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November 27, 2018

What are the disadvantages if the government will intervene in poverty alleviation?

It is undeniable that an increasing number of people around the world live in poverty. But
there has been little consensus only regarding matters that measures, determines, and reduces
poverty. Merino (2012) defines poverty broadly as the state of having a deficiency of basic
necessities such as food, water, shelter, health care, and clothing. Today, the scholars, academics,
clerics, and politicians have been perplexed as to why there is poverty and if government
intervention is the best solution in alleviating poverty. The primary goal of development efforts
is to improve in the quality of life of the people. The Philippines is no exception. Poverty is the
biggest problem in the Philippines. A recent Social Weather Stations survey showed that one in
every two Filipino families rated themselves poor in 2015. A Pulse Asia survey also found that 38
percent of the respondents viewed poverty as one of the most urgent national concerns. Studies
have shown that among the causes of poverty are inequality, poor government, corruption and
slow economic growth (Inquirer.Net, 2016).

The pros and cons of government intervention has not only heated the debates
concerning on free markets but also specifically in alleviating poverty. The need for a continued
discourse in poverty is still relevant because its lingering impacts are not small deal. Hunger,
malnutrition, unemployment, lack of education, crime, violence, child labor, harassment,
unequal distribution, and worst death, are all connected to poverty. Philippines as a developing
country or a third world country, still suffers in extreme poverty. The questions on why the
Filipinos remain poor is never ending. The Government with all its power and authority has the
responsibility for its citizens. However, the provocative discussion on intervention in almost all
aspects is still visible. In this paper, the concept of government intervention in solving one of the
country’s most problematic situation which is poverty will be well scrutinized and analyzed. With
that being said, this paper discusses four disadvantages if the Philippine Government will
intervene in poverty alleviation.

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First, the government is liable to make wrong decisions as it is highly influenced by
political and business pressure groups. This in turn would lead to inefficient projects and
inefficient outcome. When governments spend on merit goods for anti-poverty objects, they may
create excess bureaucracy and inefficiency. Although the country is a democratic government, it
is dominated by the elites – big businesses and politicians. Edmundo Enderez (2016), an Inquirer
columnist cites the Aquino administration’s revised “Philippine Development Plan: 2011-2016” as
one example of a ‘failed’ mission. The objective of targeting to reduce the country’s poverty
incidence has failed. The case is not emphasized on the project itself but on some other factors that
may affect the goal of achieving poverty reduction. One of them is the influence on government
appointment by the businessmen politicians or even the politicians that are deeply tied with big
businesspeople.

The unclear visions of people behind the projects and implementations will affect those who
are supposed to truly benefit from these. The case of political and business ties my lead to wrong
decisions and inefficiency. Not only that but the highly patronage system of Philippine culture does
not help either. Using Yuko Kasuya’s (2008) famous concept of illustrating Philippines as highly based
in a patronage system, this means that ties or relationships are very much more important that
really focusing on poverty alleviation. Since the government is full of people with strong business
and political desires or interests, the possible negative outcomes will trickle down even up to the
national goal of reducing poverty in the country. Furthermore, the government or administration
always have elite-backed appointments which may divert their attention away from the country’s
real national policies in alleviating poverty.

Second disadvantage pertains to corruption in Philippine Government which can be an


impediment in alleviating poverty. According to Batavia & Lash (2013), corruption is the main
problem in most developing countries. In their study entitled Government Economic Intervention
and Corruption, corruption was found to be associated with government intervention in business
and trade as well as on Government spending and taxation. In connection to the case of our
country’s Tax Administration, there seems to be problems and anomalies. The GAN Business Anti-
Corruption Portal (2017) reports that in the Philippines, there is a high risk of corruption when
dealing with the tax administration. “Around one in seven companies indicate they expect to give

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gifts in meetings with tax officials (ES 2015). Tax regulations are among the most problematic
factors for conducting business in the Philippines (GCR 2017-2018). Companies indicate that they
perceive that only a fifth of businesses in their line of business pay their taxes honestly (SWS
2016). Officials at the Bureau of Internal Revenue (BIR) are believed to be prone to corruption
and known for embezzlement and extortion (Manila Bulletin, Feb. 2014).”

Also, recently it was reported that the BIR racks up 40 cases of tax evasion this last year
(Phil Star, 2017). This shows that the tax administration of the country is not strengthened
enough to deal with serious national urgent problems. The Philippine Government’s recent move
regarding taxes or the reform tax has poured many sentiments from the Filipinos most especially
the anti-poverty advocates. Anti-Poverty Chief Liza Maza said the tax reform law will make it
difficult for around 21 million Filipinos living under the poverty line (CNN, 2018).

The statistics and studies mentioned earlier only reflects how vulnerable the Philippine
government is to corruption. The issue of a corrupt officialdom has not been unfamiliar in the
culture of Philippine politics. If the government has the hands in controlling or handling big
matters such as reducing poverty, it would only bring out the worst and not the best. If the
country is still fragile as a corrupt government, the wide gap between the rich and poor would
not be lessened. Such impediment is a disadvantage in achieving the goals of alleviating and
improving the quality of life of the poor people.

Third, economic growth does not always translate into poverty reduction. World Bank in
its report titled "Making Growth Work for the Poor: A Poverty Assessment of the Philippines, says
that despite the growing Philippine economy, poverty is still high (Rappler, 2018). This would be
one disadvantage if ever the government intervenes in alleviating poverty because the effort to
continuously increase economic growth for the sake of ease the poverty life of the people would
not really make a difference if the recent context of the country tells otherwise. Moreover, the
so-called link between economic growth and poverty reduction may cease or at least vary
overtime.

