Nadevco Paper Final Draft

8/17/2019 Nadevco Paper Final Draft

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The Developmental State: A Comparative Analysis of

the Philippine and Malaysian Policies in the

Pursuance of a Newly Industrialized Country (NIC)

Status

A Descriptive-Explanatory Research Paper for the Partial Fulfillment of the

Course on Contemporary National Development

By the study group of:

Alzate, Ma. Jobellieza

Cabaitan, Jeremy

De Catalina, Matthew Louise

Langomez, Jan Emil

Lee, Jackielyn Grace

Oliveros, Kelly Grace

Pariña, Sharmine

Villanueva, Juan Carlos

Yaokana, Abigael Mei


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To be submitted to:

Prof. Ma. Susan J. Lucero

INTRODUCTION

Background of the Study

The pursuance of this study is motivated by the presence of economic disparity among

Southeast Asian Nations; particularly the Philippines, of which it is part of the bottom

economically-performing countries; and Malaysia, which is considered to be one of the rising

economic tigers within the Southeast Asian region.

Personal and academic experience has motivated the research group of this study to look into

the different trajectory of development outcomes that the Philippines and Malaysia experienced,

and why such manifestations took place.

Problem Statement

The problem statement is worded as the following, in order to guide the paper in illustrating therelationship between the Philippines and Malaysia:

“Why did the Philippines and Malaysia manifest different development outcomes despite of the

similar state of development that both countries had during the 1960s post-decolonisation

period?”

Objectives of the Study

The study has a set of 3 objectives to holistically answer the Problem Statement:

• Objective #1: To identify the theoretical benchmarks of Newly Industrialised Countries

(NICs)

• Objective #2: To compare the Philippines and Malaysia along variables and in both

countries’ pursuance of achieving NIC status.


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• Objective #3: Using the results of comparison in objective #2, assess the extent of

compliance of the Philippines and Malaysia to the theoretical benchmarks of NICs.

Significance of the Study

The purpose of this study is to provide an overall understanding of NICs and its characteristics.

This study is significant since it will provide theoretical and empirical findings in relation to the

Philippines and Malaysia’s pursuance of NIC status. Using comparable variables, this study will

provide an objective analysis with regards to the different development trajectory that the

Philippines and Malaysia manifested in the pursuance of NIC status; and as such, could provide

the reader of this study a better understanding of what constitutes as a NIC, and why the

Philippines and Malaysia realised different development trajectories regardless of the similar

state of development during 1960s post-decolonisation.

Methodology

Hypothesis

Based from the Problem Statement, the hypothesis logically assumes the following:

The Philippines could have achieved a similar development outcome with that of Malaysia if it

fundamentally prescribed with the paradigms of statist-institutionalism in achieving Newly

Industrialized Country (NIC) status.

Overall Research Design

The overall research design will be a comparative study of the two focal units of study; being the

Philippines and Malaysia. The overall approach to the comparative study will be validation-

deductive, meaning that the study will generally validate already known definitions and

characteristics provided in the Review of Related Literature (RRL); and that such verifiable

studies will draw from general statements, into more specific descriptive analyses.

Data Collection Methods

The study will heavily rely on RRL, meaning that the qualitative and quantitative data collected

will be mostly drawn from secondary resources, provided by already known academic literature

and studies.

Methods of Analysis


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Due to the overall nature of the research design and data collection methods, the method of

analysis will be descriptive-qualitative in describing Philippine and Malaysian pursuance of NIC

status from the temporal focal unit of study from the 1960s to 1990s. The study will partially

borrow second hand empirical quantitative data to provide a form of explanation in analysing the

findings found within this study.

Scope and Limitations

Theoretical and Conceptual Framework

The study uses statist-institutionalism as a theoretical lens in approaching the process of which

a state must undergo in order to achieve NIC status. Through the use of the variables;

specifically, economic policies, colonial imprint, veto play, leadership style, values system and

role of civil society;the framework assumes that the fundamental adherence to these

benchmarks (which will be further explained later in the study) would hypothetically guide a

state towards NIC status.


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Review of Related Literature

Statist Institutionalism

Statist Institutionalism is a political theory that describes the important role of institutions –

specifically, the state – in guiding countries towards economic and socio-political development

(Trondheim, April 2007). The heavy theorisation of statist-institutionalism is found in the many

conceptualisations of developmental states, specifically through the South Korean experience

during the 1970s up until early 1990s; and for some, even until the early 2000s (Woo-

Cummings, 1999).

The core premises of statist institutionalism assume that: first: the state as an institution plays a

leading role in a country’s development (Woo-Cummings, 1999; Trondheim, April 2007; Hae

Yung Song, November 2010); second: with its leading role, the state subordinates both civil

society and the private sector under its established socio-economic – and sometimes, political –

goals towards realising development (Trondheim, April 2007 &Hae Yung Song, November

2010); third: the state remains autonomous from civil society and the private sector; yet since it

plays a leading role in realising a country’s development, the state remains cooperative but at

the expense of the autonomy of the civil society and private sector (Trondheim, April 2007&

Wade 1990). The autonomy of the state with regards to its relations with civil society and private

sector will be further explained under embedded particularism.

Developmental States

A developmental state is a country where government is intimately involved in the macro and

micro-economic planning in order to grow the economy (Onis, 1991).

As generally observed, successful developmental states have the capacity to advance their

economies faster than those regulatory states who uses regulations to manage their economy.

To have a wider sense of concept, one must identify the characteristics of a developmental state

(Thompson, 1996; Woo-Cumings, 1999). Generally speaking, developmental states give strong

emphasis on technical education as well as the numeracy and computer skills within its

population. Technically, oriented education is strategically used to capacitate the government

structures, specifically the bureaucracy. What resulted with this strategy is that both the political

and bureaucratic layers are populated by extremely educated people who have enough assets

of analysis to be able to take leadership initiatives and in every decision making nodes within

the government structure (Marwala, 2006). As observed, development states can efficiently

distribute and allocate resources. Another characteristic of successful development states is


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economic nationalism. The government’s emphasis on market share over profit is also seen as

a contribution of a developmental state (Marwala, 2006).

Evidently, successful developmental states protect its embryonic domestic industries and focus

on aggressive acquisition of foreign technology. It is achieved by means of deployment if theirmost talented students to universities abroad which were located in strategic and major centres

of the innovation world and utilizes their foreign missions (Marwala, 2005c; Marwala, 2006).

Furthermore, successful developmental states encourage and reward foreign companies that

invest in building productive capacity at the same time aiming at the local industrial sector which

in time, achieved vital success factors from these companies. (Marwala, 2006) To construct a

much more harmonious social-industrial complex, these states target a strategic alliance

between the state itself, labour, and industries just so to increase critical measures including

productivity, job security and industrial expansion (Marwala, 2006). Although successful

developmental states do not create enemies unnecessarily, and do not participate in the

unnecessary criticism of countries with advance and strategic technologies that they wishes to

acquire; however, they are sceptical of mimicking foreign values without translating and infusing

them with their local version or characteristics (Marwala, 2006). For successful developmental

states, they generally believe that state legitimacy will be achieved by means of service-delivery

and provisioning towards the welfare of their citizens rather than through elections (Marwala,

2006). State legitimacy and infusion of values will be discussed later under values system.

