Template-Type: ReDIF-Paper 1.0 Author-Name: Gerardo P. Sicat Author-Name-First: Gerardo Author-Name-Last: Sicat Author-Workplace-Name: School of Economics, University of the Philippines Diliman Title: Revising Economics for the Next Generation Abstract: The revision of Economics, a textbook in elementary economics, using the Philippines as the basis of the study material, will be available in academic year 2003-4. The paper begins with a review of the antecedents of the efforts at the University of the Philippines School of Economics to improve economic teaching materials in the country. The first part – elementary economics – builds on the concepts of the markets and on the law of supply and demand and illustrates the principles with actual life situations and economic policy applications. Different forms of market structures are discussed and departures from competition are related to problems of industrial policy, taxation, regulation of monopoly and competition policy. The second part – macroeconomics – deals with the open economy. Ignoring the usual step by step procedure of the closed economy until it opens to trade and payments, the analytical structure goes head-on with an economy operating in the presence of government fiscal operations and of international trade and payments. Monetary and exchange rate policy enters the analysis to complete the macroeconomic framework. The final part – Philippine economic development issues – covers separate chapters on economic growth and productivity, foreign direct investment, agriculture, rice economics, land reform, micro-financing for the poor and small businesses, and commercial development. In addition, it ends with a review of economic systems. Separate topics on income distribution, poverty, population, and industrialization policy were merged into the elementary economics part of the book as were saving and financial development in the macroeconomics part. Unlike the first book, the revised edition will be released around May, 2003 in three volumes. Each tract can be separately used for specific courses in introductory and intermediate Economics – Volume 1: Elementary Economics; Volume 2: Macroeconomics; and Volume 3: Philippine Economic and Development Issues. Length: 13 pages Creation-Date: 2003-01 Publication-Status: Published as UPSE Discussion Paper No. DP 2003-01, January 2003 File-URL: http://www.econ.upd.edu.ph/dp/index.php/dp/article/view/104/98 File-Format: Application/pdf Number: 200301 Keywords: Elementary economics, Philippine economy, economic education, economic development, Philippines Handle: RePEc:phs:dpaper:200301 Template-Type: ReDIF-Paper 1.0 Author-Name: Raul V. Fabella Author-Name-First: Raul Author-Name-Last: Fabella Author-Workplace-Name: School of Economics, University of the Philippines Diliman Title: Comprehensive Agrarian Reform Program and the Coase Theorem Abstract: The prohibition of the sale or usufruct of land under the Comprehensive Agrarian Reform Law has, in effect, destroyed the legal land market and, in its wake, the legal rural credit market. These markets have gone underground resulting in very high transaction cost and bankruptcy to farmers. Section 27 of CARL contravenes a beautiful results in Economics called the Coase Theorem. Reforms suggested are analyzed in the light of this theorem. Length: 10 pages Creation-Date: 2003-03 Publication-Status: Published as UPSE Discussion Paper No. 2003-02, March 2003 File-URL: http://www.econ.upd.edu.ph/dp/index.php/dp/article/view/105/99 File-Format: Application/pdf Number: 200302 Handle: RePEc:phs:dpaper:200302 Template-Type: ReDIF-Paper 1.0 Author-Name: Edita A. Tan Author-Name-First: Edita Author-Name-Last: Tan Author-Workplace-Name: School of Economics, University of the Philippines Diliman Title: Cost of Degree Programs in the University of the Philippines Abstract: The paper is part of a larger study on normative financing, an alternative scheme to the ad hoc and highly politicised budget allocation process for state universities and colleges (SUC) currently in use. Normative financing requires, among other data, per student cost benchmarks or norms for major program categories by which to set the budget for each SUC. The norms will be derived from cost analyses of programs categorized by field, degree level and quality. The paper estimated the cost of completing each of 33 selected degree programs in the University of the Philippines' four major campuses. They include the fields that each campus specializes in such as electrical engineering in Diliman, agriculture and veterinary medicine in Los Baños, medicine and nursing in Manila and fisheries in Visayas. It applied the curriculum-based methodology developed by the DLSU–Posadas–Nuqui Researchers. All undergraduate degree programs in the country contain general education courses offered outside the department in which a student majors. Program cost therefore includes the cost of courses taken in one's department and in other departments. Direct cost of instruction is delineated from