Reshaping Economic Geography in East Asia by Yukon Huang & Alessandro Magnoli Bocchi

Author:Yukon Huang & Alessandro Magnoli Bocchi
Language: eng
Format: epub
ISBN: 9780821376416
Publisher: The World Bank
Published: 2009-07-22T00:00:00+00:00

To be sure, spatial economic disparities need not be growth-reducing if these arise from efficiencies associated with agglomeration. Given scale economies and factor mobility, as well as scarcity of investment funds, the spatial concentration of economic activities leading to differential patterns of growth across regions or areas of the country may in fact be inevitable and even desirable from an overall economic growth perspective. However, to prevent unreasonable spatial disparities in welfare during the development process, the priority should be to improve the market links between the leading and lagging regions through greater factor mobility, particularly labor mobility. Improving access to social services, particularly education and health, in lagging regions should also be part of the development agenda.

The Philippines is ideally suited to a study of regional dynamics and development policy. With a population nearing 90 million people, the country is highly diverse in its geography, ecology, natural resource endowments, economy, ethnicity, and culture. Comprising 7,100 islands, it is the second-largest archipelagic state in the world, after Indonesia. It is estimated to have 110 ethnic groups and 170 spoken languages.

This chapter provides an overview of spatial development dynamics in the Philippines in the past 25 years. Spatial development is seen in the context of the country's 16 regions and 77 provinces. Because the grouping of the country's provincial data differs from that of regional data. Specifically, the chapter is organized as follows. It first discusses the dimensions and patterns of spatial (regional, provincial, urban-rural) diversity. Diversity is seen in terms of economic performance, economic and spatial attributes (such as infrastructure development, agrarian structure, location), and various indicators of social development outcomes (health status, literacy). The chapter then uses econometric techniques to explain the differences in income growth and poverty reduction. The analysis makes use of an updated provincial panel database covering 1985 and every three years thereafter, which the authors have built over the years. Although the regions have longer data, covering years before 1985, data comparability over time is a major problem owing to numerous changes in the grouping of provinces into regions. Finally, the chapter highlights the policy lessons and implications of the study for regional development and poverty reduction.

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