能力建構角色在台灣與菲律賓經濟發展援助之比較研究 - 政大學術集成

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(1)Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. International Master’s Program in International Studies 國立政治大學國際研究英語碩士學位學程 National Chengchi University. Comparative Study on the Role of Capacity Building in Economic Growth from Foreign Aid between Taiwan and 治Philippines 政the 大. 立. ‧ 國. 學 ‧. 能力建構角色在台灣與菲律賓經濟發展援助之比較研究 n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. Angelica Sarah C. Riofrio (李恩婕) Adviser: Dr. Pai-Po Lee (李栢浡). June 2016. i.

(2) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. TABLE OF CONTENTS ACKNOWLEDGEMENTS .................................................................................................... I ABSTRACT ............................................................................................................................. II LIST OF FIGURES .............................................................................................................. IV LIST OF TABLES .................................................................................................................. V ABBREVIATIONS ............................................................................................................... VI CHAPTER I INTRODUCTION ............................................................................................ 1 RESEARCH BACKGROUND ........................................................................................... 1 RESEARCH OBJECTIVES ............................................................................................... 7 RESEARCH QUESTIONS ................................................................................................. 8. 政治大. SIGNIFICANCE OF THE STUDY .................................................................................... 8 DELIMITATIONS ............................................................................................................... 9. 立. CHAPTER II LITERATURE REVIEW ............................................................................. 10. ‧ 國. 學. CAPACITY BUILDING ................................................................................................... 10 Discussions and Studies.................................................................................................... 12 CAPACITY BUILDING AND ECONOMIC GROWTH .............................................. 17. ‧. SIMILARITIES AND DIFFERENCES OF TAIWAN AND THE PHILIPPINES ..... 19. y. Nat. CHAPTER III RESEARCH METHOD .............................................................................. 22. sit. RESEARCH FRAMEWORK ........................................................................................... 22. er. io. RESEARCH PROCEDURE ............................................................................................. 25. al. v i n Criteria for Selection of Interviewees 28 C h ............................................................................... U i e h n g c................................................................ 30 CHAPTER IV RESULTS AND DISCUSSIONS n. RESEARCH DATA ANALYSIS ...................................................................................... 28. TAIWAN’S ECONOMIC JOURNEY ............................................................................. 30 Joint Commission on Rural Reconstruction 1948-1978 ................................................... 32 THE PHILIPPINE SITUATION...................................................................................... 42 Philippine Development Plan 2011-2016 ......................................................................... 42 EVALUATION ................................................................................................................... 59 CHAPTER V CONCLUSION AND RECOMMENDATIONS ........................................ 63 CONCLUSION ................................................................................................................... 63 POLICY RECOMMENDATIONS .................................................................................. 65 BIBLIOGRAPHY .................................................................................................................. 68 APPENDIX A: CONSENT LETTER .................................................................................. 74 APPENDIX B: INTERVIEW QUESTIONS FOR SUBJECT-MATTER EXPERTS ... 75 ii.

(3) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. APPENDIX C: TRANSCRIPT OF INTERVIEWS (PHILIPPINES) .............................. 77 APPENDIX D: TRANSCRIPT OF INTERVIEWS (TAIWAN) .................................... 100. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. iii. i n U. v.

(4) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. ACKNOWLEDGEMENTS This thesis wouldn’t have been possible without the guidance of my thesis adviser, Dr. Lee Pai-Po as well as the constructive feedback and inputs from my committee members, Dr. Tony Shih and Dr. Yeh-Chung Lu. I would also like to take this opportunity to thank Taiwan International Cooperation and Development Fund (ICDF) for providing me with the opportunity to pursue higher studies in Taiwan. This experience has not only provided me with classroom learnings but lifetime. 政治大 here will forever have a special place in my heart. 立. friendships as well. Taiwan and its people as well as the people I have had the pleasure to meet. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. I. i n U. v.

(5) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. ABSTRACT For the past several decades, Taiwan has experienced one of the most notable records of economic development. Its evolution from an impoverished agricultural society into a flourishing industrial country characterized by rapid and sustained growth brought about a strong middle class and equitable distribution of income has been noteworthy. On the other hand, the Philippines has steadily been making progress in becoming an economic force in Asia in the past years. This paper will look into how Taiwan pursued and underwent capacity building initiatives as highlighted in. 治政大 for the country. Funded by Plan 2011-2016 which is currently used as an economic blueprint 立 the Joint Commission on Rural Reconstruction in comparison to the Philippines’ Development. foreign aid from the United States, JCRR was established to focus on rural reconstruction of post-. ‧ 國. 學. war Taiwan. In the process of rehabilitating the agricultural sector, it has also indirectly facilitated. ‧. the development of its human resources and poured substantial capital on research and innovation which enabled it to transform from an agricultural to an industrial country. Interviews of subject-. y. Nat. er. io. sit. matter experts directly involved in the institutions driving these initiatives have also been conducted to further understand the initiatives. With the recently concluded Presidential elections. n. al. Ch. i n U. v. in the Philippines, the country is facing a new leadership with its own set of priorities to tackle.. engchi. With this opportunity, it is the intention of this paper to be able to learn specific initiatives and policies that have proven to be vital factors in the development of Taiwan for possible application to the Philippines. Keywords: Capacity Building, Development, Philippines, Taiwan,. II.