indirect cost. Direct cost consists of compensation to faculty assigned to teaching plus supplies and other materials used for instruction. Indirect cost includes administrative cost and various student services. It is noted that in UP, administrative cost is incurred in each layer of its organization - the UP system, the campus and the college. Program cost varies substantially, ranging from P99,000 to P775,000. The variation couldbe explained by variation in the curricular content, teaching technique and utilization rate. The 7-year medical program expectedly costs more than most other programs; the laboratory-based programs in natural sciences and engineering cost more than the book-based social sciences. Nevertheless, utilization rate appears to be the most significant determinant of program cost. Indirect costs absorb a larger share of program cost than direct costs. The paper proceeded to compare program costs in UP with those in the 6 universities studied by the DLSU researchers. For each field, the cost differed between universities apparently because of variation in quality and utilization rate. Indirect cost was also substantial in the other universities. The paper suggests possibilities for trade-offs of indirect cost for direct cost as a means of improving quality. Finally the paper recommended the adoption of UP's statistical system which provides an adequate basis for cost estimation and analysis. Length: 47 pages Creation-Date: 2003-05 Publication-Status: Published as UPSE Discussion Paper No. 2003-03, May 2003 File-URL: http://www.econ.upd.edu.ph/dp/index.php/dp/article/view/106/100 File-Format: Application/pdf Number: 200303 Keywords: Higher education finance, SUCs in the Philippines, cost estimation of education Handle: RePEc:phs:dpaper:200303 Template-Type: ReDIF-Paper 1.0 Author-Name: Dante B. Canlas Author-Name-First: Dante Author-Name-Last: Canlas Author-Workplace-Name: School of Economics, University of the Philippines Diliman Title: Economic Growth in the Philippines : Theory and Evidence Abstract: Economic growth in the Philippines is studied using Robert Solow’s neoclassical growth model, which predicts savings and population growth to have positive and negative effects, respectively, on growth of per capita output. The empirical results tend to support the predictions of the model, but some limitations are evident. Human capital or education, which underpins technological progress, shows the expected sign but is not statistically significant. This suggests the need for some extensions of the Solow model, say, along the lines of endogenous growth theory. From a policy standpoint, the results suggest that raising savings, investments, and human capital, and slowing down population growth, continue to be well advised. Length: 16 pages Creation-Date: 2003-06 Publication-Status: Published as UPSE Discussion Paper No. 2003-04, June 2003 File-URL: http://www.econ.upd.edu.ph/dp/index.php/dp/article/view/107/101 File-Format: Application/pdf Number: 200304 Keywords: Solow growth model, steady state, savings, investments, human capital Classification-JEL : I11, I12, I21 Handle: RePEc:phs:dpaper:200304 Template-Type: ReDIF-Paper 1.0 Author-Name: Raul V. Fabella Author-Name-First: Raul Author-Name-Last: Fabella Author-Workplace-Name: School of Economics, University of the Philippines Diliman Title: Beyond EDSA : A Quiet Revolution at Commonwealth Avenue Abstract: On the 20th anniversary of “Ninoy” Aquino’s death, we revisit the alignment of forces and beliefs at EDSA ’86 and argue how the powerless state became the historic compromise struck among mutually distrusting and loathing partners. The 1987 Constitution, bearing the brunt of these fissures, reaffirmed the powerless state. The hope was that the unresolved contradictions will be leapfrogged with the delivery of the democratic dividends. The powerless state, however, of itself and apart from pure bouts of luck did not deliver these dividends. With crises come external pressures to change but whose outcome is reversible; with crises also come demagogues promising nirvana at the end of the rainbow to justify a power grab. Incapacity to punish means that the next coup is not a question of whether but a question of when. But there could also emerge demiurges demanding attention not with empty promises but with a history of tangible beneficial facts-on-the-ground. The stirrings in “Commonwealth Avenue,” which followed “Baclaran” which followed “Riverbanks, Marikina” have the smell and feel of a new order, a new ethic and a new technology. The paper explores how state power got locally transformed into a rich harvest of public goods resulting in a positive feedback loop and how this loop may be scaled up. EDSA failed to find closure in the powerless state. Will it find closure in Commonwealth Avenue? Length: 16 pages Creation-Date: 2003-09 Publication-Status: Published as UPSE Discussion Paper No. 2003-05, September 2003 File-URL: http://www.econ.upd.edu.ph/dp/index.php/dp/article/view/108/102 File-Format: Application/pdf