DEMOCRACY AND INCLUSIVE GROWTH

An Empirical Analysis of Political Dynasties in the 15th Philippine Congress

Ronald U. Mendoza, PhD AIM Policy Center http://Policy.aim.edu
*Support from Konrad Adenauer Foundation and the AIM-Scientific Research Foundation is gratefully acknowledged. The views expressed in this presentation are those of the authors and do not necessarily reflect the views and policies of the Asian Institute of Management, AIM-SRF and KAS. This presentation is based on Mendoza, Beja, Venida and Yap (2011). An Empirical Analysis of Political Dynasties in the 15th Philippine Congress. Asian Institute of Management Policy Center Research Paper.

Voices of the Politicians

There are some politicians who wish there were more poor people. The poor are the bailiwick because [] if you are a moneyed politician, its better to have poor people because you can buy them. Give them P200, P300 in the elections and they will vote for you. [A politician interviewed and cited by Clarke and Sison (2003:221). Im just vice mayor but you know I have an average of twenty to thirty people every day in [my] house, in [my] office, asking for support. I have no money and they need money. Even if its P100, Im spending P2000 a day. Its good I have other businesses, if not youll be forced to steal money from the government to give to the poor []. [] Once youre a government official, people think you are a rich person, that you can get money from the government. Thats not trueMy salary is only P21,000 [per month]. [A local politician interviewed and cited by Clarke and Sison (2003:221).

Motivation
In theory, democracies promote political participation and political equality equal voice in government decisionmakingthrough various principles such as one person one vote, equality before the law and equal rights of free speech. Political equality, in turn, could promote stronger responsiveness and accountability in addressing the needs of the majority of the citizenry, and in many cases contribute to improved human capital and other investments. With political responsiveness, accountability and social spending/investments, poverty and inequality reduction as well as higher and more inclusive growth could ensue. However, underdeveloped democratic institutions could also be associated with weak political participation, leading in some cases to the phenomenon of political dynasties. How are political dynasties linked to the countrys prospects for inclusive growth (i.e. high growth accompanied by poverty and inequality reduction)?

Political Dynasties and Poverty/Inequality

Empirical link between political dynasties and poverty/inequality: PREDATORY VIEW: Dynasties increase P/I -- If dynasties are associated with rentseeking and state capture, corruption and ineffective and poorly designed policies (e.g. Proudhomme, 1995; Hutchcroft and Rocamora, 2003) STATIONARY BANDIT: Dynasties reduce P/I -- If dynasties have longer runways for reform and are more firmly associated with socio-economic outcomes (e.g. Olson, 2003; Solon et al, 2009; Dal Bo and Rossi, 2009) Additional complexity: PATRONAGE: High P/I tends to increase dynastic prevalence: the poor vote for dynasties as long as these are able to directly provide support during elections or in times of income shocks (e.g. Coronel, 1998; Manacsa and Tan, 2005) SELF-PERPETUATION: Politicians are capable of developing dynasties): being in public office affords politicians the opportunity and means to keep on winning or to increase their heirs chances of winning (e.g. Dal Bo et al, 2009; Querrubin 2010)

Trend in US Legislators with Relatives in Previous Congresses (Dynastic Legislators)

11% in early 1800s 7% in 1966

Source: Dal bo et al (2009).

Clarification and Improvement of Dynasty Definitions

Dynasty1: The share of legislators in the 15th Congress with kinship links to at least one legislator from the 12th, 13th or 14th Congress; Dynasty2: The share of legislators in the 15th Congress with kinship links to at least one legislator from the 12th, 13th or 14th Congress, or at least one local government official elected in 2001, 2004, or 2007; Dynasty3: The share of legislators in the 15th Congress with kinship links to at least one legislator in the 12th, 13th,14th or 15th Congress, or at least one local government official elected in 2001, 2004, 2007 or 2010. Dynasty*: The share of legislators in the 15th Congress with kinship links to at least one legislator from the 12th, 13th, or 14th Congresses, and at least one legislator from the 15th Congress, and at least one local government official elected in 2001, 2004, or 2007, and at least one local government official elected in 2010.

