POLITICAL AND ECONOMIC INEQUALITY: INSIGHTS FROM PHILIPPINE DATA ON POLITICAL DYNASTIES.

AuthorMendoza, Ronald U.

INTRODUCTION

Inequality has become a key research area in recent years, fueled in part by the growing concern over persistent economic divides within and across countries, industrialized and developing alike. BREXIT, the 99% movement following the global economic crisis, growing anti-immigrant sentiment notably in advanced economies, and the rise of populism and economic protectionism in various parts of the world are only some of the recent phenomena that appear to be linked in some way to inequality.

Some of the main branches of economic inquiry have tried to examine its root causes, as well as its possible consequences, notably in terms of future growth and development. Advances in research--often spurred by innovations in measurement and theory--have also guided new thinking here. (1) For instance, whereas inequality was seen as an unavoidable ingredient of growth in the earlier stages of international economic reform, (2) more recent thinking emphasizes instead its detrimental effects on long-run growth and development. (3) This literature has capitalized on advances in measurement, allowing empirical analyses of economic inequality (and more recently human development and other forms of inequality) both across and within countries. There appears to be an emerging consensus that the drivers of economic, and other forms, of inequality are multidimensional and context-specific, including factors such as advances in technology in industrialized countries (in part eroding the economic gains of less-skilled labor), and chronic lack of access to education, health and social protection by large groups of the population in many developing countries (in turn leaving them marginalized even as urban centers of growth produce a rapidly growing middle class in these countries). (4)

Nevertheless, a disproportionate focus on economic drivers (and consequences) of inequality appears to have downplayed other important dimensions of this phenomenon. Fortunately, other fields have begun to deepen our understanding. There has been growing interest in the conceptualization and measurement of political inequality, with direct consequences on our understanding of economic and other forms of inequality and their possible causes and consequences.

Political inequality refers to the "structured differences in the distribution and acquisition of political resources" among citizens; and political resources are a "dimension of social stratification including the ability to influence both governance processes and public policy." (5) In principle, citizens have equal opportunities to engage in political life, vote in free and fair elections, understand and engage the workings of the political system, and shape the public policy agenda in democratic settings. Yet, in practice, citizens' relative capabilities to engage in political life and discourse, and their relative influence on policymaking, could be disproportionately skewed in favor of certain groups, notably relatively wealthier groups. (6)

The wealthy can exercise disproportionate influence on policymaking by dominating media and political parties, by being able to afford more sustained engagement in political life (as candidates for office or as voters with particularistic agendas), and by being able to gain access to enough information and knowledge from which to base their political engagement, all relatively more effective compared to the average citizen. (7)

Economic inequality could, therefore, be linked to political inequality in important ways. Solt, for example, argues that poverty and economic inequality imply lower political engagement for the vast majority, except for the relatively wealthy in society. (8) This situation, in turn, feeds greater political inequality. Beaumont notes how disparate access to education could exacerbate early political advantages, creating a stratifying effect on young peoples access to political resources. (9) Moreover, gender aspects and institutional design could also exacerbate political inequality. (10)

Put simply, economic and other forms of inequality are also often the result of political decisions, and these could be addressed, in principle, by political action and policy reform. Nevertheless, if public policy-making and overall governance processes are biased in favor of the wealthy and more politically connected, then it is possible that economic inequality merely mirrors deeper political inequality. Ascertaining this link is the subject of nascent empirical research that hinges on effectively measuring political inequality.

This article contributes to this emerging strand of literature by proposing a unique measure of political inequality that focuses on the concentration of political power in the hands of a few politicians; notably, those that belong to powerful political families. Using a unique provincial-level dataset on local government leadership in the Philippines, this study develops a political inequality index based on the concentration of elective positions among political dynasties (i.e., members of a political clan occupying elective positions across time and across political levels in the local government). This measure is then used to test initial hypotheses on the possible links with other socioeconomic and inequality indicators across Philippine provinces.

Our initial findings suggest that political inequality, unlike economic inequality," displays a negative relationship with development. Economic inequality in itself is not necessarily problematic for growth and development. However, when this inequality hits a certain threshold combined with political inequality, the forces exacerbating inequality could also be limiting the relative political voice and economic participation of a large section of the population, resulting in weaker development outcomes. Further exploring the empirical linkage between political and economic inequality is an interesting area for expanded study.

DATA

Dahl acknowledges the difficulty of measuring political (in)equality in the context of the United States in this way:

"Achieving truly well-grounded judgments about the future of political equality in the United States probably exceeds our capacities. One reason is that, unlike wealth and income, or even health, longevity, and many other possible ends, to estimate gains and losses in political equality we lack cardinal measures that would allow us to say, for example, that 'political equality is twice as great in country * as in country Y,' At best we must rely on ordinal measures based on judgments about 'more,' 'less,' 'about the same,' and the like. Sometimes we can also arrive at solid qualitative judgments that are themselves based on quantitative indicators, as with changes that occurred when groups previously excluded, such as workers, women, and African Americans gained the franchise and other important political rights." (12) Other scholars suggest rough approximations, such as participation rates in politics and politically relevant associations, disaggregated by parameters such as class, race or ethnicity, and gender. Or perhaps the alternative measures to look at: include the results of political participation, such as poverty incidence, measures of social exclusion, and divergence in education quality. (13)

More recently, Acemoglu et al. leveraged their analysis of political inequality by turning to measures of concentration of political power. (14) Turning to data on municipal mayors in Cundinamarca, Colombia, during the period from 1875 to 1895, these authors developed an index of political concentration reflecting the extent to which political office holding was monopolized by certain individuals or families. They then assessed how this measure compared to the inequality in landholding (i.e., land gini) in the same region. De facto, they analyzed how political and economic inequality could be empirically related.

They found initial positive correlations between the land gini and stronger development outcomes (i.e., higher levels of primary and secondary school enrollment). On the other hand, they also uncovered negative correlations between political inequality (i.e., concentration of political office holding among certain individuals and families) and schooling outcomes.

While they did not establish causality, they nevertheless noted that these correlations may help dispel previously held notions that land inequality (a common measure of economic inequality) may not necessarily be linked to poor development outcomes. These authors hypothesize that powerful and rich landowners may have provided checks against the anti-developmental tendencies of politicians. On the other...

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