The Philippines has long been regarded as a “weak” state1. One common index has been the percentage of GNP collected in taxes. At 10.4% the Philippines ratio is the lowest in Asia and one of the lowest in the Third World. (World Bank, 1987: 39) But the full dimensions of that weakness, and how it affects rural areas, have not been explored.
The reasons for this low state capacity are found deep in Philippine history. There is not time for a careful examination now. Suffice it to say that there was nothing comparable to a “state” in most parts of the Philippines before the colonial period, and even the Spaniards did not establish as strong a state as did other European colonialists in SE Asia, both because of the continued political prominence of the Church and because a particularly noxious form of patrimonialism was introduced in which the governor-general was almost a feudal lord. The Americans contributed to the Philippine problem by the speed with which they transferred the bureaucracy to Filipino hands, hands already deeply enmeshed in patronage politics.
Thus for less than twenty years, early in this century, was there a concerted effort to establish an honest, well-trained, disciplined and well-paid bureaucracy, the necessary core of any strong state. While it is often useful to be able to blame everything on Marcos, in this case he has only a small share of the responsibility. In fact, the only period since independence in which state capacities grew rapidly was the first few years of martial law.
State capacity does, in fact, fluctuate over time, as noted by Skocpol (in Evans, et al, 1985). This may be because of higher or lower levels of state legitimacy, because of a change in relations between state leaders and the dominant class—or certain segments thereof, or because resources from the international system give state leaders new power. Yet long historical tradition seems to set the range of fluctuation within particular societies.
State capacity is neither constant over time, nor across policy issue areas, or in relation to particular targets of policy. Capacity may be higher in educational policy than in land reform, greater when allocating resources than when extracting them. [And with wide emperical support for the neo-Marxist concept of “autonomy”, we recognize that] capacity is higher when enforcing legislation that is contrary to the interests of small peasants than when attempting to coerce unwilling landlords. Autonomy from an undifferentiated “society” is too vague a concept to be meaningful.
We have already alluded to one way in which state capacity is compared quantitatively. The ability to collect revenue certainly counts for something. Yet since some states are blessed with oil wells subject to royalties or some other easily collectible tax, the comparison may not measure only state capacity. Income tax requires a sophisticated administration and is thus more indicative of state capacity than general revenue. Among the four largest ASEAN states, the Philippines, at 8.7%, in 1987 had the smallest percentage of revenue collected in personal income tax. Indonesia reached 12.8% (Asia Yearbook, 1989).
One can also look at the expenditure side to get a sense of the role of the state in the society. Perhaps the most comprehensive figure is “general government consumption” as a percentage of GDP.
|General Government Consumption as Percentage of GDP|
Coercive capabilities are also compared in terms of military expenditure as a percentage of GDP. In 1987 it was only 2.14% for the Philippines, compared to 3.4% for Thailand, 4.5% for Malaysia, and 5.7% for Singapore (Asia Yearbook, 1989). However, since this figure tells one nothing about how the armed forces are used, it is again only a measure of potential, not actual, capacity.
There are also measures of the economy and society that indicate to some degree the effectiveness of government policy, [such as persons per physician. The Philippines at 6,500 had the second worst ratio among the four large ASEAN countries; Indonesia had only one doctor for 7,400 persons (lbid.).] Economic performance can be measured in GDP growth: from 1983 to 1987 the average annual rate for the Philippines was -.3%, for Thailand, 5.9%, for Malaysia, 3.9% and for Indonesia, 3.4%.
[Except for the high expenditures in Malaysia, the three other ASEAN countries are very close, with the Philippines about 1/3 below the average. But, of course, all figures on expenditures only indicate potential capacity until we know how and to what purpose the funds were being expended. We now realize, for instance, that in the Philippines large amounts in 1972 were already being channeled to Marcos and his cronies [except for the collection of personal income taxes, which we know falls disproportionately on the middle class.] Yet these statistical comparisons reveal nothing about state capacity in relation to different target groups. To examine that dimension one has to look directly at policy implementation, for which cross-national quantitative comparisons are almost impossible.
