From the review and critique of the book Why Nations Fail of Acemoglu and Robinson, among the Nobel laureates (together with Simon Johnson) of 2024, that appeared in the last six articles, we can conclude that the Philippine failure to attain high-income status over the last twenty to thirty years can only partially be explained by the extractive vs. inclusive institutions theory.  We shall now take a look at a more comprehensive view of the very complex society that the Philippines has in order to get a more complete understanding of the obstacles to Philippine economic development, other than the lack of the appropriate inclusive institutions, whether political or economic.  We shall consider the other theories presented in the book that were rejected by the authors as possible explanations of Philippine underdevelopment, but which can be considered at least as partial minor or even major handicaps to economic progress defined as both economic growth and a more equitable distribution of income (if not of wealth).  We need this more comprehensive explanation of our failure as a guide to the present Administration and future ones on the continuing reforms and solutions to obstacles on our way to becoming a First World country, hopefully during the decade 2040 to 2050.

            Acemoglu and Robinson themselves presented some of these inadequate explanatory causes of failure.  There is the “geographical determinism” theory of authors like Montesquieu, Jeffey Sachs and biologist Jared Diamond.  According to Montesquieu, people in the tropics tend to be lazy and logically lack inquisitiveness.  People in the Euroasian continent are more likely to develop strong immune systems.  According to Jeffrey Sachs, who was one of my economics professors at Harvard in the 1960s, people in the tropics are more prone to debilitating diseases like malaria and other sicknesses which adversely affect human productivity.  To make matters worse, tropical soil does not allow for productive agriculture.  All these handicaps are worsened further by the effects of climate change.  It is well known that the Philippines is the most vulnerable country in the world to natural disasters like typhoons and volcanic eruptions.  The conclusion of the geographical determinists is that countries with temperate climate have a relative advantage over tropical and semi-tropical areas to attain First World status.

            Although it is true that geography may present some serious obstacles to economic growth, the recent economic success stories of tropical countries like Singapore, Malaysia, Thailand and more recently Vietnam have shown that obstacles posed by geography are surmountable.  For example,  I am personally a witness to the manner malaria was practically eliminated from the Philippines by modern medicine and health practices (the eradication of mosquitoes in the forests) because  my late father, Dr. Jose A. Villegas, was one of those health officers during the American occupation period and in the earlier years of our political independence who were the protagonists in the fight against malaria.  The same can be said about how malaria was practically eradicated in such highly forested territories like Malaysia, Indonesia, Thailand and Vietnam.

            The biggest handicap posed by our geography is our being an Archipelago with more than 7,000 islands.  Countries like Thailand and Vietnam found it relatively easier to endow their small farmers with the necessary infrastructures (e.g. farm-to-market roads, irrigation systems and post-harvest facilities) because of their large and contiguous land masses.  These two also had the great advantage of having almost unlimited water because their ocean-like rivers facilitated the provision of irrigation facilities to especially their rice farmers.  In contrast, scarcity of water characterizes countries which are Archipelagic.  Thus, we should have never aspired to be self-sufficient in rice.  We never had a real chance to compete with the cost competitiveness of Thailand and Vietnam in producing rice, a very water-dependent crop.  In fact, this policy error is an example of a cause of economic backwardness which is not due to extractive political or economic institutions but can be attributed to ignorance, a third possible explanatory factor for economic backwardness, in addition to geography and culture.  Another example of a policy error due to ignorance was the Filipino First policy (analogous to the Make America Great Again—MAGA--of U.S. President-elect Donald Trump) that did so much damage to our economy.

            Another minor explanatory variable for economic backwardness is culture.  Acemoglu and Robinson summarily dismissed culture as an important cause of failure by referring to, among other examples, the two Koreas, South and North.  Until the late 1940s, these two Koreas shared a common geography and culture.  Today they are worlds apart in terms of institutional and wealth terms.  A more familiar example to us Southeast Asians is the vast difference in economic development between Vietnam, the new ASEAN dragon and its neighboring countries sharing pretty much its Indochinese culture, i.e. Laos and Cambodia whose per capita incomes are anywhere from two thirds to one half that of Vietnam, which recently graduated from low-middle income to high-middle income status, leaving the Philippines behind. 

            There have been a good number of theories about the “damaged culture” of the Philippines as a major explanation of its backwardness.  The most famous of this culture-based criticism of Philippine society was that of American journalist, James Fallow, who wrote an article for The Atlantic Monthly (November 1987) entitled “A Damaged Culture:  A New Philippines?”  The gist of his criticism of our culture is that the vast majority of Filipinos lack the spirit of nationalism.  Our loyalty stops with the extended family.  We have no regard for the common good.  We treat one another badly.  Fallows described the Philippines as “a society that has degenerated into a war of every man against every man.”

            There is a grain of truth in Fallow’s “damaged culture” theory.  A manifestation of this is the extreme difficulty in organizing farmers or workers into cooperatives, in contrast with the ease with which farmers’   cooperatives succeeded in Confucian societies like Taiwan or South Korea.  Another unfortunate trait that smacks of a damaged culture is the tribalism that is evidenced by the existence of political dynasties and the penchant of the masses to elect celebrities like actors, sports heroes or media personalities into the Senate despite their lack of qualifications to promote the common good through enlightened legislation.

            The other side of the coin, however, is the increasing number of People’s Organizations, Nongovernmental Organizations (NGOs) and members of the academe who have demonstrated real concern for the common good by influencing lawmakers and government officials to come out with more enlightened laws and programs in the areas of trade, environmental sustainability, taxation, and foreign investments, among others.  The Philippines stands out among emerging markets in the number of NGOs and POs sponsoring and actually implementing policies and programs for the common good.  I can cite only a limited number:  Go Negosyo, the Makati Business Club and its regional equivalents like the Iloilo Business Club and the Palawan Business Club, the Foundation for Economic Freedom, Philippine Business for Education, the Philippine Business for Social Progress, etc.  Even chambers of commerce and industry that used to work almost exclusively to protect the vested interests of the business sector are taking on poverty alleviation activities as well as programs for the upskilling, reskilling and retooling of workers in the labor force to serve the common good, instead of only their limited respective sectors.

            The active work of civil society, in partnership with the academe and the socially responsible components of the business sector can explain why the question posed by Fallow in the title of his article, “A Damaged Culture:  A New Philippines?” should be answered affirmatively.  Yes, since 1987, the year Fallow’s article appeared, there has arisen a new Philippines consisting of a tripartite collaboration among civil society, the academe and the business sector.  Thanks to this tri-partite initiative, significant reforms have been implemented by our public officials to explain why today the Philippines is no longer the “sick man of Asia,” as attested to by independent assessments of numerous international banks, multilateral organizations like the World Bank and the Asian Development and foreign think tanks.  Today, we read almost everyday these independent institutions heaping praises on the Philippines as one of the fastest growing economies in the Indo-Pacific region, together with India and Vietnam.  The leaders heading these initiatives promoting the common good of Philippine society have demonstrated that whatever damage there is in our culture can be repaired by the right kind of leadership. If the enlightened leadership does not come from the government, as in the case of Singapore, it will be provided by the private sector.   For comments, my email address is bernardo.villegas@uap.asia.