This rejoinder is written for a pedagogical purpose: this is a rare and delicious opportunity for our students current and past to learn from an actual methodological debate sparked by the above-mentioned paper. I did not want to drag the conversation in the Ayala-UPSE Lecture series into the minutiae of methodological hairsplitting, to which Dr. Fermin Adriano my discussant objected. But debate drives improvement and clarity, and may also reveal fallacies. Aspiring and budding social scientists may learn a thing or two about research if this debate is joined. I thank the critics for bearing down on the paper.

1. The claim in the original paper (Fabella 2013) is that CARP redistributes poverty. The numbers I use are not my concoction. And those numbers (e.g., 54% poverty incidence among ARC ARBs) look like indictments of CARP. The critics have not disputed the ugly numbers. Nor do they explain them. They have disputed the comparators used. Every scientific statement is falsifiable by definition. But there are rules for falsification/refutation. It is not a free lunch. When an empirical claim is made  and some critic says I don’t like your numbers (in this case, your comparators) for some reason, that does not constitute falsification. The critic must come up with an alternative number (comparators), that is more defensible. If not, the objection is just a conjecture. Conjectures don’t falsify. In the language of game theory, they are just “cheap talk.” And, in the practice of game theory, only fools pay attention to cheap talk.

Now the number in question is 54% poverty incidence among ARBs in ARC which could be higher for non-ARC ARBs. The critics don’t like the use of the comparator 2009 FIES PI among farmers (36% versus 54% PI for ARC in 2111 ) because FIES is national in scope,  while the ARCs are local. So let them produce the better comparator number?  Perhaps one for each ARC locality. What do we get instead? The critics say we need more studies! Haven’t we heard that before? Yes, though it may not be the case here, that sounds very much like the familiar excuse by status quo advocates who exploit the well-known “status-quo bias” noted by Kahnemann and Tversky. That is a prescription for inaction to block progress. And if the study does not deliver the desired result, we can always find some violation of certain research tenets to perhaps conduct even more studies. Ad nauseam?  If there is no better number proffered, the objection is not a falsification; it is just cheap talk!

2. The  54% poverty incidence is appalling whatever the comparator! It could even be higher if we include non-ARC ARBs. The critics say that that number is objectionable because it is only for one year. So, produce a number for another year that shows differently. No? More studies? Then it is just cheap talk.

3. How about the productivity drop in coconut and sugar being smaller among ARC ARBs, the pampered lot which constitutes 54% of the ARBs. Those are not interpretations. It could be worse if one includes the non-ARC ARBs.  Again this is objectionable to critics because it refers only to one year, 2011. So, produce the better numbers for another year (years) showing the opposite. No?  More cheap talk!

4. How about  the fact that  being an ARC member or an ARB explains nothing about the per capita income difference (APPC 2008 regression, not mine) suggesting that these costly programs are useless for per capita income advancement and are better transformed into direct grants? Has that been refuted?  No. More cheap talk!

5. The proper rule in every government program should be: “Every program must prove its worth unequivocally or be discontinued.” CARP has had 25 years to prove its worth, and the numbers continue to look bad.  CARP was extended in 2009 without the unequivocal proof of success. No such proof exists in 2014. And now they demand even more studies. More cheap talk

6. Let it not be forgotten that the burden lies upon those who lean towards CARP extension to prove that the program succeeded unequivocally. They haven’t done that.

7. But there is a more important methodological issue.  To demonstrate CARP is a success, advocates should use the correct counterfactual. The correct counterfactual is really a Philippine agriculture with no CARP.  Thus, among others, no CARP-induced credit-crunch in the agricultural sector. I await the results of the study by advocates making  comparisons using the correct counterfactual. Since that wait could last forever,  CARP should be let go now.

Truth be told, both the APPC 2008 study and the ALDA use an attenuated comparator – the use of non-ARBs and/or  non-ARC members. But these are themselves also victims of the credit crunch due to CARP and have had to go underground for financing.  The use of non-ARBs and/or non-ARCs is a compromise which lowers the bar.