The Economic Elite
Before looking at different policy outputs, however, we need to establish the character of the Philippine [“dominant class”, or] economic elite, and its relationship to state leaders. Top government officeholders, also referred to in some literature as “state leaders”, constitute the major portion of the Philippine political elite. [In some periods bishops, businessmen and journalists have also been top political decision makers or important advisors to them.] (See Simbulan, 1965; Makil, 1970). There is, clearly, some overlap between state leaders and the economic elite, described in Marxist literature as the “dominant class”. That overlap is particularly noticeable in the make-up of the Philippine Senate (Abueva, 1969), as was revealed recently when they were required to publish their net assets. But the interaction between state leaders, mostly elected, and key figures in the economic elite is primarily determined by the patron-client system and the electoral practices which flow therefrom.
For even if many state leaders are not themselves members of the economic elite, they are their clients. They have found it necessary to seek the patronage of the wealthy to finance election campaigns, which, through the concept of utang na loob, obligates the politician to his benefactor. Though the obligation is perceived to be primarily for the extending of personal favors, not the protection of “elite interests”, there is almost never a contradiction between the two. Thus many top politicians providing favors for their respective patrons amounts collectively to the protection of the interests of the “dominant class”.
That class, or that elite, was long assumed to be largely composed of landowners. And indeed they are still a powerful component—witness the Cojuangco family. However, there is some evidence to indicate (Wurfel, 1979) that commercial and industrial interests have steadily risen in importance, though in part this has simply meant the diversification of economic activities by old families. (Carroll, 1965). In any case, those familiies have in most cases retained agrarian branches. Thus the interests of the economic elite include: protection of existing landownership patterns, crushing peasant movements that threaten to alter those patterns fundamentally, avoidance of taxation in so far as possible, maximizing access to government credit or developmental expenditures, and settlement of legal and political disputes in such a way as to least disturb the economic status quo. Grindle (1980 :8) has summed it up, “To the extent that public actions seek to introduce changes in social, political, and economic relationships, they generally stimulate considerable opposition from those whose interests are threatened by them.” Or, more succintly, reaction to policy depends on whose ox is gored.
To understand the way in which the Philippine state penetrates and/or interacts with the village, we must look at six dimensions of state capacity, or six policy areas. The areas designated differ slightly from those of Almond & Powell (1966) or those of Migdal (1988). We are going to examine extractive (taxation), distributive (land reform), regulative (dispute settlement), developmental (credit, community development), coercive, or order maintaining (counter-insurgency), and responsive (elections) capabilities. We will ask especially how elite interests are affected by these policies and how this in turn affected policy implementation.
The two types of taxation which have had the most direct and noticeable impact in rural areas in the last decade are land tax and the coconut levy. The coconut levy was a tax decreed by Marcos in 1974 that at one point reached P100 per 100 kgs of copra. Because at the same time copra buying and processing became a monopoly under crony Eduardo Cojuangco, the producer could not pass on the tax. (See Hawes, 1987). Though the smallest farmers were hit hardest proportionately, medium to large landowners suffered the biggest bite in absolute terms. This was entirely untypical of policies toward rural areas and exhibited the fact that up to the mid-1970s the capacity of the Philippine state to impose its will prevailed even when contrary to the interest of local elites. Eduardo Cojuangco was ruthless and had been delegated all necessary powers. But this imposition stirred opposition activity among large and small coconut planters alike, helping to bring down the Marcos regime. The dismantling of the coconut monopoly, including the levy, in 1986 was evidence of the restoration of the influence of the whole coconut planters bloc, including local elites, over state policy.
In contrast to the coconut levy, land tax and its administration changed little during the Marcos era. Research before martial law had established that in most provinces the majority of land taxes due were never paid, and many large and influential owners never even registered their land for taxation—there was no legal penalty for failing to do so! (Aquino, 1974) As with all taxes the fear instilled by martial law’s declaration pushed up collections in 1973- 74, followed by a slump to “normal” levels. Even full implementation of the law only required collection of 1 1/2% of an assessed value that was a small fraction of market.