A very important element of successful developmental states is through the pursuance of

industrialisation; and according to Professor Tshilidzi Marwala (2006), it is a vital tool for the

success of these states. The goal of industrialisation is to make a certain country who produces

goods and services with high added value (Marwala, 2006). For instance, instead of exporting

unprocessed minerals, people can now be employed to benefit from these minerals and

manufacture goods and therefore this will add up economic value to the final products (Marwala,

2006). The process by which countries aggregate economic values to the products and services

the country offered is directly dependant on the level of industrialization in the economy of the

country (Marwala, 2006).

In order to achieve a robust developmental state, there are two aspects that are significant and

these are to vastly increase the level of education attainment among the population of the

country. Another is to increase the knowledge content in the society specifically in the field of

mathematics, science and computing.


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Moreover, the basis and foundation in building a developmental state is to focus in developing

the following areas: (1) an educated population with high rate of numeracy and computer

skills’ (2) a knowledgeable society with high rate of scientific literacy; (3) a harmonious society

with a strategic partnership among the government, industry, society and labor; and lastly, (4) a

society that will efficiently allocates and distributes resources (Marwala 2006).

Newly Industiralised Countries (NICs)

For decades, we have witness Europe and North America who had economically surfaced and

are considered to be as one of the world’s major industries. The present situation is different

and we have now witnessed other countries, particularly the Asian nations who are now

catching up and even surpassed large industrial countries. These developmental states have

rapidly developed a large manufacturing industry and therefore, we have seen their economies

grow and their countries become wealthier.

To describe Newly Industrialized Countries, it is a country who has recently experienced an

economic shift into an economy of stability and industry. They have manage to shift towards a

stable government and industrialized economy. These countries have higher standard of living

and per capita income.

NICs more or less share almost the same characteristics but with a freer and stronger direction

of developed market countries. Some common attributes in the NICs includes increased

economic freedoms, increased personal liberties, transition from agriculture to manufacturing,

large national corporations among others (Keeuper 2006).

In his book, Development Theory and the Three Worlds, Bjorn Hettne (1995) made it clear that

NICs should not be violated in terms of its model. He further summarized that the most recent

wave of industrialization which took place only in the limited number of countries in different

region. He elaborated that one can learn from the experiences of these developmental states

but he discourages countries to imitate these models take the example of countries like the

Philippines and Sri Lanka, their efforts were deemed unsuccessful and just further underline the

uniqueness of the NICs (Hettne, 1995). NICs still accept and acknowledge old international

economic order and it is considered as a phenomena. Taiwan and South Korea are a perfect

example in this discussion. The two countries’ economic transformation is dramatic, whilst their

social structure is more egalitarian. The reason for their successful transformation is more or

less unique. They both shared Confucian work ethic, radical land reforms, geopolitical

importance and their closeness to Japan (Hettne, 1995).


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Nonetheless, NICs are also cautious with regards to fully integrating with the market economy,

and as such implement protectionist provisions within their economic policies to protect their

local industries (Woo-Cummings, 1999). Importantly, this strategy considers both internal and

external constraints which may contribute in opportunities. The NIC phenomena underlines the

old saying “nothing succeeds like success”, but this has never been a very helpful recipe forcountries that tend to fail (Hettne 1996).

Japanophile Architectonic and Soft Authoritarian Leadership

Japanophile refers to a type of leadership wherein the government greatly intervenes in the

market in terms of economic development. According to (Cumings, 1999), the characteristics of

Japanophile are the following:

Utilization of bureaucratic capacities to undertake numerous economic tasks, directly

anywhere from collecting taxes to building infrastructure, to promoting production.

For the Japanese, a highly authoritarian and bureaucratic state is adequate in terms of

promoting economic growth. Under this characteristic, the state makes use of its bureaucratic

capacities to advance the production. Substantially, the state also combined property-owning

classes in production-oriented alliances to assure that the economic agenda will be

accomplished. (Cumings, 1999). As a greatly purposive leader, the leader positioned the state in

promoting production as its main priority before anything else. With this type of leadership, the

state will make use of its means to increase the use of technology, the control over credit,

subsidies, capital accumulation and such. Under this characteristic, Japan has committed itself

to an export-oriented economy, meaning most of its manufactured products would be sold

abroad and in exchange, the foreign currency they made would be devoted in the purchase of

technology, management, raw materials and energy sources along with a compact control over

labour is seen as a route to further developing one's economy. Also, the state was able to

protect steady increases in production, whereas the property owning groups received enough

political support to ensure healthy profits. According to (Cumings, 1999) the leadership used by

the Japanese leaders situates a state-directed economy along with state-business alliance and

considers it as the heart of the strategy of transformation.

The idea of soft authoritarianism as coined by political scientists refers to a political system that

softens a more strict authoritarian system with selected democratic features. According to

(Loong, 2013), soft authoritarianism may include elections and opposition parties (which are

usually hampered by electoral fraud and threats), limited separation of powers, human rights are


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being confined and such. Under the soft authoritarianism, democratic elements that are

instrumental in portraying that there is a democracy is severely immobilize. Soft authoritarian

regimes basically prohibit the accountability that can be utilised over a dominant party. Soft

authoritarianism portrays a system wherein political institutions are considered as necessary

equipment towards assuring the dominance of a single party.

According to Nasir (2013), soft authoritarianism can be defined as a political system wherein

there are limited instruments of democracy such as having elections and political parties but the

state control of the economy, social and political rights and the priority of an export driven

growth are most likely to be compromised. Under this kind of leadership, the state only

constitutes an educational system to discipline the electorate instead of creating a citizen who is

well informed of what is happening because the government has a low trust between leaders

and electorate. The only obligation of the inactive citizen is to agree on the legitimacy of the

regime. Also, soft authoritarianism argues that it is the responsibility of the state to cater security

by discouraging the existence of citizens who are repressive.

For Turner, soft-authoritarianism can be described as a political system wherein there are

limited components of democracy such as elections and the right to establish a political party

however, living in an era of rapid modernization, basic social and political rights are being

jeopardized. The state uses the laws to restrain any political activities on the part of citizens.

The use of oppressive laws, controls on political participation, measures and limiting civil and

political rights and freedom of the press are undeniably present in those countries who areunder a soft-authoritarian type of leadership. (Turner,2013).

According to (Cheng and White, 1991) the word "technocracy" came from a social movement

that happened in the United States in reaction to the Great Depression. Throughout the

depression, few advocates of technocracy assert that the socio-economic dilemma could only

be solved by applying natural sciences. Some convictions of technocracy are as follows: 1)

problems which arise from change of technology can only be diminished by applying the use of

more advanced technology and 2) the government is responsible for handling all types of

problems and with this, the government must be contained with experts, specifically engineers

and scientists (Cheng, 1991).

The perspective of technocracy is that the elite transformation is in conformity with the society's

functional needs so that the person who possessed the most highly valued skills would likely

become the basic elite recruitment (Zang, 1993). In the era of modern society, technical and


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scientific expertise has become the fundamental basis for leadership. They also considered

technical skills as the groundwork in accessing power. Technocracy in its simplest form may be

defined as a political system wherein the influence can be determined by technicians of the

administration and of the economy.