Dynastic and Non-Dynastic District Legislators by Definition (Total number and percent share)
Dynasty1 Dynastic Dynasty2 Dynasty3 Dynasty*

84 (36.7% 144 (62.9% 155 (67.7% 10 (4.4% of of of of Legislators Legislators Legislators Legislators

Rough Comparison of the Share of Dynastic Politicians in Selected Parliaments and Congresses
United States Argentina Japan Mexico Philippines (Dynasty1) Philippines (Dynasty2) Philippines (Dynasty3)
0% 10% 20% 30% 40% 50% 60% 6%

10%

33%

40%

37%

63%

68%

70%

80%

Sources: United States (Dal Bo, Dal Bo and Snyder, 2009); Argentina (Rossi, 2009); Japan and Mexico (Asako and others, 2010); Philippines (Authors calculations).

Share of Dynastic Politicians in the Philippine Congress over Time: Preliminary snapshot
90

82
80

73 68

70

60

50
50 40

30

20

10

0 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Sources: PCIJ as cited in Clarke and Sison (2003) and authors calculations based on data from the Philippine Congress.

A Snapshot of One Political Dynasty

Spouse Sibling Cousin PBM (Provincial Board Member)

Note: Incumbent positions are in brackets.

Are dynastic legislators mostly male?

Legislators Dynasty1 Dynasty2 Dynasty3 Dynasty*

Female

50

21 (42.0% 32 (64.0% 36 (72.0% 3 (6.0% of of Female of Female of Female Female Legislators) Legislators) Legislators) Legislators)

Male

179

63 (35.2% 112 (62.6% 119 (66.5% 7 (3.9% of of Male of Male Male of Male Legislators) Legislators) Legislators) Legislators)

Do dynasties dominate political parties?

Legislators LAKASKAMPI 76 Dynasty1
38 (50.0% of LAKASKAMPI Legislators) 18 (24.0% of LP Legislators) 17 (50.0% of NPC Legislators) 7 (33.3% of NP Legislators)

Dynasty2
53 (69.7% of LAKASKAMPI Legislators) 40 (53.3% of LP Legislators) 24 (70.6% of NPC Legislators) 17 (81.0% of NP Legislators)

Dynasty3
58 (76.3% of LAKASKAMPI Legislators) 43 (57.3% of LP Legislators) 25 (73.5% of NPC Legislators) 17 (81.0% of NP Legislators)

Dynasty*
7 (9.21% of LAKASKAMPI Legislators) 1 (1.33% of LP Legislators)

Liberal Party

75

NPC

34

Nacionalista Party

21

1 (4.76% of NP Legislators)

Dynasty 3
LAKAS KAMPI LP

24% 76%

Non-Dynastic Dynastic

43% 57%

Non-Dynastic Dynastic

NPC

Nacionalista

26% 74%

Non-Dynastic Dynastic

19%
Non-Dynastic

81%

Dynastic

Are dynastic legislators older?

Legislators 26-40 39 Dynasty1
18 (46% of Age 26-40 Legislators) 34 (35% of Age 41-55 Legislators 21 (31% of Age 56-70 Legislators 11 (44% of Age 70+ Legislators

Dynasty2
29 (74% of Age 26-40 Legislators) 60 (61% of Age 41-55 Legislators 37 (55% of Age 56-70 Legislators 18 (72% of Age 70+ Legislators

Dynasty3
30 (77% of Age 26-40 Legislators) 63 (64% of Age 41-55 Legislators 41 (61% of Age 56-70 Legislators 21 (84% of Age 70+ Legislators

Dynasty*
4 (10% of Age 26-40 Legislators) 3 (3% of Age 41-55 Legislators 2 (3% of Age 56-70 Legislators 1 (4% of Age 70+ Legislators

41-55

98

56-70

67

70+

25

Dynasty 3
26-40 41-55

23% 77%

Non-Dynastic Dynastic

36% 64%

Non-Dynastic Dynastic

56-70

70+

39% 61%

16%
Non-Dynastic Dynastic Non-Dynastic Dynastic

84%

Do dynasties tend to be located in jurisdictions with lower average per capita income?

Non-Dynastic Dynastic Mean Difference Test Statistic and P-Value

Average Standard Deviation PhP26,872.38 PhP7,486.73 PhP23,275.43 PhP6,358.38 -PhP3,596.95 -3.565 (0.0003)*** ---

Note: Provincial 1997 Prices p-values are in parentheses, * significant at 0.1, ** significant at 0.05, *** significant at 0.01

Are dynastic legislators richer?