In those areas where there was some significant implementation of land reform by the late 1970s, the general awareness of extensive landowner delinquency had a curious, though not unpredictable effect, a kind of “sanskritization” of peasant values. Amortizing owners under PD 27, the land reform beneficiaries, were supposed to pay the land tax, but a large proportion did not, perhaps believing that non-payment was a perquisite they had a right to share with their larger counterparts. In any case, the greater number of owners placed a new burden on the relevant bureaucracy, which already lacked the records, the staff or the transportation for field inspections to make them effective tax collectors. And at three stages of land reform, since the 1950s, a proposal to allow government purchase of delinquent land at assessed value never got past the executive drafting process to the Congress. In any case, land tax was a policy area which continued to reveal the weakness of the Philippine state in rural areas.
It is clear from the foregoing that extractive capabilities are closely entwined with those of a distributive character, e.g. land reform. But land reform is unique in that it is the only policy category under discussion where the target of the policy is explicitly one class, large landowners, and the original intent of policy is to diminish their power. (Thus in this area one would expect to find the state at its weakest.) Landlords in Congress have always tried to modify that intent, and have had some success. But the rhetorical commitment to reform in the executive branch always carried the day so that a bill was passed with some small component of reform. Even without a Congress landlords with access to the president in 1972 helped to soften the presidential decree. Yet it has puzzled some observers who have noted the great political clout of the landed elite why they did not simply halt the enactment of land reform legislation entirely. The explanation would seem to lie not only in the endemic pressures for compromise in the Philippine decision-making process, or even the generous loopholes which landlords inserted in the various laws, but also in their confidence that local elites would be able to influence local administrators so as to further soften the impact of the law. This is a pattern Grindle (1980) describes in Mexico, where patron-client politics also prevail.
An aspect of the Aquino “reform” amply illustrates this process. The July 1987 presidential decree relied entirely on landlord self-declaration for identification of lands to be subject to reform. There were no penalties for landowner inaction. Not surprisingly, despite a sophisticated public information campaign, most landlords—in some provinces as high as 90%—ignored the invitation. Even two years later, with a new land declaration provision in the 1988 legislation, backed by an indirect penalty difficult to administer, more than 1/3 of the estimated number of landowners had failed to register. Department of Agrarian Reform officials at the municipal level had neither the staff complement nor the political will to go out and find the delinquents. To a degree unprecedented, elected members of Congress from 1987 had exercised rights of patronage over DAR appointments. So in most districts DAR employees enjoyed their posts thanks to the intervention of landlord-politicians or politicians who were clients of landlords. This was, in fact, a tradition so strong that it even survived to some degree despite the absence of elections in the first several years of martial law. In 1976 the author discovered one local DAR official in Capiz who held office on the veranda of the largest landowner in the municipality!
The next stage of the Aquino “land reform”, the processing of “voluntary offers to sell”, not only produced a multi-million peso scandal which toppled the secretary of agrarian reform, but revealed anew how the system works. The key to the scandal was the overpricing of lands, by multiples of two, three or four, which were then quickly purchased by DAR. Procedures required not only local DAR officials, but also barangay captains to certify to the land’s quality and value. Because of modest monetary inducements, and because pressures for bloated land prices came from powerful politicians, most of those asked went along with the game. In the few instances where they did not, overpriced sales were approved by high level DAR officers anyway. So while cooperation of local bureaucrats and elected officials in the schemes of the landed elite and their clients was desirable, it was not essential. And the higher the price paid to the landlord by the government, the heavier the later burden on the farmer beneficiary of land reform.
Of course, in some instances small farmers and workers at the village level organized to prevent landgrabbing, overpricing or even to accelerate land redistribution. Sometimes such organization was assisted by the Left, but sometimes not. Often such farmers simply occupied idle land and petitioned for reform. This was a very direct challenge to the patron-client system, and thus to the dominant class. The president’s executive order on land reform of July 1987 took up the challenge, and set severe penalities for such land occupations— at the same time that landlord evasion was not penalized at all. (See Wurfel, 1989)
This is a category which could include a type of problem that has only recently received attention in the Philippines, pollution and environmental destruction. But here we will concentrate on a type of regulation that, insofar as it has been implemented outside of the regular court system, has been most often operated as an adjunct of the agrarian reform programme, i.e. rural dispute settlement. It has long been known that the most serious economic disputes in the village usually involved land, and that land disputes brought to the regular courts were decided in favor of the more powerful litigant, whether legitimate landowner or merely landgrabber.