According to Graham, the term "technocracy" is used to signify that the governing power is

divided in the modern state, by a parliament, by a bureaucracy and a technocracy. (Graham,

n.d.). For Grahams (n.d.), technocracy consists of economic planners, natural and social

scientific experts, strategic thinkers and such. Technocrats are those people who are considered

to have an expertise on a certain discourse of social policy; meaning, they are professionally

trained experts. Technocrats are also considered to be the "makers of politics and purveyors of

mass information" and they are usually responsible for maintaining the high economy running.

The existence of technocrats hypothetically results into a highly-oriented and professional

bureaucracy (Graham, n.d.).

According to Tadem (2013), technocracy concentrates on its recruitment into government

because they possess specialised knowledge in a certain field. It is acknowledged that the

technical expertise makes up the power elite of the modern society. Their appointment is

basically deemed based on merit as experts in their certain fields and they are viewed to be

apolitical (Tadem, 2013). Some also believe that under a bureaucratic state, technocrats are

seen as the new policy pioneers and systematic administrators; with this, some believed that

technocrats are slowly replacing politicians in terms of policy making (Tadem, 2013). Theimportance of technocrats are paramount, their expertise and specialisation of knowledge is an

important asset of a state in order for countries to position themselves in realising successful

economic and political outcomes, of which technocrats will help guide and shape important

policies to realise these outcomes (Tadem, 2013 & Woo-Cummings 1999).

Most economies rely upon the private sectors to stimulate the economic activity and growth.

Private sectors are considered to be the centre of economic growth because it provides revenue

to the economy, establishing jobs, and crating technology and innovation (Woo-Cummings,

1999; Tadem, 2013; Paderanga 2011). However, these sectors can only function being in a

place wherein businesses and private sectors can gain profit; more specifically, adequate

returns in which their gains won’t be expropriate and where there is an availability of minimum

level of stability both in both policy and economics (Paderanga, 2011).

Philippine and Malaysian Economic Policy (1960 – 1990)


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According to the National Economic and Development Authority report in partnership with Japan

International Cooperation Agency (2013), the Philippines has been formulating economic

policies through its “Development Plans” covering some years usually according to the

President’s term as early as 1950’s detailing the goals and steps in order to achieve them. The

first Philippine Development Plan was the happened in 1957-1961 and it was followed by the1961-1964, 1972-1975, 1987-1992, 1993-1998, 2001-2004, and the 2011-2016 Plan. For the

past five decades, a variety of economic policies were formulated. Economic protectionism and

import-substitution policy were implemented after World War II and it continued until 1970s

(NEDA, 2013). However the Philippines adopted the “openness model” slowly at the beginning

of 1970s and accelerated in the late 1980s which aim for closer global economic integration on

the basis of liberalization, deregulation and privatization; the three out of Williamson's Ten

Points which coined the term Washington Consensus. Macroeconomic stability and exchange

rate movement have begun to get much needed attention. Appropriate sequencing of

liberalization in trade, prudential regulation of capital account and financial sector reform started

while strengthening of domestic institutional capacity and attracting foreign direct investment

became important economic goals.

During the 1950s to early 60s, the country planned recovery from the devastating war. The

Philippines tried to become an industrialised nation. There was a need “to adjust the Philippine

economy to the situation after 1954 (when US Government payments would have declined),”

and “to better enable the country to make the structural adjustments necessary in the transition

from an agricultural to an industrial economy with a minimum dependence on outside markets.”

Some important points used to accomplish this goals are the following: (a) policy to make

foreign exchange increasingly available for use and to gradually eliminate exchange controls to

promote economic competition; (b) a complimentary tariff policy to safeguard against the

negative effects of relaxing foreign exchange control; (c) a production policy that would promote

diversification and a price policy that ensures domestic price stability and reduces, if not

eliminate, windfall profits in the import trade; and (d) a commercial policy encouraging

expansion to foreign markets while enlarging the domestic market. (NEDA, 2013)

During the 1970s, removal of import substitution policies of the past and a liberalization of the

economy, both internally and externally were aimed. The Plan specifically called for removal of

the minimum wage to encourage employment especially labor intensive activities, elimination of

the interest rate ceiling to accelerate the development of the capital market, reduction of the

tariff rates to expose local industries to global competition and thereby encourage them to


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become more efficient and competitive, and elimination of stringent laws on foreign investments.

(NEDA, 2013)

In the 1980s, the Philippines adopted various structural adjustment and stabilization policies to

correct fundamental distortions in the economic incentives and imbalances in the external andpublic sector accounts, as well as to minimize the potential instability in the process of those

reforms. Past studies have already amply demonstrated that up to the early 1980's, price

intervention policies, both commodity-specific and economy wide, have created an incentive

structure that is significantly biased against agriculture (David 1983; Bautista 1987; Intal and

Power 1991)

The two main agenda for the late 1980s to early 1990s are the following: liberalization, which

involved the general lowering of tariffs, removal of anti-labour biases in laws and regulations of

the economic regime, and a rurally focused employment creation. The theory was that when the

agriculture sector grows the Industry sector will also grow as a result of increased demand from

the rural-based industries. Once the industry expands, the liberalization strategy will expose

local industries to foreign competition thereby forcing them to become efficient and competitive

in the international market. In the short term, efforts would focus on the creation of income-

earning activities and, in the medium term, on the generation of labour-intensive industries,

especially in the export sector. Continuation of the preceding policy of liberalization,

deregulation, and globalization became the proposed a strategy for the rest of 1990s. Domestic

savings will be the source of these investments which would be augmented with foreign saving.

It also set up detailed program on the development and production of competitive goods and

services, the global search for and acquisition of global technology applicable to the Plan’s

priority areas, and support for research and development. (NEDA, 2013)

Uplifting the people to a life of prosperity and dignity became the overriding objective in the

2000s focusing on growth and human development in a framework of macroeconomic stability,

free enterprise, and good governance. Growth was to be achieved in agriculture, especially in

crop production and fisheries, and industry and later services. Human development would focus

on the reform of the educational system, including basic and higher level education, and on the

promotion and upgrading of skills. (NEDA, 2013)

Finally, the Philippine Development Plan of 2011-2016 intends to pursue rapid and sustainable

economic growth and development, improve the quality of life of the Filipino, empower the poor

and marginalized and enhance social cohesion as a nation. The Plan Centers on five key


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strategies. First is to boost competitiveness in the productive sectors to generate massive

employment. Second is to improve access to financing to address the evolving needs of a

diverse public. Third is to invest massively in infrastructure. Fourth is to promote transparent

and responsive governance, which is emphasized in all the chapters. And fifth, is to develop

human resources through improved social services and protection. (NEDA, 2013)

According to Yogyakarta (2004), during the colonial period, Malaysia has a relatively high level

of development and this was due to the resource based development that had taken place since

the end of the 19th century. During the 1850s, private sectors mainly owned by Chinese and

European companies, had started to develop the tin-mining industry. Until the 1970s Malaysia

was the largest tin producing country in the world. Rubber cultivation is also a major player on

Malaysia’s development during the early 20th century and in 1956, Malaysia became the world’s

largest producer of rubber. When Malaysia gained independence in 1957, Malaysia was one of

the relatively economically developed countries in Asia. Malaysia has the third income per

capita in Asia, after Japan and Singapore during the time of its independence. During the 1960s,

Malaysia attempted to industrialize with the implementation of Import Substitution Policy/First

Malayan Plan which unfortunately was quite unsuccessful.