(6) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. 摘要. 過去幾十年，台灣的經濟發展為最著名的紀錄之一。而值得注意的是，台灣從貧困的農業社會進步到富足的工業國家間快速且持續的成長造就了龐大的中產階級與公平的所得分配。另一方面，近幾年來，菲律賓穩定地成長為亞洲的一經濟力量。本文旨在探討台灣如何追求和實行「中國農村復興聯合委員會（農復會）」所強調的能力建構，並將之與目前為菲律賓經濟藍圖的《2011-2016 年發展計畫（Development Plan 2011-2016）》相比較。. 政治大. 在美國外援下，為了戰後台灣農村的重建而成立農復會。在復甦農業的同時，農復會亦間. 立. 接地促進人力資源的發展與大量資本在研究與創新方面的投入，使得台灣得以從農業國家. ‧ 國. 學. 轉型為工業國家。為更加了解這些計畫，本文訪談台灣與菲律賓相關組織中直接參與計畫的領域專家。在總統大選結果出爐後，菲律賓面臨新領導人上任後可能改變的施政優先順. ‧. 序；藉此機會，本文企盼能夠向已知為發展台灣重要因素的特定計畫與政策學習，以供未. y. Nat. er. io. sit. 來可能應用於菲律賓的參考。. n. al. i n C 關鍵詞：能力建構、發展、菲律賓、台灣 hengchi U. III. v.

(7) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. LIST OF FIGURES Figure 1.1 Map of Taiwan and the Philippines…………………………………………..………..2 Figure 1.2 Breakdown of components of average real GDP growth (2014-2015)………………….....3 Figure 1.3 GDP at PPP rankings…………………………………………………………...….………..4 Figure 2.1 Levels of Capacity Building………………………………………………………………15 Figure 2.2 Capacity Building – Core Issues………………………………………………………...…17 Figure 3.1 Capacity Building Process………………………………………………………………... 23 Figure 3.2 Conceptual Framework……………………………………………………………….…...25 Figure 3.3. Research Procedure……………………………………………………………………….27 Figure 4.1 JCRR Organizational Chart…………………………………………………………….….35 Figure 4.2 JCRR Relationship with Government and Farmers’ Associations………………………...39 Figure 4.3 NEDA Logical Framework……………………………………………………………..…44 Figure 4.4 Results Framework on Good Governance and the Rule of Law….………………………46 Figure 4.5 Strategic Framework on Good Governance and the Rule of Law …………………............47 Figure 4.6 Results Framework on Accelerating Infrastructure Development………………………...48 Figure 4.7 Strategic Framework on Accelerating Infrastructure Development……………………….49 Figure 4.8 Results Framework on Competitive and Sustainable Agriculture and Fisheries (A&F) Sector………………………………………………………………………..………………………..50 Figure 4.9 Strategic Framework on Competitive and Sustainable Agriculture and Fisheries (A&F) Sector ………………………………………………………………………………………………...51 Figure 4.10 Results Framework on Social Development……………………………………………...56 Figure 4.11 Top 10 Foreign Aid Donors to the Philippines…………………………………………..59. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. IV. i n U. v.

(8) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. LIST OF TABLES Table 1.1 Annual Average Growth Rate of Real Per Capita GDP: 1950-2010 (in percent) Tiger Economies………………………………………………………………………………………….….5 Table 1.2 Annual Average Growth Rate of Real Per Capita GDP: 1950-2010 (in percent) Tiger Cub Economies………………………………………………………………………………………….….6 Table 2.1 The Development of the Concept of Capacity Building……………………………..….…..11 Table 2.2 Profile of Taiwan and the Philippines.............................................................................…...20. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. V. i n U. v.

