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Booty Capitalism: The Politics of Banking in the Philippines. By Paul D. Hutchcroft. Ithaca, New York: Cornell University Press, 1998. pp. 278.
In the 1950s and the 1960s, the Philippines had impressive economic growth coupled with political stability. However, since then, despite the presence of favourable attributes for successful economic development including "tremendous entrepreneurial talents, a well-educated and anglophone workforce, a rich endowment of natural resources, a vibrant community of economists and development specialists, and abundant overseas assistance", the Philippine economy has generally displayed a very dismal economic performance. It registered very low and even negative rates of economic growth particularly during the 1980s when it posted a mere 0.9 per cent average growth rate. What went wrong? This is the central question of Hutchcroft's book. Among the studies which attempt to explain why the Philippine economy has done badly, Professor Gerardo Sicat (a former government minister) commended the Task Force report of some professors at the University of the Philippines School of Economics [UPSE] and cited that it has become a major document, due to thoroughness of its coverage and the depth of the effort at quantifying claims, that has opened some interesting propositions that would in the future be debated.' In their analysis of the Philippine economic crisis, the UPSE report (1984) concluded that:
Different and often competing explanations have been put forward for the occurrence of the country's economic debacle, among which, that (1) it was entirely or primarily due to external circumstances which were affecting all developing countries, and over which the present leadership [Marcos] had no control, (2) it was entirely or primarily due to mismanagement of the [Marcos] regime [which was generally too expansionary in its fiscal and monetary policy, and hence was a complete departure from a more conservative macroeconomic policy during the 1950s and the 1960s], and (3) it was entirely or primarily due to an unforeseen random event which was the [1983] assassination of Aquino [which affected the economy through the following channels: capital flight from the Philippines and waning investors' confidence on the political and economic stability of the Philippines]. While there is some truth to each of these [factors], none of them is a sufficient...