According to Lehar (2007), the New Economic Policy which was introduced in 1970, was a long

term plan spanning for 20 years. This policy’s approach is to sustain growth with an active

participation of the government. Government participation was very much needed to validate

the equal growth of standard of living on Malaysia’s population because at the end of the First

Malaya Plan, different ethnic groups were at different levels of economic achievement. The

NEPs objectives are 1.) To eradicate poverty, meaning that poor rural households are absorbed

into the modern sector as well as raising the productivity of farmers by providing land

development, irrigation facilities as well as replanting rubber with higher yielding varieties. 2.) To

restructure society; meaning employment by sectors be fractionized by races. (54%-Malay,

35%-Chinese, 10%-Indians, 1%-others) as well as Bumiputera should own and manage at least

30% of equity of the corporate sector, 40% comprised by other Malaysians and 30% for

foreigners and last, to create Bumiputera Commercial and Industrial Community because there

is a shortage of Bumiputera entrepreneurs and it is a huge obstacle to reach fairer distribution of

income.

According to Malaysia’s Economic Planning Unit, Wawasan 2020 or Vision 2020 was created in

1991 with the objective of making Malaysia a developed country by 2020. To achieve this,

W2020 targeted a 7 percent economic growth rate from 1991 up t 2020. W2020 has nine

strategic challenges: 1. To establish a United Malaysia with similar goals 2. To create a


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psychologically liberated, secure and developed Malaysian society 3. To develop a mature,

democratic society 4.To establish a fully moral and ethical society 5.To establish a mature,

liberal and tolerant society 6.To establish a scientific and progressive society 7.To establish a

fully caring society and culture 8.To ensure an economically just society 9.To establish a

prosperous society, with an economy that is fully competitive, dynamic, robust and resilient.With relations to W2020, the Second Outline Perspective Plan was introduced. Its main policy

was the National Development Policy.

According to Menon (2008), during 1990, The New Economic Policy was replaced by the

National Development Policy. The government declared NEP to be “in abeyance” which resulted

in easing the strictures of the NEP, with a view to putting the creation of wealth ahead of

redistributing it. NDP aimed to establish a more united and just society and aims to make

Malaysia a fully developed country by 2020. Regarding NDP’s objectives, NDP still maintained

NEP’s two objectives but added four more. -The first added objective is to shift the focus of anti-poverty strategy towards eradication of hard core poverty while at the same time reducing

relative poverty. Secondly, focus on employment and rapid development of an active

Bumiputera Commercial and Industrial Community as a more effective strategy to increase

meaningful participation of Bumiputera in the modern sectors of economy. Thirdly, rely more on

the private sector to be involved in the restructuring of society. Fourth, to focus on human

resource development as a fundamental requirement to achieve the objectives of the growth

and distribution.

The National Development Policy Framework (2010) stated that during 2001, the NationalVision Policy was created which is an extension of National Development Policy. NVP covers

the 8th and 9th Malay Plan. It also covers the second part of Vision 2020. NVP’s main objective

is to establish a united, progressive and prosperous Bangsa Malaysia that lives in harmony and

engages in full and fair partnership. NVP have seven critical thrusts:

1. Building a resilient nation

2. Promoting an equitable society

3. Sustaining a high economic growth

4. Enhancing competitiveness

5. Developing knowledge based economy

6. Strengthening human resource development


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7. Pursuing environmentally sustainable development.

Embedded Particularism and Autonomy

The autonomy of the state was partially discussed earlier under the RRL of statist intuitionalism.

The concept that deals specifically with the autonomous position of the state is known as

embedded particularism. Embedded particularism implies persistence of state-society relations

inimical to application of universalistic rules across cases—the effective homogenization of the

subject and the case (Woo-Cummings, 1999). Peter Evans (1995) defines embedded autonomy

as an “Embedded autonomy combined Weberian bureaucratic insulation with intense

connection to the surrounding social structure, offering a concrete resolution to the theoretical

debate over state-society relation. According to Evan’s book “Embedded Autonomy: States and

Industrial Transformation (1995)” states vary in the way they are organized and tied to society.

Evans's years of comparative research on the successes and failures of state involvement in

the process of industrialization demonstrates that successful state action requires an

understanding of its own limits, a realistic relationship to the global economy, and the

combination of coherent internal organization and close links to society that Evans called

"embedded autonomy."

Evans’ argument revolves around the importance of the state in fostering development. For

Evans, the bureaucracy requires autonomy from society, but also a degree of embeddedness if

it is to contribute to development. He argues that the state can play four major roles in theeconomy: custodian (protection, policing, regulation); midwife (birthing new enterprises in

specific sectors); husbandry (teaching, cultivating and nurturing entrepreneurial forces); and

demiurge (becoming directly involved in productive activities).

In the early 1980s, James Buchanan developed a “neo-utilitarian” model of the state (Evans

1995). His neo-utilitarian made it appear that incumbent politicians were incapable of behaving

in ways consistent with the common good. The state is associated with cronyism and rent-

seeking. The neo-utilitarian approach went further than neoclassical economic theory inasserting that markets not only result in short run allocative efficiency but are also sufficient to

produce structural transformation. With no intellectual successor to neo-utilitarianism,

neoliberalism remained influential (Evans 1995).

The neo-utilitarian approach according to Peter Evans (1995) is associated with rational choice

theory. However, if institutional patterns define individual interests, or constrain the pursuit of


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those interests, then individual behaviour cannot be predicted from basic motivational

assumptions. Peter Evans (1995) starts with the extensive literature looking at the state in

comparative historical terms, in particular the work of Max Weber. Weber was interested in what

kind of institutional structure (bureaucracy) the state must have in order to act as an effective

counterpart to private markets. The state can organize economic activity on a much larger scalethan private economic networks. It can also stimulate investment by private actors. For these

reasons, it plays a vital role in economic growth in “late” (or “late late”) developers.

Evans’s own approach begins with the Weberian bureaucracy. Bureaucracy is used as a

generic term, equivalent to the organizational apparatus of the state. State are not seen as

varying substantially in a degree to which they are bureaucratic. The question of state-society

relations is more complicated. The key is to identify differences in the way states are organized,

and try and show how these differences affect developmental outcomes.

The developmental state can claim a transformative success, but this success threatens the

stability of the state-society coalition that made success possible to begin with. He argued,

“expanding the scope of state-society links to include a broader range of groups and classes

should result in a more politically robust and adaptive version of embedded autonomy”.

Colonial History and Influences

Western powers generally tried to initiate similar economic and political policies towards their

colonies during the eras of colonisation, and even post-decolonisation (source).