(9) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. ABBREVIATIONS ADB. Asian Development Bank. AFP. Armed Forces of the Philippines. ASEAN. Association of Southeast Asian Nations. ATRI. Agriculture Technology Research Institute. BOC. Bureau of Customs. BWSC. Bureau of Workers with Special Concerns. COA. Council of Agriculture. COC. Certificate of Competency. COD. Center for Organizational Development. CSC. Civil Service Commission. CSO. Civil Society Organization. DA. Department of Agriculture. DAP. Development Academy of the Philippines. DBM. Department of Budget and Management. DOH. Department of Health. DOLE. Department of Labor and Employment. DPWH. Department of Public Works and Highways. GDP. Gross Domestic Product. GOCC. Government-Owned and Controlled Corporation. IMO. International Maritime Organization. JICA. Japan International Cooperation Agency. JCRR. Joint Commission on Rural Reconstruction. 政治大. 學 ‧. ‧ 國. 立. n. engchi. er. io. Ch. sit. y. Nat. al. i n U. v. Kalahi-CIDSS Kapit Bisig Laban sa Kahirapan – Comprehensive and Integrated Delivery of Social Services MARINA. Maritime Industry Authority. MOFA. Ministry of Foreign Affairs. MoBSE. Ministry of Basic and Secondary Education VI.

(10) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. MoFEA. Ministries of Finance and Economic Affair. MPM. Masters in Public Management. MPWT. Ministry of Public Work and Transport. NC. National Certificate. NEDA. National Economic and Development Authority. NIC. Newly Industrialized Country. NIE. New Institutional Economics. NGA. Non-Governmental Agencies. NPM. New Public Management. ODA. Official Development Assistance. OFW. 政治大 Overseas Filipino Workers 立 Office of the President. OD. Organizational Development. PC. Planning Committee. PDP. Philippine Development Plan. PESFA. Private Education Student Financial Assistance. PMDP. Public Management Development Program. PPP. Purchasing Power Parity. PPSC. Philippine Public Safety College. PRC. Professional Regulation Commission. ROC. Republic of China. RUPP. Road Upgrading and Preservation Project. SEC. Securities and Exchange Commission. SME. Subject-Matter Expert. TARI. Taiwan Agriculture Research Institute. TESDA. Technical Education and Skills Development Authority. TR. Training Regulations. TVET. Technical Vocational Education Training. ‧. ‧ 國. 學. OP. n. sit er. io. Ch. y. Nat. al. engchi. VII. i n U. v.

(11) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. TVI. Technical-Vocational Institutions. TWSP. Training for Work Scholarship Program. UNDP. United Nations Development Program. WB. World Bank. WHO. World Health Organization. YE-YE. Youth Education – Youth Employability. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. VIII. i n U. v.

(12) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. CHAPTER I INTRODUCTION This chapter provides an overview of the study by looking at the background of the research and the variables to be considered. It goes on to enumerate the research objectives and research questions to frame the flow of the study as well as the significance of the study in the development field. This chapter likewise provides a delimitation of the research. RESEARCH BACKGROUND Asia has seen an impressive record of economic growth in the past 40 years. Though it is. 政治大 Countries (NICs): Singapore, Hong Kong, South Korea and Taiwan (Doner, 1991), also known as 立. most evident in Japan, the expansion is likewise seen in the East Asian Newly Industrialized. ‧ 國. 學. the Four Asian Tiger Economies. In recent years, four members of the Association of Southeast Asian Nations (ASEAN) are also following this trend focusing on export-driven initiatives.. ‧. For the past several decades, Taiwan has experienced one of the most notable records of. Nat. sit. y. economic development. Its evolution from an impoverished agricultural society into a flourishing. n. al. er. io. industrial country characterized by rapid and sustained growth brought about a strong middle class. i n U. v. and equitable distribution of income has been noteworthy. Many scholars call it the “Taiwan. Ch. engchi. Miracle” (Chan and Clark, 1992; Clark 1989; Galenson, 1979; Gold 1986; Haggard, 1990; Ho, 1978’ Myers, 1984; Ranis, 1992 and 2011; Wade, 1990; Winckler and Greenhalgh, 1988). For this reason, Taiwan becomes a very interesting model for developing countries seeking to formulate similar strategies in order to achieve the same level of economic development. Approximately 750 miles south of Taiwan is the Philippine archipelago (Figure 1.1). In the past couple of years, the country has been experiencing growth like that of China and India. In 2014, the country’s GDP grew by 6.1% and could potentially hit 9% in 2015 (Sembhy, 2015). It is likewise included in the Tiger Cub Economies, a term coined to refer to Indonesia, Malaysia, 1.

(13) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. Philippines and Thailand who are following the same export-driven model of economic development used by Hong Kong, Singapore, South Korea and Taiwan, also known as the Four Asian Tigers. With Taiwan as one of the success stories emerging from the Asian Tigers, the study looks at how it can become a model for a tiger cub economy like the Philippines.. 立. 政治大. ‧. ‧ 國. 學 sit. y. Nat. n. al. er. io. Figure 1.1. Map of Taiwan and the Philippines.. Ch. i n U. v. Economic growth is the main indicator for the beginnings of economic development. engchi. measured by the real Gross Domestic Product (GDP). It serves as the measure for the average income of a country which is equivalent to the market value of all final goods and services produced within the country within a given period of time (Mankiw, 2015). Spengler (1960) describes economic growth by stating the opposite: economic backwardness. This is characterized by various circumstances unfavorable to economic growth such as the society being traditionbound, stable and disposed to preserve stability. Family is usually extended, meaning that aside from the nuclear unit composed of parents and children, other family members such as. 2.

