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The Philippine economic mystery


  • Robert H. Nelson

    (School of Public Policy, University of Maryland, USA)


The poor economic performance of the Philippines over the long term is a puzzle and an apparent anomaly for the region. The decline in the Philippines' global position from the first part of the 20th century is particularly striking when viewed against the backrdrop of rapid income gains in countries of East and Southeast Asia, countries the Philippines used to surpass in terms of physical and human capital. While there have been a number of attempts to explain the puzzle—difficult geography, macroeconomic policy failures, and corruption—none are completely convincing either because there are counterexamples or the factors cited are endogenous and derivative. On the other hand, the long-term economic record of the Philippines is strikingly similar to those of some Latin American countries, such as Argentina, Mexico, and Peru. This paper advances the hypothesis that the political and economic experience in the Philippines stands in closer proximity to those of countries in Latin America than in Southeast Asia, and that this is rooted in their deep similarity of histories and cultures. In particular, the common Spanish and Catholic colonial history may have given rise to cultural attitudes that now stand in the way of freer markets and a more successful political democracy.

Suggested Citation

  • Robert H. Nelson, 2007. "The Philippine economic mystery," Philippine Review of Economics, University of the Philippines School of Economics and Philippine Economic Society, vol. 44(1), pages 1-32, June.
  • Handle: RePEc:phs:prejrn:v:44:y:2007:i:1:p:1-32

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    Cited by:

    1. Dooyeon Cho & Antonio Doblas-Madrid, 2013. "Business Cycle Accounting East and West: Asian Finance and the Investment Wedge," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 16(4), pages 724-744, October.
    2. Michael R. Cabalfin & Josef T. Yap, 2008. "Sustainable Development Framework for Local Governance," Governance Working Papers 22619, East Asian Bureau of Economic Research.
    3. Eunju Kim & Jayoung Yoo, 2015. "Conditional Cash Transfer in the Philippines: How to Overcome Institutional Constraints for Implementing Social Protection," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 2(1), pages 75-89, January.

    More about this item


    Philippines; economic development; institutions; Catholic church;

    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East


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