Net Worth Net Worth (sans MP) PhP 52M PhP 42M PhP9,857,260 0.7671 (0.2236)

Dynasty Non-Dynasty Mean Difference Test Statistic and P-Value

PhP 52M PhP 57M -PhP4,900,547 -0.2525 (0.4013)

Note: Both averages reflect a vacant seat for the 1st District of Ilocos Sur.. p-values are in parentheses, * significant at 0.1, ** significant at 0.05, *** significant at 0.01

Do dynasties tend to be located in jurisdictions with higher poverty?

Poverty Incidence Dynastic Non-Dynastic Mean Difference Test Statistic and P-Value Poverty Gap Poverty Severity

24.15% 18.95% 5.2pp 2.606 (0.0039)***

6.18% 4.93% 1.25pp 2.107 (0.0174)**

2.31 1.86 0.45 1.794 (0.0367)**

Note: p-values are in parentheses, * significant at 0.1, ** significant at 0.05, *** significant at 0.01

Do dynasties tend to enjoy higher margins of victory?

Dynasty1 Definition Dynastic Non-Dynastic Mean Difference Test Statistic Dynasty2 Definition Dynasty3 Definition

36.43pp 28.49pp 7.94pp 2.3477 (0.0094)***

33.34pp 28.23pp 5.11pp 1.5068 (0.0655)*

33.26pp 27.64pp 5.62pp 1.6602 (0.0485)**

Definition: If winning candidate received A votes and 2nd place candidate received B votes; and the total number of votes cast is C , then the margin of victory is A/C minus B/C. Margin of victory is expressed as the difference in percentage points (pp). Note: p-values are in parentheses, * significant at 0.1, ** significant at 0.05, *** significant at 0.01

Preliminary Snapshot of Correlations Dynasty3 by Per Capita Income

Controls Population Employment Poverty Incidence Pop-Emp Pop-Pov Emp-Pov Pop-Emp-Pov Per Capita Income (1997 Prices) (-)0.297 (0.004)*** (-)0.331 (0.001)*** (-)0.248 (0.016)** (-)0.309 (0.003)*** (-)0.246 (0.018)** (-)0.259 (0.013)** (-)0.259 (0.013)**

Note: p-values are in parentheses, * significant at 0.1, ** significant at 0.05, *** significant at 0.01

Preliminary Snapshot of Correlations Dynasty3 by Poverty/Inequality

Controls Population Employment PCI Pop-Emp Pop-PCI Emp-PCI Pop-Emp-PCI Poverty Incidence 0.179 (0.086)* 0.217 (0.037)** (-)0.56 (0.595) 0.181 (0.084)* (-)0.050 (0.633) (-)0.039 (0.710) (-) 0.051 (0.629) Provincial GINI (-)0.099 (0.345) (-)0.077 (0.461) (-)0.012 (0.909) (-)0.099 (0.347) (-)0.007 (0.946) (-)0.010 (0.928) (-)0.018 (0.868)

Note: p-values are in parentheses, * significant at 0.1, ** significant at 0.05, *** significant at 0.01