In developing nations, one of the most dominant features of state bureaucracy is its inherited

colonial legacy, in spite of the postcolonial rehabilitation and reforms in the administrative

superstructure. Although the recent pro-market reforms under structural adjustment programs,

including privatization, deregulation, and liberalization, have created certain challenge to

bureaucracy, especially in terms of its size and scope, there has been minimal change in its

inherited structural, normative, and behavioural formation. (Haque, 1997)

Post-colonial land reform is a necessity, but its design and implementation invoke questions

about the bounds of government authority to reshape the idea of the individual right to property,

an issue traditionally left to domestic governance under the principles of sovereignty (Peterson,

2012).

Land reform was meant to redress historical settler-colonial land dispossession and the related

racial and foreign domination, as well as the class-based agrarian inequalities which minority


17/49

rule promoted. Post-independence land reforms sought to alter the resultant repressive social

relations of production and reproduction, through broadening access to land and promoting

peasant productivity. Implicitly, land reform would free labour from the exploitative tenancy

relationship used by large-scale farmers to compel the landless to work for low wages (Moyo,

n.d.).

The years from 1950 through the late 1980s, which we may call a miracle period, was a time

during which Japan succeeded in catching up with the West while pulling up a number of the

region's developing economies along the way. East Asian economic development in the post-

World War II period has few historical parallels. In a short span of thirty-some years Japan was

transformed from a war-devastated country into an economic powerhouse second only to the

United States while other poverty-stricken, agricultural economies of the region have been

transformed into newly industrializing economies. By being the region's most technologically

advanced, dynamic and rich economy and by being their major trading partner and source offoreign investment, Japan has played a highly instrumental role in the economic development of

its neighbouring economies (Lee, 1998).

Values-Systems, Nationalism and Social Reengineering

Value systems; support the behavioural system according to the nature and origin of their

sensitivity to the motivational state of a subject. Its knowledge about its environment, as well as

their intrinsic timescales influences the state’s decision making process. Values system utilize

the costs and benefits system to determine, the different

the possibility of choosing when or how quickly to act as well as what to do, and different prior

expectations that may be brought to bear in that vast majority of cases when aspects of the

problem remain uncertain. In keeping with the complexity and centrality of value-based choice,

quite a number of psychologically and neutrally different systems are involved. These systems

interact both cooperatively and competitively. (Dayan, n.d.)

Legitimacy is closely linked to the capacity of the state. Political and administrative capacity to

serve the major part of population with essential services is likely to improve legitimacy. One

would expect an effective state to be more legitimate than an in effective one, provided that itspolicies are more or less in accordance with popular preferences and expectations.

Strengthening people´s participation in public affairs and improving delivery of public goods may

not be sufficient for a state to increase its legitimacy. For example, if the state fails to engage

with people’s perceptions of what is right and acceptable, and with the interests of powerful

actors in both state and society, such efforts will be sidelined. The state´s need for revenue

gives rulers an incentive to tax citizens. The experience of being taxed in turn encourages


18/49

citizens to mobilise, engage politically, and check the way in which government uses its revenue

and perhaps negotiates tax demands. This can lead to increased mobilisation of civil society

and private sectors, which can improve the state´s capacity to design and implement policy

(Oslo 2010).

Civil society organizations play vital roles at local, national, regional and global levels in the

promotion of decentralization and inclusive governance; i.e. governance characterized by the

principles of participation, access, equity, subsidiarity and the rule of law. At the local level, civil

society organizations are actively engaged in community development, skill improvements for

sustainable livelihoods and access to basic social services. Through local elections and local

elected councils, they can hold local leaders accountable and influence the articulation of local

needs and priorities. In urban areas, civil society organizations have played a major role over

the years in urban shelter, services, and protecting the interests of slum dwellers and squatters

in government initiated programmes. They organize poor urban communities to help them gain

access to land titles and basic urban services, such as water, sanitation, primary healthcare and

education. Active civil society engagement at the local level, however, requires open and

transparent national political institutions. The rapid pace of globalization and the emergence of

global institutions with mandates to promote and protect public goods such as human rights,

democracy and access to basic services have influence on national democratic governance

process (Cheema 2011).

Nationalistic values are integrated into society through the state elites. The existence prominent

'cronies' under Suharto's and how his regime tolerated periodic programs against the ethnic

Chinese. The industrial bourgeoisie posed little threat to the authoritarian system because they

were heavily dependent on the state for the accumulation of capital. The impact on the rise of

the middle class was the most significant in account of its periodic support for nationalistic

endeavours for democracy. They had primary concern over the financial well-being of the state

(Thompson 2011).

Veto Player Theory

Veto Player Theory is used to assess institutional capacity of governments in policy and

decision making (source). Policy and decision making, as analysed by veto player analysis,

requires the consent of actors known as “veto players” in order for a certain policy to be

approved. Rather than concentrating purely on government structures, which limits comparison

to only juxtaposing very similar institutional structures; veto player theory provides an alternative

analysis in policy and decision making, where the theoretical framework compares the ability of


19/49

“veto players” in approving or disproving a policy within government institutions (Tsebelis, 2004

& McIntyre, 2002). This alternative approach provides a wide variety of comparative

assessment beyond the usual multi party vs single party approach; presidential vs parliamentary

approach; and other similar constraints faced usually by comparative politics (Tsebelis, 2004).

The importance of the veto player theory is prominent. The concept of veto player theory can be

used to assess the responsiveness of a state in policy-making and decision making. According

to McKyntire (year), state responsiveness is dependent on the number of veto players. The

more veto players exist, the less likely a state could respond when needed due to gridlocks or

other sorts of politico-legal limitations (McIntyre, 2002).

Political Behaviour of Parties and Policy-Making

Political parties are a central feature of any democracy. They are the vehicles by which citizens

come together freely to campaign for public office, express their interests and needs, and definetheir aspirations for their society. While there are parties without democracy, there can be no

democracy without political parties. Parties in many countries may be flawed, but they are also

indispensable in democratic governance.

In Western democracies, political parties emerged at the end of an extended process,

growing out of craft guilds, professional associations, local government and interest groups. In

some developing countries, parties have grown around a particular leader or leaders or as the

outgrowth of a civic movement to change the governing system. These parties face the

additional challenges of developing and solidifying a party identity and constituency anddeveloping party discipline within the legislature. These parties in the legislature may have little

experience in being held accountable to voters and may have few resources to establish

internal party structures to organize legislative and policy-making processes.

In addition, modern political systems are often typologysed as multiparty (which may

result in majority or coalition governments), two-party systems and one-party systems. Most

countries currently have political party systems, with the exception of a few military regimes and

absolute monarchies. There are alternative democratic structures, such as the Uganda "no-

party" state. The type of party system influences the legislature in several ways, such as: first,whether a legislature exists at all or has any meaningful powers; second, the relationship among

political parties in the legislature; third, the legislature’s relationship with the executive; and

fourth, the legislature’s internal organization, stability and dynamics.

In this case, the role of the political party in the policy-making process has been minimalised

recently by scholars who find that socio-economic variables control the outcomes. Parties are


20/49

set up as straw men only to be knocked down and left to wither. The socio-economic variables

are infinitely more measurable than the elusive coalitions of office-holders who frequent the

statement of party strength-usually as the two-party division of the vote-has been dehumanized.