(14) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. grandparents, uncles, aunts and cousins. Land is communally owned and operated. Educational attainment, as well as literacy is low. While Taiwan has visibly reached this growth, the Philippines is still in the process of attaining the same level of progress and the country, its citizens and even the world remain optimistic. Proof of this is the PricewaterhouseCoopers (PwC, 2015) report entitled: “The World in 2050: Will the shift in global economic power continue?” which analyzes high-level trends that are expected to shape the global economic landscape in the coming decades. The report describes. 政治大 and Western Europe toward Asia and a cluster of faster-growing emerging economies. The 立 a dramatic shift in global economic power away from the advanced economies in North America. ‧ 國. 學. forecast projects a slightly more than 3% per year growth from 2014 to 2050, which can double in size by 2037 and may triple by 2050. Figure 1.2 below illustrates a summary of the global ranking. ‧. of world economies in terms of annual average real growth per capita.. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. (Source: PwC, 2015). Figure 1.2 Breakdown of components of average real GDP growth (2014-2015) 3.

(15) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. (Source: PwC, 2015) Figure 1.3 GDP at PPP rankings Figure 1.3 clearly establishes experts’ optimistic forecasts on the economic growth and performance of the Philippines. Coupled with this forecast, the Philippines needs to actively pursue concrete measures in ensuring that its economic goals is backed up with feasible and sustainable. 4.

(16) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. programs that will implement these strategies to achieve the country’s goals. In another study conducted by the Asian Development Bank (ADB) on a recent review of the operations and challenges in Southeast Asia has declared that the Philippines “is expected to reach upper middleincome level in the next four years backed by significant improvements in its public sector management operations and social welfare programs” (The Manila Times, 2016). This supports PwC’s forecast on the progress of the Southeast Asian country. Table 1.1 Annual Average Growth Rate of Real Per Capita GDP: 1950-2010 (in percent) (Tiger Economies) 1951-60. Taiwan. 7.6. 立7.1. ‧ 國. 9.2 5.4 5.1. 政1971-80治 1981-90 大. 7.4 5.8. 6.8 7.1 5.4. 5.4 5.0 7.7. 9.6. 9.3. 8.2. 1991-00. 2001-10. 3.0 4.7 5.2. 3.2 2.0 3.5. 5.5. 2.7. 學. Hong Kong Singapore South Korea. 1961-70. ‧. Sources: Asian Development Bank (ADB); National Statistical Coordination Board (NSCB). sit. y. Nat. To compare, Table 1. 1 illustrates the annual average growth rate of real per capita GDP of. io. er. Tiger economies from 1950-2010. Looking at Taiwan, it displays an increasing and improved GDP. al. iv n C alongside it. Out of the Tiger economies,hit exhibits the highest e n g c h i U growth, albeit decreasing after the n. per capita covering the period of the existence of JCRR from 1948 to 1978 and the efforts pursued. 1980s. In the period of 1951-1960, it recorded the 2nd highest growth in Real GDP per capita after Hong Kong. However, from 1961-1990, it displayed the highest growth rate in real GDP per capita among the four economies. This indicates a vastly improved performance that can be attributed to the initiatives undertaken by the JCRR. With this, Taiwan can be considered as a model in economic development among the Tiger economies as it displays the best performance out of the four during this period.. 5.

(17) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. Table 1.2 Annual Average Growth Rate of Real Per Capita GDP: 1950-2010 (in percent) (Tiger Cub Economies) 1951-60. 1961-70. 1971-80. 1981-90. 1991-00. 2001-10. Malaysia Thailand Indonesia. 3.6 5.7 4.0. 3.4 4.8 2.0. 5.3 4.3 5.3. 3.2 6.3 4.3. 4.6 2.4 2.9. 2.2 3.1 3.8. Philippines. 3.3. 1.8. 3.1. -0.6. 0.9. 2.3. Sources: Asian Development Bank (ADB); National Statistical Coordination Board (NSCB) On the other hand, among the Tiger Cub economies, the Philippines clearly lags behind the. 治政大than Malaysia from 2001-2010 by term of performance from 1951-2000 even it performed better 立 merely 0.1%. In the past couple of years, the country is striving to perform better and its efforts three other countries from 1951-2010 in terms of real GDP per capita. It consistently places last in. ‧ 國. 學. have been recognized by different international organizations and think-tanks (PwC, 2015. ADB,. performance in order to achieve further economic growth.. Nat. sit. y. ‧. 2014, 2015). With this, it is crucial for the Philippines to be able to continue this positive. io. er. Based on these studies and forecast, this paper will focus on Taiwan and the Philippines. al. iv n C economies aiming to attain the level of economic of the former. Comparison will be made h e n ggrowth chi U n. since Taiwan is one of the successful Asian Tigers and the Philippines is one of the Tiger Cub. since, at a glance, Taiwan and the Philippines share some characteristics such as having the history of colonization, both are democracies and have unitary form of government and such. Taiwan’s economic reconstruction started in the late 1940s through its agricultural sector which was the most affected during the Second World War. This period saw the government actively promoting the agricultural and industrial as well as transportation infrastructure reconstruction. In the next decade, it went on to pursue import substitution measures based on. 6.

