Why Competitive Elections Keep Failing to Deliver Development

The Philippine is one of Southeast Asia’s enduring paradoxes.

The nation is rich in almost everything that should make nations prosperous.

It has one of the world’s largest deposits of nickel, copper, gold and chromite. It sits atop vast geothermal reserves, boasts some of the strongest wind and solar resources in Asia, and is surrounded by one of the planet’s richest marine ecosystems.

It has fertile farmland, a young English-speaking workforce, a strategic location astride major shipping lanes and a diaspora whose remittances exceed $35 billion annually.

By many measures, the country has won what economists call the “resource lottery.”

And the country rarely struggles to produce leaders.

Yet it struggles to produce institutions.

Its abundant resources have rarely translated into the sustained prosperity achieved by several of its Asian neighbours.

The question naturally arises: Are Filipinos resource-cursed (known in Spanish as “maldicion”)?

The answer is almost certainly no.

The problem is not the country’s geography. It is the quality of its governance.

Economists often refer to the “resource curse” — the idea that countries rich in natural wealth frequently experience slower development because resource revenues encourage corruption, weaken institutions and reduce incentives for broader economic reform.

The Philippines fits parts of that description, though not in the classic oil-state sense.

One reason: even the country’s mineral resources had for decades been subjected to what is known “elite capture”. Ask who controls the country’s top gold mines, for example, and then you get a clearer picture.

Yet, its greatest untapped resource may not be beneath the ground.

It is the capacity of its institutions.

This is where recent assessments become revealing.

Unlike many East Asian neighbours whose economic transformation was driven by long-term industrial planning and professional bureaucracies, the Philippines has often allowed electoral politics to dictate economic priorities.

Every administration launches its own flagship programmes, rebrands existing initiatives and reshuffles bureaucratic leadership.

Long-term policy continuity becomes the exception rather than the rule.

Infrastructure projects are delayed, and become the platform for institutionalised mega-kickbacks.

Investment rules change. Regulatory agencies are politicised. The bureaucracy spends valuable time adapting to new political masters instead of executing long-term development strategies.

A long-term strategy that fits the country’s archipelagic nature is also severely lacking.

A coherent long-term development strategy that takes advantage of the Philippines’ unique geography remains conspicuously absent.

Rather than treating its archipelagic nature as a strategic economic asset, the country has largely pursued a development model centered on Metro Manila and a handful of inland industrial corridors.

The Philippines comprises 7,641 islands and has one of the world’s longest coastlines—stretching approximately 36,289 kilometers, more than 15 times longer than Germany’s 2,389-kilometer coastline, as per the CIA World Factbook.

Yet despite this extraordinary maritime advantage, the country has developed only a handful of major free ports, such as the Subic Bay Freeport, Bataan Free Port and the Clark Freeport Zone, and a token “freeport” in Zamboanga (but without its own actual port!)

Most export processing zones remain concentrated inland around Luzon and are administered through highly centralised institutions based in Manila.

To add insult to the injury, most of the functional freeports are in a rather small area, adjacent to each other (Clark and Subic is approximately 80 to 93 kilometers, while Subic and Bataan are only about 70 km apart).

For a country with a land area 7 times larger than the Netherlands, this should be seen as an abomination.

This concentration reflects a broader policy bias that favours land-based manufacturing clusters over a decentralised maritime economy.

Instead of building a network of strategically located port cities, special economic zones and logistics hubs across the Visayas and Mindanao, economic activity continues to flow through Metro Manila’s congested ports and transport corridors.

That’s not to mention the corruption at the Bureay of Customs, highly criticised for pervasive bribery, inconsistent fee assessments, and overly intrusive inspections, as detailed by a damning report by the US Trade Representative.

Inter-island shipping costs remain among the highest in Southeast Asia, domestic logistics are inefficient.

Worst of all, many coastal provinces remain disconnected from global supply chains.

This, despite sitting directly along some of the world’s busiest sea lanes.

Studies by the World Bank, the Asian Development Bank and the OECD have repeatedly identified high domestic shipping costs and fragmented logistics as major constraints on Philippine competitiveness.

The result: an economy capable of bursts of impressive growth but less capable of sustaining structural transformation.

To the credit of its leaders, the Philippines has posted respectable GDP growth over the past decade, supported by remittances, business process outsourcing (BPO) and resilient domestic consumption.

But economic growth has not consistently translated into broad-based wealth creation.

Productivity remains uneven.

Manufacturing has never become the dominant engine it became in South Korea, Taiwan or Vietnam.

Agriculture still employs millions while contributing only a small share of national output.

Infrastructure gaps persist despite significant recent investments. That’s not to mention the “tongpats” culture that leave the people with sub-par roads, bridges and flood defences, where they actually exist.

Poverty has declined, but inequality remains stubborn.

These outcomes are not simply failures of economic policy. They are consequences of governance.

Democracy is often misunderstood as an end in itself. It is not.

Elections provide legitimacy. Institutions produce results.

Countries that successfully converted political freedom into economic prosperity generally developed independent courts, whistleblower protection laws, predictable regulation, competent civil services and credible anti-corruption mechanisms.

These institutions reduce uncertainty for investors, encourage innovation and ensure that public resources are allocated based on national priorities rather than kickbacks.

The Philippines has made progress in each of these areas — but not enough to consistently outperform its regional peers.

Political dynasties continue to dominate large parts of the country, limiting political competition despite competitive elections. Patronage politics often rewards loyalty over competence. Public spending frequently reflects electoral incentives more than economic returns.

Meanwhile, corruption — whether real or perceived — raises the cost of doing business, slows infrastructure delivery and weakens public trust.

None of this suggests democracy itself is the problem.

The problem is that democracy without institutional capacity becomes transactional politics.

Voters choose leaders. Leaders reward supporters. The next election begins almost immediately.

Policy becomes cyclical instead of strategic.

The encouraging news: the Philippines possesses many of the ingredients needed for faster development.

It has one of Southeast Asia’s youngest populations, an English-speaking workforce, growing digital industries, abundant natural resources and increasing foreign investor interest.

Recent reforms in investment liberalisation, right-of-way, renewable energy, public services, public-private partnerships and infrastructure demonstrate that meaningful progress is possible.

But sustained economic transformation will require something less visible than elections. They’re more difficult to build than campaign coalitions.

It requires institutions that outlast administrations.

The BTI’s governance rating for the Philippines should therefore not be read simply as criticism.

It should be understood as a reminder, a challenge.

Democratic legitimacy is only the first step toward national development.

The Philippines has largely solved the question of how leaders are chosen.

Its next challenge is ensuring that whoever wins the next election governs through institutions strong enough to deliver lasting economic gains — not just until the next campaign, but for the generations that follow.