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A related literature concurs to this claim where Casse and Jensen (2009) conducted a
study about the linkages between economic growth and reduction of poverty. The study
concludes that in a very poor country such as Africa, poverty trends tell say that there is no link
established between economic growth and poverty reduction. However, in another country
which is Burkina Faso, a link existed only for a short period of time and contrary to this is
Madagascar where a link appears to be very obvious.

To further the discussion apart from poverty reduction, the study of (Ballesteros & Israel,
2014) also claims that Economic growth in the Philippines has not been accompanied by
significant improvements in employment. Moreover, the NAPC identifies three basic reasons for
the persistence of poverty despite economic growth: the underdevelopment of agriculture and
industry; the inequitable distribution of incomes, assets and opportunities; and the inadequacy
of social services and social protection (Teodoro, 2018). Clearly, in the case of the Philippines, it
may change for the many years to come but the status quo navigates to the disadvantageous
side if the government will intervene in poverty alleviation.

Fourth, there is weak government capacity for implementing poverty reduction programs
and deficient targeting in various poverty programs. In the study of Ballesteros & Israel (2014), it
discusses certain implementations by the government to uplift the situation of unemployment
which contributes to poverty. Active Labor Market Programs or ALMPs is one of the strategies
used to improve the employment of the disadvantaged sectors. Such program targets the skilled,
semi-skilled, and even the low-skilled in various communities. The ALMPs has been the tool to
address the adverse effects on employment brought by issues of economic crisis. However, the
study concludes that programs such as ALMPs appears transitory and short term. There is no
clarity as to how the program will continue in a macro-level.

It is also disadvantageous for the government to intervene in poverty alleviation because


the country’s anti-poverty policy is itself poor in concept, design, and implementation. As a
matter of fact, NAPC Secretary Liza Masa describes the alleviation of poverty as “the greatest
challenge facing our country today”. In addition, Bennagen (2000) argues that while the SRC and

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NAPC provided opportunities in the governance of poverty at the national and local levels, the
impact of such participation has been quite limited because the participation of civil society has
not been maximized. Teodoro’s (2018) line of “The Poverty of anti-poverty policy” supports the
mentioned claims regarding the weaknesses of implementing as well as the content itself of some
programs intended for anti-poverty. This last disadvantage mentioned should be well
emphasized as it speaks of the programs and projects itself. The goals, objectives, and outcomes
would not turn out to be good or excellent if the foundations itself is ineffective. The government
should start small steps in looking into the anomalies in the functions and structures of the anti-
poverty programs in the country.

The issue of government intervention can be backed up by various economic and political
theories. The neoliberal thought would argue that development should be left at the hands of
the market and business world. This economist lens would suggest that good economy must
come first and any intervention from the state should be minimized and limited. In connection
to the analysis of this paper which dwells on poverty reduction, a loose government intervention
would mean that the country is more progressive and efficient. If the market forces do their thing,
then good economy of the country as a whole will follow. This is to say that usually, countries are
most often measured in terms of economic factors such as GDP, GNP, exports, imports and the
like. However, it is not always the case. Just like the findings of analysis of this paper, economic
growth is not always equated to a reduced poverty in a country, at least not all the time.
Keynesian model would argue by emphasizing market failures and intervention is needed in times
of massive unemployment to bring back the productivity and efficiency. Regulatory actions by
the government are also needed to monitor certain actions, decisions, plans, and even
implementations. Nevertheless, the whole notion of alleviating poverty should not only be seen
in a single perspective. It may be usual for the masses to have the government as the “main
shoulder” to cry for help but there is a need to be critical in looking into the perks and most
especially the downside of government intervention.

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REFERENCES

Bennagen, P. (2000). Anti-poverty programs [in the Philippines]. Eldis Organization. Retrieved
from http://www.eldis.org/document/A11479

Casse, T., & Jensen, S. (2009). Do We Understand the Linkages between Economic Growth,
Poverty Targets and Poverty Reduction? Review of African Political Economy, 36(122), 539-
553. Retrieved from http://www.jstor.org/stable/27756310

Enderez, E. (2016) Poverty reduction: Failed mission. Philippine Daily Inquirer. Retrieved from
https://opinion.inquirer.net/94396/poverty-reduction-failed-mission#ixzz5Y1DfgQOG

Kasuya, Y. (2008). Presidential Bandwagon: Parties and Party Systems in the Philippines. Tō kyō :
Keiō Gijuku Daigaku Shuppankai.

Lash, N., & Batavia, B. (2013). GOVERNMENT ECONOMIC INTERVENTION AND CORRUPTION. The
Journal of Developing Areas, 47(2), 1-15. Retrieved from
http://www.jstor.org/stable/23612280

Merino, N. (2012). Poverty. Detroit: Greenhaven Press.

Nicholls, A. (2018). Anti-poverty commission: Tax reform law will harm 21M poor Filipinos. CNN
Philippines. Retrieved from http://cnnphilippines.com/news/2018/01/11/national-anti-
poverty-commission-tax-reform-harm-poor-filipinos.html

Philippine Daily Inquirer. February 2016. Agenda of the next president: Poverty reduction.
Retrieved from https://newsinfo.inquirer.net/762650/elections-2016-poverty-
reduction-agenda-voteph2016#ixzz5Y15dB3Om

Rappler (2018) PH economy growing but poverty still high – World Bank. Retrieved from
https://www.rappler.com/business/203680-economy-poverty-rate-philippines-world-
bank-report-2018

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Talavera, C. (2018). BIR racks up 40 cases of tax evasion this year. Philippine Star. Retrieved from
https://www.philstar.com/business/2017/07/08/1717644/bir-racks-40-cases-tax-
evasion-year

Teodoro, L. (2018). The poverty of anti-poverty policy. Business World Online. Retrieved from
https://www.bworldonline.com/poverty-anti-poverty-policy/