Results and Discussion Findings

Leadership Style

The researchers were able to find out that the Philippines and Malaysia underwent through a

soft-authoritarian type of leadership. According to Cumings' assessment, the main

characteristics of being under an authoritarian leader is wherein the sovereign power is

dependent on the ruler through a single-party rule, he/she can prohibit basic human rights (such

as the freedom of speech) and heavily depends on the military to control order. For the

Philippines, Mahathir, on the other hand, and such. (Cumings, 1999)

1. Japanophile Architectonic Leadership

Soft Authoritarian Leadership

Philippines Malaysia

Marcos had absolute control of the media,

and eliminated any opposing political parties

(Agoncillo, 1990).

There was a prevalence of weakened public

institutions like the media, judiciary; moreover,

opposing political parties existed but were

harassed by Mahatir.

Soft Authoritarian Leadership


strong presence of market intervention in the

economy due to the infrastructure projects

and spending

had a strong economic interference due to

different projects that aims to turn the country

from agriculturally-predominant economy into

an export-led industry. Mahathir also

incorporated property owning classes in

production oriented alliances.


21/49

Under this characteristic, the state make use of its bureaucratic capacities to advance the

production. For the Philippines, there was a. On the other hand, Malaysia also (Bina, 2008)

(Tadem, 2013)

2. Capacity for Effective Management of Private Economic Interests

According to Paderanga, most economies rely upon the private sectors to stimulate the

economic activity and growth. Private sectors are considered the centre of economic growth

because it promotes economic growth by providing revenue to the economy, establishing jobs,

and creating technology and innovation. For the Philippines, On the other hand, Malaysia,

(Paderanga, 2011) (Romero, 2011) (Shuib, 2001)

3. Powerful Professional Highly Competent Insulated and Career-based EconomicBureaucracy

According to Tandem, technocracy refers to the concentration of recruitment of people into

government because they possessed specialized knowledge in a certain field or in simple

words, primarily because of their expertise. For Malaysia,. (Hutnyk, 1998) (Asia Pulse, 2001)

Capacity for Effective Management of Private Economic Interests


there was no presence of an effective control

of private sectors.

re-energize the private sector to drive growth.

Powerful Professional Highly Competent Insulated and Career Based Economic Bureaucracy


The researchers found out that during Marcos'

administration, researchers and experts were

given privileges due to their increasing role in

the economy.

Mahathir deepened the researchers' and

experts' role in terms of infrastructure and

economic sector


22/49

Economic Policies

1. Shift from Agriculture-Oriented State to Export –Oriented Industrial State

GDP at current USD

Manufacturing, value added (current US)

0

27500000000

55000000000

82500000000

110000000000

1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999

Malaysia MPhilippines

1.2 Trillion

1 Trillion800 Billion600 Billion200 Billion400 Billion

LEGEND

--- Malaysia

--- Philippines


23/49

Manufacturing, value added (% of GDP)

Manufacturing, value added (annual % growth)

0

7500000000

15000000000

22500000000

30000000000

0

10

20

30

40


24/49

Exports of goods and services (% of GDP)

-15

-7.5

0

7.5

15

22.5

30

LEGEND

--- Malaysia

--- Philippines

LEGEND

--- Malaysia

--- Philippines


25/49

Exports of goods and services (annual % growth)

Exports of goods and services (current US$)


26/49

Research and development expenditure (% of GDP)

Scientific and technical journal articles


27/49

2. Successful Provision of Huge Welfare Services

GDP per capita

3. Progressive Commitment Towards Economic Growth and Transformation

Malaysia and Philippines: GDP (current US$)

0

1250

2500

3750

5000

1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000

Malaysia MYS GDP per capita (curPhilippines PHL GDP per capita (c


28/49

Malaysia and Philippines: GDP per capita(current US$)

4. Malaysia and Philippines GDP growth (annual %)


29/49

5. High Technology Exports (% of manufactured exports)

6.7. High- technology exports (current US$)


30/49

Agriculture, value added (current US$)

LEGEND

--- Malaysia

---


31/49

1. Embedded Autonomy/Independent Position of the State in

Consolidating Strength Against Civil Society and Private Sector

0

4500000000

9000000000

13500000000

18000000000

1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999

Embedded Autonomy/Independent Position of the State in Consolidating Strength Against Civil

Society and Private Sector


LEGEND

--- Malaysia

---


32/49

2. Determined Relatively Uncorrupt Developmental Elite

3. State Business Collusion with Intent to Hone the Competitiveness of Private Sector

4. Weak and Subordinated Civil Society

There are challenges and issues in

integrating the actions of central

government leadership, local

government leadership with the

actions of civil society and private

sector leadership

Formulated the National Integrity Plan

(NIP) that act as a master plan to

guide all of the above sectors

Determined Relatively Uncorrupt Developmental Elite


The Local Government Code of 1991

opened the door for greater

involvement of CSOs in governance

issues and concerns




State Business Collusion with Intent to Hone the Competitiveness of Private Sector


There are challenges and issues in

integrating the actions of central

government leadership, local

government leadership with the

actions of civil society and private

sector leadership





33/49

Colonial Imprint

1. Western-style Bureaucracy Institutionalised Within Government

Philippines:

the subordination of a poorly insulated state apparatus to elected municipal, provincial, and

national officials in the American colonial era (1900-1941) contrasted sharply with the

bureaucratisation and insulation of colonial states elsewhere in the region and combined with

the onset of what might loosely be termed ‘primitive accumulation’ to facilitate the emergence of

bossism in the Philippines in the early twentieth century. (Sidel, 1999)

Malaysia:

After the country’s independence in 1957, the new government introduced the British model of

parliamentary democracy in the political sphere and the Weberian bureaucratic model in the

administrative realm. The Malaysian government ensured the autonomy of public administration

and political non-interference through the creation of the public service commission assigned

Weak and Subordinated Civil Society


Civil society failed to influence the

public policy.

Civil Society Organizations (CSOs)

play an important role in the

democratization process, although still

subordinate under the Malaysian

government.

Western-style Bureaucracy Institutionalised Within Government


the subordination of the bureaucracy,

including the coercive apparatuses of

the state

Introduction the British model of

parliamentary democracy and the

Weberian-bureaucratic model in

Malaysian government


34/49

with the task of guaranteeing the merit principle and administrative efficiency. (Haque, Theory

and Practice of Public Administration in, 2007)

2. Colonial Influence in Agricultural Reform

Philippines:

Land distribution tended to become concentrated in landed elites and large masses of peasants

were displaced and became landless. This has contributed to a pattern of skewed land

distribution and entrenched and powerful landed elite. (Haque, Theory and Practice of Public

Administration in, 2007)

Malaysia:

The establishment of a rubber plantation required large investments, and therefore allowed only

foreigners or small groups of elite indigenous groups capable of providing such investments.

Palm oil was also of some interests after rubber markets weakened with WWI. Palm oil was

used in making soaps, margarine, lubricants, and fuel. By 1939, the peninsula supplied

approximately 11 percent of the world production.(Reisdorf, 2013)

3. Japanese Miracle-influenced Model of Development

Colonial Influence in Agricultural Reform


Concentration of distribution towards

land elites.

