Posts Tagged ‘John Nye’

I know, I know, I know. This blog should have been written and posted four days ago. And I should be blogging on more recent events. But I need to get this particular blog done and ‘out of the way’.

The obvious high point of the fantastic week was Tita Cory’s death, wake, and funeral. I believe I wrote the blog on property rights before my wife Rosalie and I tried to line up at the La Salle Greenhills gymnasium to view her remains. We failed to do so. Monday was the transfer of her remains to the Manila Cathedral. I wanted to join the march but also wanted to attend the second lecture of John Nye at the UP School of Economics. Since I cannot be in two places at the same time, I had to be content with monitoring the march through radio, TV and text messages.

I had classes Tuesday so I couldn’t go the Cathedral. Rosalie couldn’t wait for me so she went with my niece and her friend. They were able to see Tita Cory’s remains at about 4:30am Wednesday morning after lining up for about five hours. While in the queue, those who were filing out of the church warned them that the viewing might be stopped at 4:00 am but could not give any reason why this would be so. They still decided to stay on the line. Soon after, they will learn that the public viewing was temporarily stopped to accommodate GMA.

Wednesday was the internment of her remains so I had to make my move. I drove over to Laloma, left my car at my-in-laws’ place (where Rosalie was monitoring the proceedings at the Cathedral on ABS-CBN), and proceeded to install myself among so many in front of the Manila Hotel at about 10:00 am. I got to see Tita Cory’s remains around 1:00 pm together with the by-now famous honor guard. Noynoy spoke for a few minutes while Mayor Lim and his men tried to instill some order amidst the predominantly celebratory (as in fiesta) atmosphere. The crowd started following the flat-bed truck carrying her remains and I decided to join them. I didn’t know at the time how far I can walk since the last time I joined a march was in 1987—another funeral march for the student leader Lean Alejandro—22 years ago.

The crowd’s energy, together with the wailing of countless fire trucks’ sirens and a huge ocean-going ship’s horn, invigorated me and everybody else to march on. However, the spirit may be willing but the body was not quite up to it. I joined the march from Manila Hotel through Quirino Avenue up to Taft Avenue. My umbrella was broken by the strong winds and my shirt was wet from sweat, rain, and sea spray. I had a meal at about 3 pm at a nearby fast-food joint and proceeded by jeepney back to Laloma where we watched the solemn burial of Tita Cory amidst full military honors.

If the week started and was highlighted by a death and burial of Tita Cory, it ended with another death, this time of a less famous person but still a beloved one. In the afternoon of August, I started receiving a stream of text messages announcing the death of my fraternity brod and comrade Arnel (aka Batman) de Guzman. Arnel is a fascinating character and a compleat human being, obviously not without faults but a beautiful person just the same. He was activist, professor, consultant, writer, and fraternal brother all rolled into one. His activism was broad ranged: from human rights to migrant worker concerns.  Remembering his impishly mischievous grin, we who he left behind chose to celebrate his full life instead of just grieving.  Just like what we did with Tita Cory’s demise.

In between these deaths are the two world class lectures of John Nye of the George Mason University and currently visiting professor at the UP School of Economics. John was supposed to deliver three lectures; the first one was done on July 20 and the second was supposed to have been delivered on July 27. However, John got sick allegedly due to dust in the UP Main Library and the July 27 lecture was delivered on August 3—the day Tita Cory’s remains were transferred to the Manila Cathedral. The third lecture was done on August 7, a day before Arnel’s death.

John’s lectures were on ‘the new institutional economics’ (NIE). I had been reading on the literature ever since I got hooked on the work of Douglass North (on economic performance and time) while on a fellowship in Finland in 1997. However, I cannot claim expertise on the subject. John’s lecture (especially the first and second) gave an extremely useful overview of NIE, which included his own work. John worked with North at the Washington University at St. Louis, Missouri for some 20 years before he transferred to George Mason.

His third lecture was actually a presentation of two new papers. One resurrects the debate between the monetarists and the Keynesians regarding the relative efficacy of monetary easing over fiscal spending to stimulate growth and get economies out of crisis. While arguing for the monetarist case, John criticized the Obama administration’s avowedly Keynesian economic stimulus program for not being Keynesian enough.

His other paper is an exercise in what he calls ‘freak-economics’: an examination of the so-called dragon effect. In the Chinese lunar calendar, the dragon is considered the luckiest animal. Surveying demographic data, John noticed a demographic spike in several countries that adhere to the lunar calendar (Taiwan, Vietnam, South Korea, and Singapore) during the dragon years of 1976, 1988 and 2000. For these countries, birth rates were going down but upticks were observed during the dragon years. Which means that couples, or at the most, mothers, were purposely ‘timing’ pregnancies so their babies will be dragon babies? In John’s book, that means a lot of sacrifice.

Now he wants to know if the sacrifice was worth it. Wouldn’t it be counter-productive to have your baby born in a dragon year? More babies will be born in the same year and they will all be competing for resources, the most important of which would be the best schools. Without boring you with methodological details, John compared Asian and non-Asian immigrants in the United States (those who believed in the dragon effect and those who didn’t). With respect to the 1976 cohort, he found that dragon children had on average had a year’s edge in college education over non-dragon children on top of the fact that Asians were better educated than non-Asians (mostly Latinos).