(18) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. labor-intensive light industries resulting in a period of rapid export growth in the succeeding decades (ROC, Ministry of Economic Affairs, 2015). At the same time, the Philippines was experiencing a rapid growth it its economy. Though it seemed like it was poised to become a tiger economy, a rapid decline was seen in the 1980 following the political turmoil brought about by the dictatorship of the late President Ferdinand Marcos and his subsequent ousting after a peaceful revolution. Since then, the Philippines has been trying to slowly recover and boost its economy.. 政治大. The study will look into how Taiwan pursued and underwent capacity building initiatives. 立. as highlighted in the Joint Commission on Rural Reconstruction in comparison to the Philippines’. ‧ 國. 學. Development Plan 2011-2016 which is currently used as a blueprint for the country. This paper is organized in five chapters. Chapter 1 provides a background on the study as well as the objectives. ‧. and research questions to be addressed. It also highlights the significance of the study and the. Nat. sit. y. delimitations. Chapter 2 discusses the existing literature on the subject-matter being studied.. n. al. er. io. Chapter 3 provides a general view of how the research will be conducted. Chapter 4 presents the. i n U. v. data collected from books, journals and other pertinent documents as well as interviews with. Ch. engchi. subject matter experts for both countries. Finally, Chapter 5 discusses the findings and conclusions as well as recommendations on how Taiwan’s experience can be a model for the Philippines. RESEARCH OBJECTIVES The study will look into Taiwan’s historical record on its political and economic development as well as the Philippine one. By comparing the experience of these two countries, the researcher aims to satisfy the following objectives:. 7.

(19) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. 1.. Identify the capacity building initiatives that contributed to the economic growth of Taiwan;. 2.. Determine how capacity-building initiatives, specifically foreign aid and human resource development became instrumental in Taiwan’s economic growth.. 3.. Come up with possible policy recommendations that can aid the Philippines in its transformation from a Tiger Cub to a Tiger economy following Taiwan’s example.. RESEARCH QUESTIONS. 政治大. Based on the research objectives outlined, the study aims to answer the following questions:. 立. 1. Under what conditions was Taiwan able to reach its economic goal?. ‧ 國. 學. 2. What capacity building initiatives were pursued by Taiwan in order to achieve economic growth?. ‧. 3. What specific areas should the Philippines strengthen/improve in order to achieve the. Nat. io. sit. y. same growth as Taiwan?. n. al. er. SIGNIFICANCE OF THE STUDY. i n U. v. In the Philippines’ initiative to further boost its growth and to attain the economic growth. Ch. engchi. enjoyed by Taiwan, the study is significant in contributing to the literature which can help determine possible institutional and policy projects to obtain these goals. The study can help identify both weak and strong points that the Philippines currently possesses as well as provide suggestions on how these points can be improved. Being dubbed as one of the Four Tiger Cub economies, the Philippines can learn a lot from Taiwan who underwent a similar route to achieve its economic growth and development. In order to realize the projections indicated in the PricewaterhouseCooper (PwC) report, the Philippines has to take concrete steps in strengthening its capacity building initiatives. 8.

(20) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. DELIMITATIONS This study is delimitated to the analysis of Taiwan’s Joint Commission on Rural Development and the Philippines’ Development Plan for 2011-2016. These documents highlight the capacity building initiatives undertaken by both countries to achieve their economic goals. In the case of Taiwan, the document recorded its conditions prior to achieving its Tiger economy status. For the Philippines, the Philippine Development Plan 2011-2016 highlights the initiatives undertaken by its current administration in order to elevate its position from a Tiger Cub to a Tiger. 治政 of the Philippines, the PDP only cover six years since it 大 is the first time that the plan was 立. economy. JCRR covered capacity building initiatives over a 30-year period. However, in the case. documented clearly as such, thus the difference of period covered for Taiwan and the Philippines.. ‧ 國. 學. To further understand the initiatives for both countries, interview was conducted with several. ‧. Philippine government agencies directly related to the formulation of the PDP such as the National Economic and Development Authority, Technical Education and Skills Development Authority,. y. Nat. er. io. sit. Department of Labor and Employment as well as the Development Academy of the Philippines to further understand how the initiatives are prioritized, implemented and monitored. The National. n. al. Ch. i n U. v. Economic and Development Authority spearheads the formulation of the Philippine Development. engchi. Plan in partnership with different government agencies, private sector, non-government organizations and the civil society. For Taiwan, experts directly and indirectly involved in the JCRR were interviewed. Additionally, due to the interchangeable nature of the capacity building and capacity development concepts, discussions on both will be used under one umbrella concept of capacity building which will be used throughout the paper.. 9.

