Booty Capitalism: The Politics of Banking in the Philippines

by Paul D. Hutchcroft

In the early postwar years, the Philippines seemed poised for long-term economic success; within the region, only Japan had a higher standard of living. By the early 1990s, however, the country was dismissed as a perennial aspirant to the ranks of newly industrializing economies, unable to convert its substantial developmental assets into developmental success. Major reforms of the mid-1990s bring new hope, explains Paul D. Hutchcroft, but accompanying economic gains remain relatively modest and short-lived.

What has gone wrong? The Philippines should have all the ingredients for developmental success: tremendous entrepreneurial talents; a well-educated and anglophone workforce; a rich endowment of natural resources; a vibrant community of economists and development specialists; and abundant overseas assistance. Hutchcroft attributes the laggard economic performance to long-standing deficiencies in the Philippine political sphere. The country's experience, he asserts, illuminates the relationship between political and economic development in the modern Third World. Through careful examination of interactions between the state and the major families of the oligarchy in the banking sector since 1960, Hutchcroft shows the political obstacles to Philippine development.

"Booty capitalism," he explains, emerged from relations between a patrimonial state and a predatory oligarchy. Hutchcroft concludes by examining the capacity of recent reform efforts to encourage transformation toward a political, economic order more responsive to the developmental needs of the Philippine nation as a whole.

Genres: Economics

278 pages, Hardcover

First published May 1, 1998

About the author

Paul's interests in Southeast Asian politics can be traced to1980-81, when he first lived in the Philippines and witnessed mounting opposition to the rule of Ferdinand Marcos. This eventually led him into Southeast Asian studies at Yale University, where he completed an M.A. in International Relations and a Ph.D. in Political Science. He finished his dissertation while at the Harvard Academy for International and Area Studies, and proceeded to fifteen years of service on the faculty of the University of Wisconsin-Madison. He joined the ANU in August 2008.

Career Highlights
Harvard Academy for Area and International Studies, 1991-1993; Faculty, Department of Political Science and Center for Southeast Asian Studies, University of Wisconsin-Madison, 1993-2008; Associate Chair, Department of Political Science, UW-Madison, 2004-2007; Professor, ANU, 2008 to present. Visiting Associate Professor, Asia Research Institute of the National University of Singapore, 2004. Recipient of fellowships from Fulbright-Hays (1989, 1995-96, and 2003), Social Science Research Council (1990-91), American Council of Learned Societies-SSRC (1999), U.S. Institute of Peace (2001), and Asia Research Institute (2005). Program Chair, Association for Asian Studies, annual meetings in Boston, March 2007.

Reviews

[Jedd · Rating 3 out of 5]

3.5/5

The key to reading this book (if, God forbid, like me you have nothing better to do with your life) is in understanding that it is in no way groundbreaking in its dissection and study of a Philippine commercial sector. It's a good starting point if, like me, you don't yet have a solid background in political science and/or are trying to break free of an insulated, Sheryl Sandberg/Simon Sinek-esque "yankee accountability" bubble. Lean in, this is not.

Hutchcroft in no uncertain terms identifies basic underlying problems hampering the growth of local industry: arbitrary state enforcement of convoluted industry regulations, cronyism, oligarchs with vast strongholds over protected industries and tranches upon tranches of natural resources. What saddens the casual reader is how much of this book, despite the number of conglomerate names and public officials having lapsed into obscurity, still rings foundational today.

I do wish the book delved further however, into the narratives of the poor, rather than just the narratives of those in power. The lack of savings, and the lack of access to adequate opportunities for capital investment, land reform, social mobility, etc. are but theoretical guideposts the author passes on the way to more gossip and face-palming and handwringing over the PH banking sector's lack of collective public vision. Why not shine light instead on the public's desires and struggles, prod and frame the pillaging in contrast with their hardship and divorce from the apparatus, and conclude by championing their struggle for access?

Shelved for posterity's sake, and to remind myself of the need to read up more on the root causes behind local/third world wealth distribution and inequality.

[van gone. · Rating 2 out of 5]

hutchcroft focused so much on oligarchs being involved in policy-making when there's so more to that. also, there are plenty of details that were unnecessary (or at least too slap-to-the-face idealizations) e.g. weber's theories like cmon, it would've been better if they compared and contrasted southeast asian economies pre- and post-war era than just focusing on what the rich feudal-esque families had done to this country.

[Lance · Rating 2 out of 5]

It was dreadful to read this book. The vernacular and style used by Hutchcroft were highly academic — I wouldn't advise a casual reader to read this book for relaxation.

Hutchcroft retrospectively presents Philippines' post-war developmental issues in a manner where he thoroughly explains specific circumstances about cronyism during the Marcos regime. Much of his writing is a combination of narration and interpretation, injecting his personal insights on the interplay among the Central Bank (now Banko Sentral ng Pilipinas), local banks, aristocratic families, and businessmen, whom are mostly Chinese. Hutchcroft also unravels the extreme clientelistic domination in the political and economical realm of the state, and how unfair trials are capitalized to maintain power — that is still prevalent today. Ultimately, his review is laudable.

Though, as I mentioned, it is really difficult to enjoy and consume such a factual-filled piece book.

[Francie Kaye · Rating 3 out of 5]

read two chapters for class