There are really two bars: the higher one set by the correct counterfactual and the lower one set by the tainted and compromise counterfactual. If you show that CARP falls below the lower bar,  that is sufficient to discredit it. Game over! If you show that CARP hurdles the lower bar, you haven’t shown that CARP is a success. Even had the APPC study and ALDA shown CARP results better than attenuated benchmark results, these would not have been sufficient to prove CARP a success. It is necessary to show that CARP exceeds the higher bar to be a declared a success. Any derivative calculations using the APPC and ALDA counterfactuals do not prove success. If such inference is made (as is done in some column and some fora) that is wrong! By contrast,  they (the attenuated counterfactuals) can prove failure. What in fact comes out is that CARP fails even the lower bar! The advocates of extension are bound by the rules of logic and evidence to show that CARP exceeds the higher bar from the correct counterfactual in their exercise. I await their numbers. Or we are back to calling for more studies?

8. CARP is a social justice program and should be viewed that way. There are many ways to serve social justice that do not result in impoverishing the intended beneficiaries. That social justice can be served only by a combination of land redistribution and asset ceiling is the fallacious dogma of the CARP religion. For example a tax on land which is earmarked for the education of farmer children. Another example: redistribution of assets but allowing land asset to be traded as counsels the Coase theorem and redistribution but with no 5 hectares ceiling. The studies cited below show that other modalities work better than the CARP modalities. Even if CARP lowers the incidence of social strife, as some have hypothesized, it does not mean that a more cost-efficient social justice program will not do the same or even better! You still have to show that CARP (land redistribution and land ceiling) is the most cost-efficient approach.

9. Why not just re-tweak CARP? Produce a CARPEREST after CARPER?  This is what HB 3305 wants to do. The following  quote on insanity sometimes ascribed to Einstein applies here: “Insanity is to do exactly the same thing over and over again and to expect a different result.”

10. The comparisons made in the paper is on household and farm level productivity and welfare. They do not consider foregone growth in agricultural value-added  because of CARP. CARP has frozen private capital investment in agriculture (we have shown that the bank loan share of agriculture has dwindled to insignificance). That cost due to the investment crunch could be much higher and may be driving persistent rural poverty.  A lot of resources for example are tied down by protracted litigations over land valuation. So much fertile lands are left uncultivated to skirt CARP. And meaningful investment is hardly happening/ stagnant because of property rights uncertainty and lack of scale-up possibilities.

11. That CARP is redistributing poverty stands. Cheap talk does not disprove it.

12. I have looked at land reform experiences in other countries for guidance and to check whether the observations made in the paper are unique to the Philippines (“CARP without Coase, 2009). They are not! The conclusions in these studies are unequivocal: It is not land redistribution and land ceiling (which is CARP) that advances farmer welfare;  such tenancy reform programs as strengthening the bargaining power of tenants in tenancy relations do unequivocally better. CARP is land distribution and ownership ceiling. Examples are the following:

  • Poverty Reduction and Land Reform:

Besley and Burgess (2000) ran regressions of an index of land reform by state based on number of legislated reforms lagged four periods, for each state against (a) poverty headcount and  poverty gap measures both based on average (per capita expenditure that attains the nutritional norm) and (b) productivity measured as per capita state domestic product, per capita overall state domestic product using state level panel data from 16 states from 1958 to 1962. They found  that while the aggregate land reform measure robustly reduces the urban-rural poverty gap and head count poverty controlling for other influences, this result is accounted for only by tenancy reform and the abolition of intermediaries! Land ceiling imposition and redistribution as well as consolidation of fragmented plots have no effect on poverty reduction!  (see  “CARP without Coase”, Fabella, 2009)

Concluded Besley and Burgess (2000):

Impacts on poverty therefore appear to be coming mainly through reforms that affect production relations but do not directly alter the distribution of land… Thus the idea that the major impact of land reform on poverty reduction must come mainly through mechanisms that did not involve land redistribution gains further support.”

  •  Productivity and Land Reform: Ghatak and Roy (2007):

Controlling for other influences, Ghatak and Roy found that cumulated land reform measure lagged four years was significant and negative for productivity (yield/ha) but this result is driven by the negative and significant impact of land ceiling and redistribution. By contrast, neither tenancy reform or abolition of intermediaries had such a negative impact. Once more, the land ceiling and redistribution reform drives the fall in productivity!  (see e.g., “CARP without Coase”, Fabella, 2009).


I thank the critics for triggering a deeper examination of the thesis. This deeper reflection has shown that the central core of the thesis is robust against the criticisms levelled. Those who object to the counterfactuals used have not come up with better counterfactuals and have retreated to the familiar refuge of status quo advocacies: “more studies.” Those who claim that CARP is a success should demonstrate it using the correct counterfactual. They have not done that. If they fail to do that, the objections constitute only “cheap talk.” CARP is redistributing poverty and CARP should be let go.