Number: 200305 Handle: RePEc:phs:dpaper:200305 Template-Type: ReDIF-Paper 1.0 Author-Name: Renato E. Reside, Jr. Author-Name-First: Renato Author-Name-Last: Reside, Jr. Author-Workplace-Name: School of Economics, University of the Philippines Diliman Title: Incentives in Contracts for Public Sector Projects with Private Sector Participation Abstract: Optimal contracts are derived from a simple model where government guarantees two types of private investors participationg in infrastructure projects. With asymmetric information, investors are offered a pair of incentive-compatible contracts covering production, tariff, and guarantee coverage. Both contracts offer identical production quantities, but the contract designed for high risk investors offers over-insurance and tariff below marginal cost, while the contract designed for low risk investors offers under-insurance with tariff above marginal cost, while the contract designed for low risk investors offers under-insurance with tariff above marginal cost. This benchmark outcome may motivate solutions to adverse selection, incentive and risk-sharing problems in contracts involving private sector participation in infrastructure development projects in the Philippines. Length: 32 pages Creation-Date: 2003-10 Publication-Status: Published as UPSE Discussion Paper No. 2003-06, October 2003 File-URL: http://www.econ.upd.edu.ph/dp/index.php/dp/article/view/31/26 File-Format: Application/pdf Number: 200306 Classification-JEL: H54, H87, D81, D82 Keywords: Private sector participation, infrastructure, incentives, adverse selection Handle: RePEc:phs:dpaper:200306 Template-Type: ReDIF-Paper 1.0 Author-Name: Gerardo P. Sicat Author-Name-First: Gerardo Author-Name-Last: Sicat Author-Workplace-Name: School of Economics, University of the Philippines Diliman Title: The Philippine Economy During the Japanese Occupation, 1941-1945 Abstract: Few studies have analyzed the Philippine economic experience during the Japanese occupation. Although such studies are in the nature of history and commentaries, they have not focused on the economic analysis of the war experience. The present study hopes to close this gap if only partially by recounting what was known about the course of the economy. A recently discovered intelligence document written late in wartime by American sources on economic changes during the occupation period provided the initial impetus for the review. Relying on limited relevant work to make an assessment of this intelligence report, the author carries the discussion to modern day interpretation covering the various sectors of the economy. In the final part of the paper (Part IV), the Philippine economy is compared before and after the end of the war, investigating the extent of the fall in national output by the war’s end, quantifying the extent of the hyper inflation that was experienced in the course of the war, and approximating the relative value of the economic damage (mainly to capital stock) caused by the war in terms of the level of national output. Using intuitive knowledge based on the review of these sectors and employing conservative assumptions about the Philippine economy, the author suggests that at the end of the war, national output was at least 30 percent of the level of the prewar output. In effect, total output in 1945 was 70 percent lower than that of 1940. Going to the estimate of the war damage in today’s current terms (2003), the economic loss (not including human, of course) suffered during the war was equivalent to 13 percent of the current GDP of 2003. Translating this to the output of 1940 on the very conservative assumption that there was no growth of per capita output over the years, the economic loss from the war was 62 percent of the GDP of 1940. Since the economic damage to capital happened over time and furthering the output loss as the war went on, these estimates conform to the assessment that Philippine GDP in 1945 – at the end of the war – was close to 30 percent of the output of 1940. Length: 40 pages Creation-Date: 2003-11 Publication-Status: Published as UPSE Discussion Paper No. 2003-07, November 2003 File-URL: http://www.econ.upd.edu.ph/dp/index.php/dp/article/view/109/161 File-Format: Application/pdf Number: 200307 Keywords: Philippine economy, Philippine economic history, Philippines during World War II, Japanese occupation of the Philippines, economic damage from war Handle: RePEc:phs:dpaper:200307 Template-Type: ReDIF-Paper 1.0 Author-Name: Benjamin E. Diokno Author-Name-First: Benjamin Author-Name-Last: Diokno Author-Workplace-Name: School of Economics, University of the Philippines Diliman Title: Decentralization in the Philippines After Ten Years: What Have We Learned? What Have I Learned? Abstract: no abstract Length: 22 pages Creation-Date: 2003-12 Publication-Status: Published as UPSE Discussion Paper No. 2003-08, December 2003 File-URL: http://www.econ.upd.edu.ph/dp/index.php/dp/article/view/32/27 File-Format: Application/pdf Number: 200308 Handle: RePEc:phs:dpaper:200308