Malaysia adoption of british plantation

caused the production of different

agricultural products

Japanese Miracle-influenced Model of Development


Admiration to japanese policies led to

copying the

Malaysia adopted “look East policy” to

live the ways of the japanese.


35/49

In Philippines, Economic development became a source of soft power that made Filipino

observers look at Japan with admiration. “Economically developed” became the most frequently

mentioned characteristic of Japan, and many were inspired to scrutinize the factors that made it

possible. Moreover, many casual observers—and they were more in number than the frequent

and close observers, equated the manifestations of economic development, such as the

elevated highways, cars, and electronic gadgets, with Japanese culture. (Jose, 2006)

Malaysia implemented the Look East Policy programme; this policy aims to develop Malaysian

economy by changing the work ethics among the people of Malaysia through acquiring

technology, work ethics, and management philosophy by sending college students and

industrial technology specialists to Japan and South Korea. (Orenstein, 2009)

Values-System

1. Existence of Legitimacy in the Goals of the State

2. Highly Nationalistic and Organised Citizenry

Existence of Legitimacy in the Goals of the State


Bossism method of governance Rejection of universalism

Highly Nationalistic and Organised Citizenry


Initial compliance of civil society with

Marcos’ system but eventually

revolutionized because of the evident

materialization of corruption on his

administration

Mahatir maintained his authoritarian style

of governing and controlled civil society

from revolting.


36/49

3. Local Entrepreneurship Values Inculcated Among Individuals

Veto Play

1. Existence of a Single Agenda-Setter

2. Absence of a Strong Supreme Court

Local Entrepreneurship Values Inculcated Among Individuals


Open to the industrializing west

through export-led growth and

provided jobs to the Filipinos

Imposed a strong protectionist type of

government that encouraged the

locals to buy their goods over foreign

ones

Existence of a Single Agenda-Setter


Ferdinand Marcos as sole Agenda-

Setter of the Philippine government

UMNO Party under the strong

leadership of Mahatir as the sole

agenda-setter

Absence of a Strong Supreme Court


Supreme Court of the Philippinesrelegated into a “puppet institution”

under Martial Law

Independence of the High Court ofMalaysia compromised since Mahatir

and his UMNO party initiated

Operation Lalang


37/49

3. Small Number of Veto Players in Policy Formulation

4. Congruence and Cohesion of Collective Veto Players Towards Relevant Policies

Analysis:

Leadership Style

1. Soft Authoritarianism

Small Number of Veto Players in Policy Formulation


Marcos and his cronies as the onlygovernment officials that have a say in

policy-making

Mahatir and his close collegues as theonly government officials that have a

say in policy-making

Congruence and Cohesion of Collective Veto Players Towards Relevant Policies


Alliance of cronies towards Marcos

remained strong until the death of

Ninoy Aquino (Agoncillo, 1990).

Strong party alliance of UMNO

towards Mahatir until he resigned in

the early 2000s

Soft Authoritarianism



38/49

2. Japanophile Architectonic Leadership

Since the Philippines underwent through a

soft-authoritarian leadership, the country

ended up having a state capitalist type of

government wherein Marcos controlled almost

everything. The largest and most productive

and technically most advanced manufacturing

enterprises were gradually brought under the

control of Marcos's cronies. However, in the

latter years of his regime, Marcos started

losing control of his cronies and even civil

society; evident from the creation of the

Reform the Armed Forces Movement headed

by his close colleagues Juan Ponce Enrile

and Fidel Ramos; and the subsequent

manifestation of the People Power Revolution

(Romero, 2012; Kushida, n.d.; Agoncillo,

1990)

Centralized bureaucracy shared and

supported Mahatir's development visions to

ensure the benefit of public's interests. This

came at the expense of institutions; of which

several were weakend like the judiciary,

media and professional civil service. Mahathir

also used his almost unchallenged authority in

order to enforce his party's policies; the climax

of which during Operation Lalang of 1987,

where 106 persons – including prominent

politicians – were arrested under the pretext

of national security (Hussain, 1997; Knirch &

Kratzenstein 2010).

Japanophile Architectonic Leadership


During Marcos' administration, the Philippines

spent so much in terms of huge infrastructure

projects (example: San Juanico Bridge, CCP

Complex, etc.). The Philippines under Marcos

also conducted land reform where most of the

lands owned by hacienderos were transferred

towards the Filipino farmers within the

agricultural sector; at the same time,

agricultural growth however fell by 30% from

1972-1980 (Tadem, 2013 & Fuwa, 2000).

In Malaysia, there was a strong presence on

economic interference from the Malaysian

government in turning the country from

agriculturally-predominant economy into an

expert-led industry. Moreover, the state

incorporated property-owning classes in

production oriented alliances to further

increase its economic growth. (Shuib, Keling

& Ajis, 2009)


39/49

3. Capacity for Effective Management of Private Economic Interests:

4. Powerful Professional Highly Competent Insulated and Career-Based EconomicBureaucracy:

Capacity for Effective Management of Private Interests


In the Philippines, Marcos's administration

did not have the full capacity to manage

private interests in the latter part of his

administration. Instead, private interests -

mostly also part of Marcos's cronies were

greatly privileged under the spoils system

encouraged by the Marcos administration

(Cariño, 2002 & Agoncillo, 1990).

In Malaysia, Mahathir promoted the a form

of race-based privatisation equity policy

under the NEP. This came at the expense of

non-Bumiputra owned businesses.

Ownership share of bumiputras went up

from 2.4% in 1970 to 19.3% in 2000.

Mahatir was strongly criticised by this, with

general accusations stating that the NEP is

heavily biased towards Bumiputra-ownedbusinesses (Shuib, 2001; Siong, 2008; Kim,

2007).

Powerful Professional Highly Competent Insulated and Career Based Economic

Bureaucracy



40/49

Economic Policy

Marcos increased the stature of

technocrats and developmental elite within

the government. Technocrats, under

Marcos administration, became key

economic players and great influencers

partially due to their links with international

financial institutions. However, the

technocrats under Marcos's slowly

transformed into cronies in part due to the

spoils system were greatly encouraged by

Marcos, where his close confidents were

greatly favored in important government

positions. (Romero, 2012 & Tadem, 2013)

Te ch n o c ra t s f u l l y a ssu me d t h e

responsibility for realizing the national

development visions set forth and shared

with political leaders. They obligingly

engaged itself at multiple levels to make

these visions a reality. Technocrats have

taken consistent steps to establish and

upgrade development machinery for

national planning as a means to realize

the vision of economic development. A

strong shared sense of urgency over

wanting to establish a united Malaysian

nation, a country of peoples ethnically

integrated and living in harmony and

partnership reinforced the public's ability

to accept the role of technocrats bringing

this overriding policy objective to fruition.

(Formulation and Enhancement of

the Development Administration System in

East Asia: Thailand, Malaysia and the

Philippines, n.d. & Shuib, 2001)


The researchers found out that during Marcos'

administration, researchers and experts were

given privileges due to their increasing role in

the economy.