(21) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. CHAPTER II LITERATURE REVIEW This chapter discusses concepts, ideas and theories highlighting the relationship of the variables in the study. It starts by presenting theories and arguments relating to capacity building and economic growth. Then a brief background of both Taiwan and the Philippines is discussed as well as the present initiatives of the Philippines. CAPACITY BUILDING In discussing capacity building, it is crucial to explain first what is meant by capacity.. 政治大 solve problems, and set and achieve objectives in a sustainable manner.” (UNDP, 2016). 立. Capacity is defined as “the ability of individuals, institutions and societies to perform functions, Hall. ‧ 國. 學. (2008), further stresses that capacity is no longer seen in general terms but is specific to a “policy goal, a program or a task. It comprises of multiple dimensions that can be measured independently. ‧. to better portray the actual capacity of an organization”. Therefore, capacity building refers to. sit. y. Nat. the creation and shaping of individuals’, institutions’ and societies’ set of skills needed to reach. io. n. al. er. their specific objectives.. Capacity Building vs. Capacity Development. Ch. engchi. i n U. v. In recent years, the terms capacity building and capacity development have been used interchangeably. Although there remains to be a contention on the use of the term as “building” and “development” connotes different meanings. “Building” is said to refer to creating new institutions and capacities from scratch. It is implied that no institution or capacity exists, thus the need to build. On the other hand, “development” implies that resources are already in place and merely needs to improve on these existing capacities. However, this distinction is not made consistently in the literature. Table 2.1 below illustrates the development of the concept starting from what was known as institutional building in the beginning to what it is referred to today. 10.

(22) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. Table 2.1 The Development of the Concept of Capacity Building. 1960s and 1970s. 立. Emphasis. Management of Individuals “Programmes of Public Institutions Investment” efficient use of existing funds. of 政治 Management “Programmes of 大 Public Investment” efficient use of existing funds Development through competent citizens Sustainable development through a comprehensive approach, with institutions as starting point. Individual Institutions. io. n. al. Ch. Capacity 1990s to present Building and later Capacity Development. engchi. (Source: Kuhl, 2009). 11. y. Nat. 1980s and 1990s. Concentration on education, health and population development Strengthening of institutions in the government, NGO and private sector, including relations to each other as well as their external situations. General concept for linking the other approaches; support for the capacities of the individual, institutional and systemic level. Individuals. ‧. Human Resource 1960s and 1980s Development. New Institutionalism. Buildup of a basic stock of functional institutions in the developing countries as in the West European model Strengthening and restructuring of existing local institutions. Goal. 學. ‧ 國. Institutional Strengthening/ Development. Meaning. sit. Institution building. Emergence Within the Development Discourse 1950s and 1960s. er. Concept. i n U. v. Networks of institution, including general economic, social and political conditions. Sustainable Individuals, development institutions and through a systemic context, comprehensive including endogenous general approach economic, social and political conditions.

(23) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. Based on this progression of the concept, both capacity building and capacity development are still being used today. However, the academe and the field is slowly changing and leaning more towards capacity development. In reality, resources are already in place and institutions are more concerned on improving existing resources and capacities rather than creating it from scratch, thus the term can be interchangeable. In terms of what can be considered or classified as capacity, this can also vary based on the individual, organization and society. As Bowman and Kearney (1988) argues, capacity should be defined based on what the individual, organization or society. 治政 and operational support (Frederickson and London, 2000) or大 even the ability to attract resources 立. possesses. It can be human resource factors, leadership and vision, management, strategic planning. (Honadle, 1981). Almost anything that the object of query possesses then can be considered. ‧. ‧ 國. 學. capacity.. For the purpose of this study, the term capacity building will be used, assuming that some. sit. y. Nat. form of resources and institutions are already in place and what is needed is to propagate it. For. io. al. er. the succeeding discussions, arguments pertaining to capacity building and capacity development. n. will be used under one umbrella concept. Discussions and Studies. Ch. engchi. i n U. v. Several scholars and development institutions provide different definition for capacity building: The United Nations Development Program (UNDP, 2016) defines capacity building as “a long-term continual process of development wherein individuals, organizations and societies obtain, strengthen and maintain the capabilities to set and achieve their own development objectives over time.” This involves both private and public stakeholders; including but not limited to ministries, local authorities, non-governmental organizations, professionals, community members, academics and more. 12.

