Governance and Asian development
MARKING FIVE decades of development support in the world’s largest continent, the Asian Development Bank (ADB) last week gathered a small group of Asian scholars to ponder on the past 50 years’ development experience in Asian economies. The Asian development story is as rich as it is diverse, and much can be learned from analyzing the factors that contributed to both successes and failures among the bank’s 48 regional member-economies. Not surprisingly, institutions and governance, as shaped by the varying histories of the Asian nations dominated by a colonial past, figured prominently in the discussions.
In an analysis I did years ago as a visiting fellow at the ADB Institute in Tokyo, I found that over the years, governance indeed had the strongest influence on the inclusiveness of most Asian countries’ economic growth experience. As measure of inclusiveness, I used the poverty elasticity of growth, or the average percentage reduction in poverty incidence that accompanies a 1-percent growth in the gross domestic product (GDP). Quality of governance was measured using the World Bank’s Worldwide Governance Indicators now spanning 19 years, covering six dimensions of governance: Voice and Accountability, Political Stability and Absence of Violence, Government Effectiveness, Regulatory Quality, Rule of Law, and Control of Corruption. Other variables that had weaker effect (at least statistically) on inclusiveness included public expenditures on education, health and housing, and GDP shares of agriculture and manufacturing.
In a panel discussion in the ADB forum, I focused on political history, decentralization, and development planning, which various country presentations identified to have figured prominently in Asian countries’ development experience. A key impact of a country’s political and colonial history is whether or not it had a unifying effect on the people, seen in a general concern for the common good, and a sense of national pride and identity. Thailand and Vietnam are among those that exemplify such a unifying influence from their political pasts. Thais draw pride from never having been colonized by foreigners, and unity under its centuries-old monarchy. Vietnamese take pride in having been the only country that emerged victorious, despite its size, in a war with the world’s strongest country.
In contrast, our own seeming lack of national pride and unity, and concern for the common good may be rooted in the “divide and rule” approach that had been deliberately and effectively used by our Spanish and American colonizers. We ended up prone to an intense regionalism that is reflected even in the associations that expatriate Filipinos form abroad, and cited by federalists as an argument to advance their cause. In turn, our weak sense for the common good finds manifestation in a propensity for corruption, on which we have ranked high over the years.
Countries’ political histories have also shaped their people’s work ethic. In my first visit to Vietnam decades ago, I was impressed at the seeming absence of idleness among ordinary people. In and around Hanoi, I was awestruck at how every single person I saw seemed to be keeping busy, even just cleaning or fixing their premises, if not engaged in their respective occupations. I saw it as a stark contrast to the all-too-common sight of idle istambay almost everywhere in our own country.
Last week, I wrote of how Filipinos now have the dubious distinction of spending the most time on online social networking sites (over 3.5 hours per day vs the world average of 1.77 hours)—to me yet another sign of so much idleness among us. I would at least partly blame this on how our Spanish colonizers imposed forced labor 40 days a year on the native male population, likely contributing to the demeaned status of manual work in the Filipino psyche, and Rizal’s lamented “indolence” of the Filipino. Our seeming greater propensity for easy-money ventures and pyramid scams, and for rent-seeking behavior in business such as bribery and smuggling, might be associated with this flawed work ethic as well.
In apparent recognition of the value of bottom-up development, decentralization efforts have been common in Asia’s political histories, with varying levels of success. Indonesians in the forum perceived it to have been a failure in their country, due supposedly to inadequate attention to the middle level of governance in between the national and local levels. South Korea, on the other hand, saw its Saemaul Undong movement built on community empowerment as having been an effective tool for inclusive development. I consider the Philippine experience with devolution to lie somewhere in between, having fostered in many local government units greater self-reliance and responsiveness to people’s pressing needs, even as sob stories also abound concerning misguided local officials. What is clear is that effective local governance can be a crucial driver of inclusive development.
Finally, there was consensus in the forum that strategic economic and development planning has served economies of the continent well. But it was also agreed that planning with a heavy hand, as practiced in the former Soviet states of Central Asia, is as objectionable as relying entirely on the “invisible hand” of untrammeled free market forces. This middle ground is the kind of development planning traditionally undertaken by our National Economic and Development Authority, for whom the challenge, as it has been elsewhere in Asia, is to ensure faithful implementation of the plans. And this brings us right back to why quality of governance is paramount.
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