Politics and Economics of Land Reform in the Philippines: a survey∗ By Nobuhiko Fuwa Chiba University, 648 Matsudo, Matsudo-City, Chiba, 271-8510 Japan
[email protected] Phone/Fax: 81-47-308-8932 May, 2000 ∗ A background paper prepared for a World Bank Study, Dynamism of Rural Sector Growth: Policy Lessons from East Asian Countries. The author acknowledges helpful comments by Arsenio Balisacan. Introduction Recent developments in both theoretical and empirical economics literature have demonstrated many aspects of the negative socio-economic consequences of high inequality in the distribution of wealth. High inequality tends to hinder subsequent economic growth (e. g., Persson and Tabellini 1994?), inhibits the poor from realizing their full potential in economic activities and human development through credit constraints (e. g., Deininger and Squire 1998), encourage rent-seeking activities (e. g., Rodrik 1996), and seriously hinder the poverty reduction impact of economic growth (e. g., Ravallion and Dutt ??). The Philippines is a classic example of an economy suffering from all of these consequences. The Philippines has long been known for its high inequality in distribution of wealth and income; unlike many of its Asian neighbors characterized by relatively less inequality by international standards, the Philippine economy has often been compared to Latin American countries which are characterized by high inequality in land distribution. Partly due to its historically high inequality there has long been intermittent incidence of peasant unrest and rural insurgencies in the Philippines. As a result, the issue of land reform (or ‘agrarian reform’ as more commonly called in the Philippines, of which land reform constitutes the major part) has continuously been on political agenda at least since the early part of the 20th century; nevertheless land reform in the Philippines has been, and still is, an unfinished business.