding use of the new ICT can produce a qualitatively different political system in the future. For instance, DAHL (1989: 339) believed that telecommunications technologies have a key role in making possible the “advanced democratic country,” where policy is firmly anchored in the demos’ judgements. In the Internet, ETZIONI (1993) sees the possibility of an advancement in the public sphere through “teledemocracy” while GROSSMAN (1995) and BROWNING (1996) argued that a third great epoch of democracy is arriving through technology.

In theory, ICT could facilitate democratic processes, such as elections, plebiscites, and legislation as well as help combat corruption in government contracting through electronic procurement and bidding systems. ICT systems could facilitate the holding of elections and plebiscites. As long as the integrity of these systems are safeguarded and are not compromised, election results could be reported promptly; this promptness could pre-empt electoral fraud which, is common in Philippine electoral politics. These systems could also reduce the cost of holding plebiscites so that political leaders could receive periodic and timely feedback from citizens on key political and social issues.