Elite Rule and the Resource Curse: Obstacles to Local Development in the Philippines

Spatial socio-economic imbalances represent a major obstacle to development in the Philippines. In the last decades, only a few provinces narrowed the gap to the Philippine average per capita income. Cebu Province in the Central Visayas Region belongs to the “success stories”, as it quickly industrialized after the Marcos era. In contrast, the neighboring province Leyte in Eastern Visayas remained oriented to natural resource extraction causing real income to stagnate. A major reason for this diverging development path can be found in differing local elite structures, which emerged as a result of different historical experiences. The elite in Cebu invested into non-natural resource sectors due to the relative resource scarcity of the island after the province’s opening to the world market at the end of the nineteenth century. This created oligopolistic competition between elite families, as no family could dominate its rivals. This competition forced elites to take more development-friendly decisions to win over the electorate. In Leyte, on the contrary, the resource abundance became a ‘curse’. Competition within the Leyte elite remained low, as a few families enjoyed monopolistic political control over the island during important phases of the twentieth century. This kept the local elite from diversifying its investments into services or industry and cemented a local resource-dependent rent economy.