The Myth of “Kung Walang Corrupt, Walang Mahirap”

Deconstructing the myth of “kung walang corrupt, walang mahirap”. I am so sick of this yarn that I had to come up with visuals that explain the concept in plain and simple terms.

Pre-Colonial Philippines

In the beginning – there was no corruption.  Everyone had equal access.

Before the Spaniards came to the Philippines, Filipinos lived in villages or barangays ruled by chiefs or datus. The datus comprised the nobility. Then came the maharlikas (freemen), followed by the aliping mamamahay (serfs) and aliping saguiguilid (slaves).

However, despite the existence of different classes in the social structure, practically everyone had access to the fruits of the soil. Money was unknown, and rice served as the medium of exchange.

The Spanish Occupation

The Encomienda system radically redistributed land creating a class of landowners and landless tenants.


When the Spaniards came to the Philippines, the concept of encomienda (Royal Land Grants) was introduced. This system grants that Encomienderos must defend his encomienda from external attack, maintain peace and order within, and support the missionaries. In turn, the encomiendero acquired the right to collect tribute from the indios (native).

The system, however, degenerated into abuse of power by the encomienderos The tribute soon became land rents to a few powerful landlords. And the natives who once cultivated the lands in freedom were transformed into mere share tenants.

When the First Philippine Republic was established in 1899, Gen. Emilio Aguinaldo declared in the Malolos Constitution his intention to confiscate large estates, especially the so-called Friar lands.

However, as the Republic was short-lived, Aguinaldo’s plan was never implemented.

The American Period

The Americans did not return the land  to the original landowners as well. Instead, they introduced the Torrens system – thereby preserving, even expanding the institutionalized landgrab of the landholders.

  • Philippine Bill of 1902 – Set the ceilings on the hectarage of private individuals and corporations may acquire: 16 has. for private individuals and 1,024 has. for corporations.
  • Land Registration Act of 1902 (Act No. 496) – Provided for a comprehensive registration of land titles under the Torrens system.
  • Public Land Act of 1903 – introduced the homestead system in the Philippines.
  • Tenancy Act of 1933 (Act No. 4054 and 4113) – regulated relationships between landowners and tenants of rice (50-50 sharing) and sugar cane lands.

The Torrens system, which the Americans instituted for the registration of lands, did not solve the problem completely. Either they were not aware of the law or if they did, they could not pay the survey cost and other fees required in applying for a Torrens title.

The introduction of the first bureaucracy that administered the property regime was created. There was petty corruption and there was still a social stigma on the corrupt.

The Commonwealth Period

President Manuel L. Quezon espoused the “Social Justice” program to arrest the increasing social unrest in Central Luzon.
  • 1935 Constitution – “The promotion of social justice to ensure the well-being and economic security of all people should be the concern of the State”
  • Commonwealth Act No. 178 (An Amendment to Rice Tenancy Act No. 4045), Nov. 13, 1936 – Provided for certain controls in the landlord-tenant relationships
  • National Rice and Corn Corporation (NARIC), 1936 – Established the price of rice and corn thereby help the poor tenants as well as consumers.
  • Commonwealth Act. No. 461, 1937 – Specified reasons for the dismissal of tenants and only with the approval of the Tenancy Division of the Department of Justice.
  • Rural Program Administration, created March 2, 1939 – Provided the purchase and lease of haciendas and their sale and lease to the tenants.
  • Commonwealth Act No. 441 enacted on June 3, 1939 – Created the National Settlement Administration with a capital stock of P20,000,000.

Petty corruption started to expand after the Commonwealth period. The landholding class still had their lands. They were able to generate capital out of their lands which allowed them to diversify into other business lines. Meanwhile, the landless population keeps increasing,  more people need to share small landholdings – crumbs.

Petty Corruption

Bureaucratic, administrative or “petty” corruption takes place in the public administration, at the implementation end of politics, where the public meets with public officials. Bureaucratic corruption is usually distinguished from high level, “grand” political corruption (to the extent it is possible to distinguish administration from politics).

As time went on, the effects of the inequitable distribution of wealth became more felt. The rich became richer as the lands they owned were used to generate capital. Those who didn’t have land, couldn’t generate capital.

The oligarchy wanted to keep on retaining their assets, the occasional bribes become more regular. The non-oligarchy seeing how bribes can get them ahead of everyone else, followed the oligarchs’ lead and now engaged in bribery as well.  Corruption becomes a way of life.

Systemic Corruption

As opposed to exploiting occasional opportunities, endemic or systemic corruption is when corruption is an integrated and essential aspect of the economic, social and political system, when it is embedded in a wider situation that helps sustain it. Systemic corruption is not a special category of corrupt practice, but rather a situation in which the major institutions and processes of the state are routinely dominated and used by corrupt individuals and groups, and in which most people have no alternatives to dealing with corrupt officials. Examples might include contemporary Bangladesh, Nigeria, Kenya, Cameroon and many others.

All these have culminated in episodes of “grand corruption” mixed with systemic corruption and petty corruption.

Grand Corruption

High level or “grand” corruption takes place at the policy formulation end of politics. It refers not so much to the amount of money involved as to the level in which it takes place: grand corruption is at the top levels of the public sphere, where policies and rules are formulated in the first place. Usually (but not always) synonymous to political corruption.