(24) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. Other definitions of capacity building include: “..the development and strengthening of human and institutional resources. It is acknowledged that the process needs to go beyond the public sector, as it is also influenced by entities in the private sector including commercial enterprises and nongovernmental organizations.” (WHO, 2016) “The creation of an enabling environment with appropriate policy and legal frameworks, institutional development, including community participation, human resources development, and. 政治大. strengthening of managerial systems” (Alaerts et al., 1991).. 立. ‧ 國. 學. All these definitions of capacity building highlights the need to develop appropriate institutions, policies and frameworks including human resources development, strengthening of. sit. y. Nat. development.. ‧. managerial systems and community participation and ownership to support long-term. io. er. The concept of capacity building conveys the idea of potential (Ife, 2010); which assumes that if one country has the “capacity” then it has the potential to achieve something. It is also. al. n. iv n C assumed that it is not operating to its full building its capacity can actually help it hpotential, e n g cthus hi U. achieve more. With this, it can be assumed that all countries have potentials. What is important is to build up these potentials by applying appropriate capacity building exercises. It should not merely replace existing capacities with new knowledge and systems from developed countries. It should strengthen and equip existing capacities with needed resources, systems and skills in order to sustain its own development. Both UNDP and JICA (2016) have identified three levels in capacity building: individual, institutional/organizational and societal. These levels are interdependent and a certain level of 13.

(25) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. integration is needed to achieve the goals for capacity building. Figure 2.2 below illustrates these three levels in capacity building: 1. Individual level – On an individual level, capacity building requires the development of conditions suitable for an individual to build and enhance their knowledge and skills. Part of this requires for the establishment of conditions that will allow individuals to engage in the process of learning and adapting to change. 2.. Institutional level – On an institutional level, capacity building should strengthen. 政治大. institutions by modernizing and supporting the formulation of sound policies,. 立. organizational structures and effective methods of management and revenue control, not. ‧ 國. 學. just merely creating new institutions. This would mean that existing institutions need to be evaluated in order to determine which of these areas need to be focused or strengthened.. ‧. 3. Societal level – On a societal level, capacity building is rooted in the support for the. Nat. sit. y. establishment of an interactive electorate that actively receives feedback from its. n. al. er. io. constituents based on their needs. This is done in order to develop leaders and institutions. i n U. v. that are proactive, reactive and accountable. The enabling environment provides the. Ch. engchi. overall scope for capacity building.. 14.

(26) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. Targets of Capacity Building. Societal. Conditions or environment conducive to exercising the capacities of institutions and individuals.. Institutional. Strengthening organizational culture, systems and leadership on each institution.. 立. abilities of the individual in order to perform efficiently and effectively according to the goals set.. 學. Figure 2.1 Levels of Capacity Building. Nat. y. ‧. ‧ 國. Individual. 政治大Enhancing knowledge, skills and. sit. The three levels emphasize the need for change management and adaptability, formulation. n. al. er. io. of sound policies and transparency and openness to feedback of institutions. There is a need to. i n U. v. ensure that all elements in each level is enhanced to guarantee that each level complements each. Ch. engchi. other in order to achieve the overall objective. The improvement of each level helps to further improve the other levels. In other words, enhancing the individuals’ knowledge, skills and abilities which enable them to efficiently and effectively perform their duties can spillover on how the organization or institution works as a whole. This improvement is achieved if conditions wherein individuals and institutions perform is conducive to exercise these enhanced capacities. In relation to these levels, UNDP (2016) likewise enumerates four core issues that can affect the abovementioned levels. First is institutional arrangements which are the systems,. 15.

(27) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. policies and norms that allow for effective operation of an institution or a group. This can include by-laws, contract, codes of conduct and generally accepted practices and values within an organization. The second core issue is that of leadership. This pertains to the ability to influence, motivate and inspire people to achieve goals. It also includes pro-activeness and change management. It is not limited to a position of power or authority but can encompass informal leadership that enables mobilizing people toward a certain goal. Another core issue is knowledge which relates to what individuals know and the skills they are capable of. Enhancing knowledge. 治政大 Finally, there is the issue of on-the-job-training as well as other modes of acquiring information. 立 is traditionally done through education which can be done through training, classroom settings,. accountability. In capacity building, accountability is critical in monitoring, learning, self-. ‧ 國. 學. regulating and adjusting based on the feedback of those people the institutions and individuals are. ‧. accountable for. It allows for constant monitoring and adjustment which can help in the effective achievement of goals.. n. er. io. sit. y. Nat. al. Ch. engchi. 16. i n U. v.

