Working around Corruption: The Political Economy of Labor Export in the Philippines

Suzy Lee, Binghamton University, State University of New York (SUNY)

Over the past few decades, contract labor migration has become a lynchpin of the Philippine economy. The remittances generated through migration not only support the high rates of consumption of individual households, they have facilitated the growth of consumption-based sectors like real estate, retail, and services, and facilitating a period of relative economic stability and growth beginning in the late 1990s and continuing to the present day. The state’s management of the labor export has been a key component of the new Philippine economy, and this management is particularly notable for its contrast to the country’s well-documented struggles with corruption and patrimonialism within its state structures. This paper examines the relationship between corruption and state capacity in the emergence of the new Philippine economy. Focusing on the first three decades of the labor export program, from the mid-1970s to the early 2000s, this paper argues that the state’s performance in this policy area can be explained by interaction between the structure of Philippine corruption - characterized by the influence of oligarchic kin groups over the state - and the nature of labor export - where the most important revenue stream (family remittances) is separate from the profits and subsidies available to the businesses that coordinate export itself. This separation protected the labor export apparatus from the large scale looting that undermined the state agencies directly involved in the Philippine economic development programs.

No extended abstract or paper available

 Presented in Session 202. States and Their Elites, or Elites and Their States