ELITE POWER AND CONTROL: PHILIPPINES TELECOMMUNICATIONS SECTOR, 1940-1993
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Abstract
The political structure in the Philippines has been shaped by the desire of a small elite to maintain political and economic control by concentrating power in the executive, leaving the legislature and the judiciary relatively weak. American influence, foreign ownership and elite monopoly in this sector stalled the development. The Philippines case is particularly interesting because it provides an opportunity to study the underlying causes of success and failure in the telecommunications sector. The dynamic of power and control shows the inadequacy of the policy and domestic regulations. The article focuses on Philippine Long Distance Telephone (PLDT) and a number of other closely related enterprises. To maintain control of political and economics rents, the Philippines elite have helped shape a political structure that has stunted the development of efficient institutions for market governance and resources mobilization. The institutional failure is clearly reflected in the main characteristics of the Philippine regulatory system (Peltzman, 1976). Though the initial form of the country’s regulatory institutions was borrowed from the United States, some key aspects were modified to adapt those institutions to the Philippines’s political structure. The history of the telecommunications sector in the Philippines provides strong evidence that the commitment capabilities of government have had a significant impact on investment in the sector.
Keywords: Monopoly, PLDT, political structure, economic rents, and efficient institution
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