Selected References
Asako, Y., T.Iida, T.Matsubayashi and M.Ueda. 2010. Dynastic legislators: Theory and evidence from Japan. Mimeo. [Available at: http://www.psci.unt.edu/~tmatsubayashi/research/seshu.pdf]. Balisacan, A. and N.Fuwa.2004. Going beyond cross-country averages:Inequality and poverty reduction in the Philippines. Mimeo. South East Asian Regional Center for Graduate Study and Research in Agriculture and UP Diliman. Balisacan, A. and E.Pernia. 2002. Going beyond cross-country averages: Growth, inequality and poverty reduction in the Philippines. World Development 32(11)1891-907. Clarke,G. and M.Sison. 2003. Voices from the top of the pile: Elite perceptions of poverty and the poor in the Philippines. Development and Change 34(2):215-242. Coronel, S. 1998. Pork and Other Perks: Corruption and Governance in the Philippines. Pasig: Philippine Center for Investigative Journalism. Dal Bo, E., P.Dal Bo and J.Snyder. 2009. "Political Dynasties." Review of Economic Studies 76(1):115-142. Dal Bo, E. and M.Rossi. 2009. Term Length and Political Performance. NBER Working Paper 14511. Cambridge, Mass. Hutchcroft,P. and J.Rocamora.2003. Strong demands and weak institutions: The origins and evolution of the democractic deficit in the Philippines. Journal of East Asian Studies 3(2003):259-292. Manacsa, R. and A.Tan. 2005. Manufacturing Parties. Party Politics 11(6):748-765. Rodrik, D. 2007. One Economics Many Recipes: Globalization, Institutions and Economic Growth. Princeton: Princeton University Press. Querrubin, P. 2010a. Family and Politics: Dynastic Persistence in the Philippines. Mimeo. Massachusetts Institute of Technology. Querrubin, P. 2010b. Political Reform and Elite Persistence: Term Limits and Political Dynasties in the Philippines. Mimeo. Massachusetts Institute of Technology. Rossi, M. 2009. The Causes of Political Dynasties in Democratic Countries. Mimeo. [Available at: economia.uniandes.edu.co/content/.../29957/.../Political_Dynasties_Rossi.pdf]. Solon, O.,R.Fabella,and J.Capuno. 2009. Is local development good politics? Local development expenditures and the re-election of governors in the Philippines in the 1990s. Asian Journal of Political Science 17(3):265-284.

Democracy and Inclusive Growth

ADDITIONAL SLIDES

Studies Examining Links across Dynasties and Human Capital Accumulation, Economic Growth and Poverty/Inequality
Solon, O.,R.Fabella,and J.Capuno. 2009. Is local development good politics? Local development expenditures and the re-election of governors in the Philippines in the 1990s. Asian Journal of Political Science 17(3):265-284. Study of Philippine Governors elected in 1992,1995 and 1998; finds that incumbent governors improve their re-election chances with higher spending on economic development services Balisacan and Fuwa (2004). Going beyond cross-country averages: Growth, inequality and poverty reduction in the Philippines. World Development 32(11)1891-907. Study of growth and poverty reduction in the Philippines between 1988 and 1997, using province-level data, controlling for contextual factors including a measure for political dynasties; finds that dynasty variable is a significant determinant of mean expenditure growth, but not the rate of poverty reduction; dynasty variable is negatively linked to subsequent income growth

Studies finding evidence of dynastic self-perpetuation

Dynasties in the Japanese Diet: Asako, Y., T.Iida, T.Matsubayashi and M.Ueda. 2010. Dynastic legislators: Theory and evidence from Japan. Mimeo. Bank of Japan, Waseda University and University of Texas. Dynasties in the Argentine Congress: Rossi, M. 2009. The Causes of Political Dynasties in Democratic Countries. Mimeo. Dynasties in the Philippine Congress: Querrubin, P. 2010. Family and politics: Dynastic persistence in the Philippines. Mimeo. Massachusetts Institute of Technology. Dynasties in the US Congress: Dal Bo, et al (2009). "Political Dynasties." Review of Economic Studies 76(1):115-142.

EMPIRICAL REGRESSION MODEL OF THE CHARACTERISTICS AND POSSIBLE DRIVERS OF DYNASTIES Dynasty = F [Legislators characteristics; Jurisdiction's characteristics; Political Party Affiliation] Age: Are younger lawmakers less dynastic? Gender: Further to the previous point, are dynasties part of an "old boys club" and older style of politics? Net Worth: Are dynasties richer? Term: Are longer terms associated with legislators that belong to dynasties? City: Are dynasties less prevalent in cities, where the institutions of democracy (i.e. schools, NGOs, more free flow of ideas, info, people) might tend to be stronger?

Enrollment: Are dynasties less prevalent where access to education is stronger? Intergovernmental allocations: Are dynasties associated with higher (effective) allocations? Alternatively, are dynasties making more or less use of their allocations? (Do dynasties "bring home the bacon"?) Political Parties: Are dynasties associated with the older more established parties? Are the smaller parties and independents less associated with dynasties? Poverty: Are dynasties associated with jurisdictions with higher poverty (suggesting patronage politics)? Real GDP Per Capita: Are dynasties associated with lower average real incomes?