Mahathir deepened the researchers' and

experts' role in terms of infrastructure and

economic sector


41/49

The GDP of the Philippines represents the 0.40 percent of the world economy, the country had an

average of 56.1 USD Billion from 1960 until 2012. The GDP of Malaysia meanwhile had

expanded by 5 percent in the third quarter of 2013. The New Economic Policy (NEP) was

launched in 1971 as a temporary measure which eventually became a central to a system ofcorrupt patronage. Both Malaysia and the Philippines has been giving efforts to improve the

standard of living of their communities and for the past three decades they have refocused their

efforts on human factors. The NEP, though aims to improve the Bumiputra race with preferences

in university admissions and for civil-service jobs. The Philippines enjoyed its development post

World War II, becoming the most developed country in Asia. However, it was left behind by its

Asian neighbors because of poor economic growth, overpopulation and political instability. The

Philippines benefits the most in remittances estimated at US$ 6-& billion annually from overseas

Filipino workers. Its major economic activities are agriculture, light industry and supporting

services. Malaysia had transformed since 1971 from a producer of raw materials into an

emerging multi-sector economy. Exports, particularly electronics exclusively contributed to the

country’s economic growth. To a great extent, the relative lack of progress in improving poverty

indicators in the Philippines can be attributed to the country's poor growth performance.

Economic growth in the Philippines has been dampened by economic policies that favored

capital over labor and import-substituting industries over agriculture, and that led to

underinvestment in the human capital of the poor.

Role of Civil Society and Private Sector

There were determined and relatively uncorrupt developmental elites in the Philippines during

Marcos Regime. Marcos increased the stature of technocrats and developmental elite within the

government. Technocrats were part of the government. This resulted in power being limited to,

and hoarded by, cronies who faithfully obeyed his word. Technocrats, under Marcosadministration, became key economic players and great influencers partially due to their links

with international financial institutions. However, the technocrats under Marcos's slowly

transformed into cronies in part due to the spoils system were greatly encouraged by Marcos,

where his close confidents were greatly favoured in important government positions and the

economic development during the Marcos’ Regime is not present in the current status of the


42/49

Philippines. This is because of the different political leaders after Marcos. Former Presidents

became corrupt and so are the Elites.

Colonial Imprint

1. Western-style Bureaucracy Institutionalised Within Government

2. Colonial Influence in Agricultural Reform

Western-style Bureaucracy Institutionalised Within Government


The influence of the Americans in terms of

Western Style Bureaucracy in the Philippines

has been very poor. There are still red tapes

that need to be studied and taken care of.

The influence of the British model of

parliamentary democracy has been effective

for Malaysia. The Malaysian government

ensured autonomy of public administrationand political non-interference through the

creation of the public service commission

assigned with the task of guaranteeing the

merit principle and administrative efficiency.

(Haque, Theory and Practice of Public

Administration in, 2007)

Colonial Influence in Agricultural Reform


Unequal Land distribution is still evident in the

Philippines. Land distribution still favours to

elites because they have the ability to pay.

Through the establishment of these

plantations, Malaysia achieved tremendous

economic growth. Malaysia remains one of

the world's leading exporters of rubber andtimber and produces almost half the world's

palm oil. It also helped keep unemployment

low.


43/49

3. Japanese Miracle-influenced Model of Development

Values System

1. Existence of Legitimacy on the Goals of the State

Both the Philippines and Malaysia's desire was to further develop, in result, civil society had little

involvement in the goals of the government because both countries applied strong methods of

governance, Bosissm, for Marcos and the rejection of universalism for Mahatir. (Cuunjieng ND)

2. Highly Nationalistic and Organised Citizenry

Japanese Miracle-influenced Model of Development


Economic development in Japan indeedinspired the Phi l ippines to become

modernized. After the Japanese sudden

economic boom, Philippine strives to copy

what Japan has done and it has become

somehow evident in the Philippines, with the

different electronic gadgets, Cars, Highways,

etc.

Look East Policy has definitely Malaysian economy to develop by changing the work

ethics among the people of Malaysia through

acquiring technology, work ethics, and

management philosophy by sending college

students and industrial technology specialists

to Japan and other East Asian countries. This

policy has been relevant to expansion of

bilateral relations between Japan and

Malaysia.

Existence of Legitimacy on the Goals of the State


Highly Nationalistic and Organised Citizenry


44/49

Since development flourished during Marcos and Mahatir's regime, nationalism spread amongst

the citizenry. Initially, n. On the flip side,

3. Local Entrepreneurship Values Inculcated Among Individuals

The Philippines and Malaysia invested on private sectors to encourage civil society to consume

and support their industries and Marcos’ provision of capital for local entrepreneurs.

Veto Play

1. Existence of a Single Agenda-Setter


Civil society complied with Marcos’ system but

eventually revolutionised because of the

evident materialisation of corruption on his

administration

Mahatir maintained his authoritarian style of

governing and controlled civil society from

revolting.



The Philippines and Malaysia invested on

private sectors to encourage civil society to

consume and support their industries and

Marcos’ provision of capital for local

entrepreneurs.

The Philippines and Malaysia invested on

private sectors to encourage civil society to

consume and support their industries and

Marcos’ provision of capital for local

entrepreneurs.

Existence of a Single Agenda-Setter



45/49

2. Absence of a Strong Supreme Court

3. Small Number of Veto Players in Policy Formulation

4. Congruence and Cohesion of Collective Veto Players Towards Relevant Policies

Marcos during the first half of his

administration had absolute control in

determining the policies of the government.

This significantly changed, however, when

Marcos’ health started deteriorating, in which

his close colleagues – and even his wife,

Imelda Marcos - took partial charge of

handling government affairs.

Mahatir maintained control both within his

political party and the government until he

resigned in the early 2000s. Through this,

Mahatir’s UMNO party remained as the sole

agenda-setter during his entire regime.

Absence of a Strong Supreme Court


Suprem Court remained a puppet of Marcos

for his entire regime.

High Court of Malaysia continuously

challenged by the UMNO Party.



Marcos and his cronies are the only officials

that have a say in policy-formulation

Mahathir and his close colleagues are the

only officials that have a say in policy-

formulation




46/49

Conclusion

We have able to identify the different theoretical benchmarks of a NICs, and therefore it would

help give us an in-depth standard on how a country in considered as a NICs. For this study, we

were able identify at least three to four benchmarks on each variables, thus, we were able to

successfully compare the Philippines and Malaysia’s economy.

With each variable provided, it gave us an overview of the empirical transition of the Philippine

and Malaysian economy Furthermore, we were able to compare their economic policies and

identify their differences that may have resulted to either the success or failure of the countries

respective economy.

Finally, both the Philippines and Malaysia have comply to some extent to the theoretical

benchmark of a NICs. However, both of the countries at some point failed with economic

strategy and at times they have succeeded.

Based on our research, the Malaysian economy had certainly achieved its NICs stage, hence,

they are considered as one of Asia’s rising tigers. For the Philippines on the other hand, its

Economy has remained on the balancing act. The country is reach, resource wise, unfortunately,

the government has been using unsuccessful strategies and therefore, were somehow left behind

by its gigantic neighbours.

References

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Cronies of Marcos remained loyal only

through bribery and other politico-economic

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Strong political alliance of UMNO towards

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Gomez, E.T. and

Nadevco Paper Final Draft

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