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Capital Flight and the Hollowing Out of the Philippine Economy in the Neoliberal Regime

Author

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  • Beja, Edsel Jr.

Abstract

Capital flight is the movement of capital from a resource-scarce developing country to avoid social controls, and measured as net unrecorded capital outflow. Capital flight from the Philippines was $16 billion in the 1970s, $36 billion in the 1980s, and $43 billion in the 1990s. Indeed these figures are significant amounts of lost resources that could have been utilized in the country to generate additional output and jobs. Capital flight from the Philippines followed a revolving door process – that is, capital inflows were used to finance the capital outflows. This process became more pronounced with financial liberalization in the 1990s. With these results, we argue that capital flight resulted in the hollowing out of the Philippine economy and, more important, neoliberal policies underpinned the process.

Suggested Citation

  • Beja, Edsel Jr., 2006. "Capital Flight and the Hollowing Out of the Philippine Economy in the Neoliberal Regime," MPRA Paper 4830, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:4830
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    File URL: https://mpra.ub.uni-muenchen.de/4830/1/MPRA_paper_4830.pdf
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    References listed on IDEAS

    as
    1. Bowles, Samuel & Gintis, Herbert, 1988. "Contested Exchange: Political Economy and Modern Economic Theory," American Economic Review, American Economic Association, vol. 78(2), pages 145-150, May.
    2. McKinnon, Ronald I. & Pill, Huw, 1998. "International Overborrowing: A Decomposition of Credit and Currency Risks," World Development, Elsevier, vol. 26(7), pages 1267-1282, July.
    3. K.S. Jomo & Ilene Grabel & Gerald Epstein, 2003. "Capital Management Techniques In Developing Countries: An Assessment of Experiences From the 1990s and Lessons for the Future," Working Papers wp56, Political Economy Research Institute, University of Massachusetts at Amherst.
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    Cited by:

    1. Beja, Edsel Jr., 2006. "Forensic Accounting: Hidden balance of payments of the Philippines," MPRA Paper 4828, University Library of Munich, Germany, revised 12 Sep 2007.
    2. Beja Jr., Edsel L., 2007. "Brothers in distress: Revolving capital flows of Indonesia, Malaysia, and Thailand," Journal of Asian Economics, Elsevier, vol. 18(6), pages 904-914, December.
    3. Beja, Jr., Edsel, 2009. "The Philippines on debt row," MPRA Paper 16553, University Library of Munich, Germany.
    4. Beja, Edsel Jr., 2007. "Capital Flight and Economic Performance," MPRA Paper 4885, University Library of Munich, Germany, revised 12 Sep 2007.

    More about this item

    Keywords

    Capital flight; external debt; revolving door; Philippines;

    JEL classification:

    • F20 - International Economics - - International Factor Movements and International Business - - - General
    • B50 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - General

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