About Per SE

Commentary and research on current events and public policy by economists from the University of the Philippines
Monthly archive December 2012

If it ain’t broke, don’t fix it

What is the best high school in the country? The Philippine Science High School (PSHS) .So why all of a sudden has its Board of Trustees (BOT) decided to extend its high school course from the present four years to six years?

The robust Nash equilibrium and equilibrium selection in 2×2 coordination games

( with Vigile M. B. Fabella) We propose an equilibrium concept, the Robust Nash equilibrium (RNE), that combines best-reply rationality and the "first-mover invariance" condition.

What determines trust?

(with John V.C. Nye (1), Gregory Androuschak (2),Garett Jones (4), Maria Yudkevich (5)) Human capital positively affects the propensity to trust, and its contribution appears larger than the combined effect of other omitted variables including, plausibly, social and environmental factors.

Reforming institutions and building trust to achieve sustained economic development

Focusing solely on anti-corruption may undermine lasting institutional reform if property rights, credibility and stability are weakened in the course of enforcing against anomalous transactions. An optimal strategy may be to treat anti-corruption as part of a larger overall framework of building trust in society

Why the poor have many children

(with Katrina Dinglasan) The poor see see little opportunity for their children’s education and so have little interest in controlling family size. For them it does not matter how many children they may bear since the intensity of their poverty improves only marginally with fewer children. It is suggested that for a family planning...

Wipeout: Sangley mercantile dominance and persistence in the Spanish Colonial period in the Philippines

We explain the persistence of the mercantile dominance of Sangleys via the forces serving to curve abuse of market power and non-assimilation of winning Sangley traits by non-Chinese following the Akerlof-Kranton identity economics.

Signaling and contract cost under weak governance: Water service privatization in Metro-Manila

We show using a modified Laffont-Tirole cost-reimbursement contract model that the more reliable is the state in respect to the delivery of its contractual obligations, the lower is the cost of contracts to the state and society.

Peso appreciation and the economy (once again)

The peso appreciation is unjustifiable from the viewpoint of the economy’s high unemployment and poverty situation. The outcome is not founded on market fundamentals but on aberrations arising from the bounty that we experience from recent positive economic news and continued high level of remittances.

Pablo and Pabillo

Comes now Typhoon “Pablo,” whose arrival was announced well in advance. And the fatalities could even reach over 700 if the persons reported missing turn up dead. Tragedy, indeed, if one considers that most of those deaths could have been avoided—had the local governments done their jobs.

Sizing up the Philippines

"Why nations fail" has made a lot of people all over the world sit up and take notice. Its thesis is that the difference between prosperous and poor nations, is due to differences in their economic institutions which are in turn shaped by political institutions, which may also be inclusive or extractive.

Tax policy inconsistency

Policy makers choose to ignore the basic tenets of taxation. Congress, and with the concurrence of the President, continues to grant tax exemptions, thereby enlarging the huge hole in the tax base. Another case where politics triumph over economics.

Growth without change

GDP grew 7.1% in the third quarter of 2012, and an annual growth of 6.0% is easily within reach. But the next question is whether this year’s expansion would be the beginning of a sustained, inclusive, growth.