Political corruption is the use of legislated powers by government officials for illegitimate private gain. Misuse of government  power for other purposes, such as repression of political opponents and general police brutality, is not considered political corruption. Neither are illegal acts by private persons or corporations not directly involved with the government. An illegal act by an officeholder constitutes political corruption only if the act is directly related to their official duties.

Forms of corruption vary, but include bribery, extortion, cronyism, nepotism, patronage, graft, and embezzlement. While corruption may facilitate criminal enterprise such as drug trafficking, money laundering, and human trafficking, it is not restricted to these activities.

The activities that constitute illegal corruption differ depending on the country or jurisdiction. For instance, certain political funding practices that are legal in one place may be illegal in another. In some cases, government officials have broad or poorly defined powers, which make it difficult to distinguish between legal and illegal actions. Worldwide, bribery alone is estimated to involve over 1 trillion US dollars annually. A state of unrestrained political corruption is known as a kleptocracy, literally meaning “rule by thieves”.

“Corruption does exacerbate and promote poverty, but this pattern is complex and moderated by economic and governance factors. Based on these findings, anti-corruption programs that are crafted to address issues of economic growth, income distribution, governance capacity, government services in health and education, and public trust in government are likely to not only reduce corruption, but reduce poverty as well.”- Corruption and Poverty: A Review of Recent Literature

Major Propositions Linking Corruption and Poverty

  • Economic growth is associated with poverty reduction
  • The burden of rapid retrenchment falls most heavily on the poor.
  • Corruption is associated with low economic growth
  • Corruption reduces domestic investment and foreign direct investment
  • Corruption increases government expenditures
  • Corruption reduces public sector productivity
  • Corruption distorts the composition of government expenditure, away from services directly beneficial to the poor and the growth process, e.g., education, health, and operation and maintenance
  • Better health and education indicators are positively associated with lower corruption
  • Corruption reduces government revenues
  • Corruption lowers the quality of public infrastructure
  • Corruption lowers spending on social sectors
  • Corruption increases income inequality
  • Corruption increases inequality of factor ownership
  • Inequality slows growth
  • Corruption decreases progressivity of the tax system
  • Corruption acts as a regressive tax
  • Low income households pay more in bribes as percent of income
  • Better governance, including lower graft level, effects economic growth dramatically
  • Better governance is associated with lower corruption and lower poverty levels.
  • High state capture makes it difficult to reduce inequality, even with growth
  • Extensive, organized, well institutionalized and decisive political competition is associated withlower corruption
  • Trust is a component of social capital. Higher social capital is associated with lower poverty.
  • Corruption undermines trust (in government and other institutions) and thereby undermines social capital.

If carefully crafted, anti-corruption programs might yield important poverty reduction results. The literature suggests that programs that succeed in reducing corruption will contribute to poverty
alleviation especially if they also achieve the following:

  • Increase economic growth
  • Create more equitable income distribution
  • Strengthen governance institutions and capacity
  • Improve government services, especially in health and education
  • Increase public trust in government

Aquino’s team has been harping too much on the better governance side of the equation. While better governance (in terms of administrative reforms) yields results, but it is still not effective in addressing poverty system-wide – the source of pressure to commit corruption.

Therefore “walang mahirap, kung walang corrupt” is incorrect.

Rather, it should be the other way around “merong corrupt, dahil maraming naghihirap”.

References:

1 – http://pdf.usaid.gov/pdf_docs/Pnacw645.pdf, accessed 7/2/2010

2-http://www.dar.gov.ph/ar_history.html, accessed 7/2/2010

Significant legislation enacted during the American Period:

  • Philippine Bill of 1902 – Set the ceilings on the hectarage of private individuals and corporations may acquire: 16 has. for private individuals and 1,024 has. for corporations.

  • Land Registration Act of 1902 (Act No. 496) – Provided for a comprehensive registration of land titles under the Torrens system.

  • Public Land Act of 1903 – introduced the homestead system in the Philippines.

  • Tenancy Act of 1933 (Act No. 4054 and 4113) – regulated relationships between landowners and tenants of rice (50-50 sharing) and sugar cane lands.

The Torrens system, which the Americans instituted for the registration of lands, did not solve the problem completely. Either they were not aware of the law or if they did, they could not pay the survey cost and other fees required in applying for a Torrens title.
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8 comments

  1. […] An entry in the blog Sanamagan! stated that “walang mahirap, kung walang corrupt” is incorrect. Rather, it should be the other way around “merong corrupt, dahil maraming naghihirap.” […]

  2. can’t wait for the last day of noynoy in office kasi i will be happy to point out kung may isang naghihirap among us. if meron. eh di corrupt ang regime n’ya.

  3. I think the comment of Philippine Guild is logically flawed.

  4. Inspector Fu · ·

    The biggest myth on this post is “In the beginning – there was no corruption. Everyone had equal access.”

    Laugh.

  5. yeah – there’s corruption in purely – tribal culture.. MILLION LAUGHS

  6. Greetings and thank for posting this. It’s pretty really truly so good. I discovered the most impressive crumbs of information here.

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  8. Anonymous · ·

    AMAZING! Thank you for sharing this global problem in such a simple “plastic” explanation.

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