John fielded questions about the mother effect since he also found that mothers of dragon children were generally older, better educated and richer than non-Asian mothers of children born in the same dragon year. In a typical economist fashion, he said that the best way to eliminate the mother effect is to study at least two siblings—a dragon and a non-dragon and compare their relative performance say in school. John said a study in Vietnam did just that and came up with similar findings. In the end, John jokingly said he will be gainfully employed in the years to come even if he concentrates only on studying the dragon effect.

All in all, the week that was is one of the most memorable and productive weeks I have gone through so far. And I have only begun to scratch the surface. I will soon blog on the visit of the Marcos children at Tita Cory’s wake and relate it to property rights squabbles of Philippine elites. In that blog, I will use the insights of neorealist international relations (IR) theory to help shed light on the possible resolution of such contests.

Last Friday, I attended a symposium entitled ‘Will Elites Allow Reform: Property Rights Issues in the Philippines’ at the UP School of Economics. One of the speakers, Prof. John Nye of the George Mason University, argued that a necessary condition for economic growth is ending the vicious cycle of vindictiveness amongst the elite fractions in the country. He said that if those in power are (deadly) sure of being punished by incoming elites, the latter will cling to power by all means. In the end, these elite struggles will harm the prospects of economic growth.

UP SE dean Noel de Dios invited me to join John and others to dinner after the symposium. On our way to Trinoma, we mulled on the possibility of ending vindictiveness amongst elites and concluded that it was a problem of ‘credible commitment’. Absent a third party enforcer, how will the ‘ins’ be assured that the ‘outs’ will not punish them when the former were the new ‘outs’? Which led us to property rights issues.

The property rights system of the country is a product both of its colonial history and developments over the past few decades. The Spanish colonial state sought to impose property rights regimes that were alien to those previously instituted by the indigenous peoples of the archipelago, which included stewardship, usufruct, and communal ownership. In the process, massive asset theft typical of all colonial ventures occurred in the country. The main object of theft and ownership then was arable land. While resolving the ownership of the so-called ‘friar estates’, the American colonial state also introduced the distinction between public and inalienable land and privately-owned and alienable real estate. This had the further effect of legally disenfranchising indigenous peoples from their land. The 1946-1972 post-colonial state continued these Western-originated property regimes even as the asset structure diversified over time. In general, access to political power guaranteed security of property rights and elites at various levels consolidated their political and economic positions.

Up to the eve of the declaration of martial law in September 1972, the property rights of rival elite factions were generally secure regardless of the political cycle’s outcome. Ownership rights were not extinguished by an electoral loss. The elites were organized into two political parties that alternated in power at the national level. These parties were roughly at par with each other in terms of power and resources. The ability of an elite faction to regain power in the next election deterred the faction in power from erasing the property rights of the ‘outs.’ Elite factions, therefore, were prevented by the possibility of electoral defeat from disrespecting the property rights of their rivals. The default behaviour was for the ‘ins’ to plunder the state treasury and cash in on the ‘economic rents’ created during incumbency instead of confiscating the property of the ‘outs.’ Notwithstanding a constitutional provision for two presidential terms, no president has been able to win re-election until 1969 when Ferdinand Marcos won an unprecedented second term.

The balance of power between the rival elite factions shifted decisively in favour of his faction after Marcos’ unprecedented re-election in 1969. He monopolized political power through the declaration of martial law in September 1972 and proceeded to violate the property rights of his political opponents. The demise of the dictatorship in February 1986 saw the post-Marcos elites attempting a restoration of pre-martial law arrangements with respect to property rights and access to political power. The properties of the anti-Marcos elites (such as the Lopez, Lopa, and Jacinto families) were returned to their former owners while a new constitution adopted in 1987 provided the ground rules for political contestation and all but forestalled the possibility of new dictatorships. After an initial lock-out period, even the Marcoses were allowed back into the country and managed to win electoral posts or stand for elections. Despite the formation of a presidential commission mandated to recover the so-called ill-gotten wealth of the Marcoses and their cronies, these properties got entangled in a quagmire of unresolved law suits filed within and without the country.

The violation of elite property rights by Marcos during the dictatorship’s heyday is like a genie let out of the bottle. Despite all efforts to date, the mess created by the initial massive cancellation of property rights has not been sorted out to satisfaction. The ownership of substantial portions of major Philippine corporations (including the top-ranked San Miguel Corporation and the Philippine Long Distance Telephone Company) remains contested. The fall of the dictatorship also led to the recognition of new asset claimants—the thousands of human rights victims who were tortured or murdered by Marcos’ security forces and the coconut farmers disenfranchised by the so-called coconut levy. The claims of the human rights victims against the Marcos estate had been repeatedly recognized by US courts while the Philippine Supreme Court had frequently ruled that the coconut levy was a public fund and must be taken from the control of businessman Eduardo Cojuangco, who used the money to wrest control of the country’s premier business firm—the San Miguel Corporation (SMC). To date, however, none of these judicial decisions have been enforced since rival claimants have managed to secure restraining orders against them.

The discussion so far indicates that from 1946 to 1972, there was an institutional mechanism that ‘tamed’ the relations between rival elite fractions in the Philippines. We have shown how such a mechanism was shattered by Marcos. We pointed to the difficulty of repairing the ‘property rights mess’ of the martial law period even after the dictatorship’s demise. In my next blog, I will discuss why the cycle of vindictiveness amongst Filipino elites seems to be more intractable during the post-Marcos period. However, I also promise to answer the questions raised by Raul Pangalangan and Rex Ubac re my blog on GMA’s supposedly last SONA. Patience!