Thus as part of the agrarian reform under Magsaysay in the 1950s there was introduced the principle that “those who have less in life should have more in law”. Such a principle was not, however, central to the legal fraternity and thus had to be implemented outside the traditional court setting. First was established the Agricultural Tenancy Commission, then the Court of Agrarian Relations. By the
1970s agrarian disputes were also being handled by the Legal Division of the Department of Agrarian Reform. Initially the presumption in favor of the tenant was often practiced; in any case, procedures were simplified and the use of the lawyers minimized. But eventually the lawyers, judges and commissioners who operated these quasi-judicial proceedings were influenced by the fact that they were the social equals of the local elites, not of the peasants. Some became activist patrons to exploited tenants, but more often they became compadres of landlords or mayors. Patronage intruded into the appointment process. Thus in many venues the stated class bias for the peasants disappeared in practice and the new institutions became more like the regular courts, arenas for elite manipulation.
In the late 1970s new barangay mediation boards were established, primarily to relieve the overcrowded court dockets. But these were for inter-peasant disputes, and the interests of the landed elite were seldom jeopardized. In any case, where they functioned well, these were institutions so indigenous to the barangay that they could hardly be called instruments of the state.
The allocation of resources by central government has included such programmes as agricultural credit and community development, though irrigation services might also be studied. In this category the implementation of policy may be explicitly class neutral, as with community development, and thus a favored object of foreign aid. But even when the flow of funds is justified in these terms, with high tribute to community “harmony”, the better educated, more articulate and more aggressive local elites often appropriated most of the resources. This was particularly noticeable in the formation of Farmers Marketing Cooperative Associations (FACOMAs) in the 1950s, when landlords were not excluded from being coop officers, and thus usually were. [This tendency was only partially corrected in the coop programme of the 1970s.]
Small farmer credit programmes, such as Masagana 99 and those of the rural banks in the 1970s, involved subsidized interest rates and were supposedly limited to cultivator beneficiaries. However, subsidized interest was too attractive for the local elites to resist. Mayors created “fake farmers” to get loans, after they had paid off field loan officers. The rural banks, on the other hand, temporarily withheld funds provided by the Central Bank to make short-term killings at usurious rates on illegal loans. Or the bankers, who were themselves prominent members of the local elite-often landlords, also established themselves as agricultural input dealers with whom loan recipients were required to deal. All in all the profit for the rural banks was at least as great as the subsidy to the small farmers of concessional interest rates (Wurfel, 1977). A policy explicitly launched with a class bias for small farmers often ended in practice favoring the local elite. Only insofar as the small farmer failed to repay—often concluding, understandably, that this was a form of patronage paid for in other ways—did he gain a greater benefit. But in some provinces the arrearages of rural banks to the Central Bank were greater still.
This includes the establishment of processes and institutions that allow a legitimate upward flow of demands from the rural areas, such as elections. However, in the Philippines elections can more clearly be seen as validation of the patron/client system. Elections are, for instance, the best way for a patron to determine the extent of his clientage. They also provide legitimation for the elite factional struggles that exist anyway in local arenas. Since elections are a crucial measure of the loyalty of a client, the end of local elections in 1972 for nearly ten years lent a certain unreality to intral-elite competition. Local elites tended to rely more on the backing of patrons in the central government than on the strength of clientage. And when local elections were first restored in 1980, fraud was often used to confirm the power of the incumbent. The return of much freer local elections in 1988 largely restored their pre-martial law function. In any case, elections are one of the most important activities ordained by the central government in the village.
By definition the order maintaining function should be class neutral. As long as it deals with cattle rustlers or town drunks it may actually be. But in the last two decades the primary role of police and armed forces in rural areas has been counterinsurgency. This was accompanied in early martial law years with an attempt, often successful, to disarm private armies of local politicians. Thus, in some areas the coercive power of local elites was actually reduced.
