Cacique Democracy  
Wednesday, December 26, 2012
Daron Acemoglu and James Robinson

Let’s set aside culture and return to the colonial history of the Philippines and how it influenced institutions. One of the most influential analyses of this is due to the political scientist Benedict Anderson, whose 1988 article in the New Left Review “Cacique Democracy in the Philippines: Origins and Dreams” laid out a theory of the political economy of the Philippines. Like Fallows’s article (which we discussed here) , Anderson’s was written in the wake of the People’s Power Movement that had ousted Ferdinand Marcos. Everyone was trying to come up with forecasts for where the Philippines was going. Fallows’s answer was: nowhere, because, he argued, the real problem was not Marcos but Filipino culture. Anderson’s answer was also nowhere, but from a very different perspective.

As we noted in our first post on the Philippines, though the country was a Spanish colony and even shared the same specific institutions as Spain’s American colonies, there were important differences. There was little settlement by Spaniards, and as a result the Church essentially ran the colony. They invested little in education, and at the time of US occupation probably no more than 5% of the population spoke Spanish. In the 19th century after the collapse of the Spanish empire in the Americas, commercial restrictions were gradually lifted on the Philippines and a non-Spanish economic elite, often of Chinese descent, emerged. They gradually acquired education and spearheaded the nationalist movement that ousted the Spanish shortly before the US invasion. Yet the behavior of the US administration was to turn this elite into a real oligarchy.

First, they expropriated about 400,000 acres of land that had been church estates and auctioned it off. It was the elite that had money to buy this land.

Second, right from the beginning they staffed the administration with locals, but these were positions that the educated elite was best placed to fill. In addition, meritocratic criteria were not applied for recruitment into this administration, so the oligarchy could easily dominate them, as Anderson puts it:

Here is the origin of the ‘political dynasties’ —among them the Aquinos and Cojuangcos—which make Filipino politics so spectacularly different from those of any other country in Southeast Asia.

Third, they introduced elections first at the local level for provincial governors in 1902, then for the lower house of the legislature in 1907, then a bicameral assembly in 1916, and finally for the executive in 1935. Though this sequencing of elections, with local ones coming first appears like a good idea in the abstract, in practice it allowed the newly entrenched oligarchy to dominate local politics and then to build on the skills they honed at this level to capture the successive democratic institutions that were opened up (albeit with a very restrictive property franchise).

As a result of all of this, from the start the Philippines was a captured democracy, even if the elites who were doing the capturing were different from the elites of Latin America — they owed their power more to the way the US had structured their colony.

Nevertheless, elite dominance had the same effects in the Philippines as in Latin America — most notably extractive economic institutions and poor economic growth. After independence in 1945 they maintained this dominance. Indeed, the first serious attempt to break it was by, none other than, Ferdinand Marcos who after his election in 1965 introduced marshal law and suspended the constitution in 1972. He then ruled in this fashion until ousted in 1986 by Corazon Aquino and People’s Power.

Marcos went down in history as a run-of-the-mill kleptocratic dictator, but actually there was more to it than that. If you read his 1974 book Notes on the New Society of the Philippines you’ll see that his diagnosis of the root cause of the problems of the Philippines is precisely that it is dominated by an oligarchy. So, Marcos justified his policies by the attempt to break the oligarchy’s control over the economy and the polity!

And why was Anderson so pessimistic in 1988 about the future of the Philippines?

Precisely because, though he did not consider the Marcos dictatorship a success, it was followed after 1986 by the return of the oligarchy. So Anderson argues:

the truth is that the President, born Corazon Cojuangco, is a member of one of the wealthiest and most powerful dynasties within the Filipino oligarchy… Her marriage to Benigno Aquino, Jr., at various periods Governor of Tarlac and Senator, linked her to another key dynasty of Central Luzon.

So People’s Power overthrew the dictator Marcos in order to reinstate the oligarchy….

Article originally appeared on Why Nations Fail by Daron Acemoglu and James Robinson (
See website for complete article licensing information.