Aspects of provincial growth
Date
1999-10-27
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Abstract
The study is patterned after numerous studies conducted which have aimed to estimate the determinants of growth. The study incorporated data at the provincial level in the Philippines. Data on this level was only made available beginning 1990 and growth at the provincial level has not been measured previously. The study found the relation of initial conditions to subsequent growth. Values of indicators for 1991 were proposed to explain the variation in average per capita income and average per capita expenditure in 1997. Determinants of growth were estimated as well as proxy indicators of expected significant variable categories. Indicators for education, infrastructure, social service expenditures, inequality, and agricultural conditions were incorporated in the study. The researchers included variables that could aptly describe the progress of a province. The study made use of twelve indicators that literature have suggested account for the variation of growth. Average farm size and average area irrigated describe the provincial agricultural situation. The combined cohort survival rate and the primary and secondary participation rates measure the effects of education on growth. Infrastructure is proxied by government appropriations for the construction of highways and bridges, and telephone systems. Expenditure on assistance for primary health care programs and for the implementation of programs for the elementary and secondary levels in education indicated social service outlays. Dummy variables to capture political instability, seat of government and extent of urbanization were incorporated in the model. Also, the researchers have performed regressions to determine the effect of the same determinants of growth to indicators of "quality of life", as proxied by health conditions prevailing in each province. The regression results highlighted the significance of initial expenditure inequality, participation and cohort survival rates for primary and secondary education, and government expenditures for health services on average per capita income (expenditure). The regression results show that only ARMM (Autonomous Region of Muslim Mindanao) which measures the effect of political instability to provincial growth is significant among the introduced dummy variables .
The paper concludes that the government should allocate proportionately
the budgets for each province more specifically in rural areas and those far from Luzon, assigning larger weights to basic health services and education.
Investments in human capital through improvement in access to basic health
services and education (primary and secondary rather than tertiary) are strongly associated with rapid economic growth. Also, low initial inequality benefits the poor both immediately and in the longer term through higher growth. (Bruno et al, 1995) With the presence of accurate provincial data, a measure of provincial growth will allow policymakers to clearly evaluate the needs of each province, being that there are cross-province variations, and allocate equitably their budgetary needs, the focus of which is on basic health services and basic education.
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Keywords
Provincial growth