But the maintenance of a state monopoly on fire arms has long been difficult in the Philippines; the origins of the problem can be traced back to easy availability of surplus weapons after World War II. But low pay for ordinary soldiers has also made the AFP a for-profit supplier of insurgents, bandits and private armies. The problem was complicated with the creation of the Civilian Home Defense Forces soon after the declaration of martial law. The CHDF rank and file were peasants, but the leadership was committed to counter-insurgency and often had personal links to large landowners.
It is only since Aquino took power, however that the linkages between counter-insurgent forces and local elites have become more open and more direct. The 1987 constitution provided for the disbanding of the CHDF, because of their abominable human rights record. But many CHDF units were then recruited en masse by “privately” organized vigilante groups, often financed by large landlords and trained by the AFP, a throwback to Central Luzon in the 1940s. Vigilantes had been organized in most provinces over a six month period in 1987, shortly after the visit of Gen. Singlaub to the Philippines and accompanied by a spurt of anti-Communist political activity by right-wing religious groups. And by 1988 the government had announced a new paramilitary force, the Civilian Armed Force Geographical Units (CAFGU), which absorbed other elements of the CHDF. Thus counter-insurgency forces were composed of a mix of official military/police, official para-military and unofficial para-military. The last category in Negros, called the “PC Forward Command”, was openly and officially funded by the sugar planters association. All three levels received foreign funding, both official and unofficial.
The New People’s Army constituted the fourth type of armed force in rural areas (outside Muslim regions), and was relatively well armed. In some villages it was also a counter government, collecting taxes and administering justice, with a class bias against the landed elite. This is an understandable reaction to the fact that the state’s most important presence in rural areas, ostensibly for the “maintenance of order” is by no means class neutral, but directs its activities against the organized peasantry and their suspected allies. This is now the context in which all other state initiated programmes must operate.
This analysis should help us to understand that a study of policy impact cannot ignore identifying the explicit, or implicit, class beneficiary of the policy. An awareness of this dimension also helps us to understand the role of foreign actors, why some projects receive foreign funding and others do not.
This analytical approach was built on the work of Merilee Grindle and the more recent book of Joel Migdal, whose case studies include Egypt, Mexico and India. Migdal speaks of the relationship between local elites and bureaucrats as being that of “mutual accommodation” (1988:247). But in the Philippines there would seem to be a greater imbalance, with more accommodating being done by the bureaucrat than by the local leader, who Migdal calls “the strongman”. In fact, central bureaucrats at the local level were usually so accommodating that the threat of force against them by the landed elite was very rare, even the implementation of land reform. Migdal characterizes bureaucracies in Mexico, India and Egypt as having “mid level capabilities”, perhaps comparable with Indonesia or Thailand-but not with the Philippines.
Since we find that even government programmes that are designed to favor the small farmer are frequently directed to the benefit of the local elite, with the connivance or acquiescence of the bureaucracy, it is clear that only stronger organizations among the peasantry, with sophisticated political tactics, can change this pattern. Unfortunately, because of links to the Left, most bureaucrats do not regard many existing peasant organizations today as legitimate, or, if they did, would not be allowed to act on that belief by local elites.
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1 The weak/strong dichotomy is the earliest usage in this area. More recently the terms” capacity” and” autonomy” have been used together with such adjectives as “high” and “low” indicating calibration across a spectrum. “State capacity” or “capability” is the term coming out of the modernization literature (see Almond and Powell, 1966). Autonomy is the term deriving from the neo-Marxist tradition, as in the “relative autonomy” of the state from the “dominant class” (see Miliband, 1969; Poulantzas, 1968). Autonomy also connotes a certain relationship with the capitalist world system, which is rare, in the world system approach (see Wallerstein, 1974). The terms capacity or capability will be used most often in this paper, because there is a literature which subdivides the category in useful ways. But an awareness of class interests in the neo-Marxist tradition will also be incorporated, as well as a recognition that the autonomy/dependency dimension in the international context must be part of the analysis as well.