(28) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. 學 ‧. ‧ 國. 立. 政治大. (Source: UNDP, 2016). sit. y. Nat. Figure 2.2 Capacity Building – Core Issues. er. io. CAPACITY BUILDING AND ECONOMIC GROWTH. al. n. iv n C Institutional Economics (NIE) due to its h focus e nongthecinstitutional h i U environment and its rules as well In associating capacity building to economic growth, we look into the theory of New. as on governance and the interactions of individuals (Williamson, 2000). Talking about government-driven capacity building initiatives, the New Public Management (NPM) is also a good starting point coupled with the NIE theory. NPM incorporates economic ideas to ensure more efficient and effective delivery of service. Lynn (1998) summarizes the elements of new public management:. 17.

(29) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. 1. A stronger emphasis on performance-motivated administration and inclusion in the administrative canon of performance-oriented institutional arrangements, structural forms and managerial doctrines; 2. An international dialogue on and a stronger comparative dimension to the study of state design and administrative reform; 3. An integrated use of economic, sociological, social-psychological and other advanced conceptual models and heuristics in the study of public institutions and management.. 政治大 models aims to professionalize public management and make use of these different approaches to 立 NPM’s emphasis on performance-based administration and integrated use of different. ‧ 國. 學. enhance the government’s efficiency.. Capacity building initiatives have become foundations for a wide variety of development. ‧. projects all over the world. It is used in the United States President’s Emergency Plan for AIDS. Nat. sit. y. Relief (PEPFAR, 2012). McGuire, Rubin, Agranoff and Richards (1994) identified that “the. n. al. er. io. primary responsibility for economic growth and survival has gradually shifted from the national. i n U. v. government to communities and their local governments. Development capacity of communities. Ch. engchi. become a prime determinant of economic and thus governmental performance. Capacity has long been identified as an important correlate of effective governance.” In their study, the authors observed that small communities who have undergone strategic planning exercises have higher levels of development capacity compared to similar communities without prior strategic planning experiences. Similarly, the World Bank (2014) conducted several case studies involving government ministries from the Gambia, Laos, Sierra Leone and Timor-Leste. For Gambia, the Ministries of Finance and Economic Affair (MoFEA) and Basic and Secondary Education (MoBSE) have put in place several reforms in different sectors to propagate growth. MoFEA 18.

(30) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. curbed overall spending through strict cash budgeting while at the same time continued funding programs in health, agriculture and education. MoBSE implemented construction of more schools, trained a larger number of teachers and instructors as well as introduced innovative programs for hard-to0reach communities. This resulted to a greater number of people gaining access to education. In the case of Laos, despite legitimacy concerns towards the government, the Ministry of Public Works and Transport (MPWT) led the construction and expansion of the country’s road. 政治大 opportunities of the citizens. Due to this projects, the MPWT, in turn, has strengthened the 立. network which resulted to an improvement in the transportation and access to economic. ‧ 國. 學. legitimacy and support not just for the ministry but for the government as a whole. The country’s growth felt more inclusive to its citizens since their access to economic opportunities have. ‧. expanded due to this.. Nat. sit. y. Capacity building can be done in a wide array of sectors. What is crucial is to be able to. n. al. er. io. identify existing capacity and needs as well as to engage involved parties in working together to achieve their collective goals.. Ch. engchi. i n U. v. SIMILARITIES AND DIFFERENCES OF TAIWAN AND THE PHILIPPINES The determination of using Taiwan and the Philippines in this study was not done at random. As discussed in Chapter 1, the basis for the comparison is that Taiwan is one of the Tiger economies that illustrated the better performing economic development in East Asia. On the other hand, the Philippines is one of the Tiger Cub economies of Southeast Asia demonstrating the same track seen from the Tiger economies. The comparison will be done to determine how Taiwan was able to reach its economic development in an attempt to provide the Philippines with a model on how to achieve similar success. 19.

(31) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. Table 2.2 highlights the basic characteristics of both Taiwan and the Philippines: Table 2.2 Profile of Taiwan and the Philippines COUNTRY Official Name. TAIWAN Republic of China. International Short Form Capital City Government. Taiwan Taipei Multi-party democracy; Unitary semi-presidential constitutional republic 23,441,708 (July 2015) 1 Putonghua (Mandarin Chinese, Official), Holo Taiwanese (spoken by Hakka minority), other indigenous languages (Formosan) Eastern Asia, islands southeastern of the coast of China. Population Language. 政治大. 102,155,941 (October 2015) 2 Filipino and English. Southeastern Asia, archipelago between the Philippine Sea and the South China Sea, east of Vietnam Catholic 8%, Muslim 15%, Christian denominations and Buddhist Malay, Chinese other indigenous groups. 學. Geography *. ‧. ‧ 國. 立. PHILIPPINES Republika ng Pilipinas / Republic of the Philippines Philippines Manila Unitary presidential constitutional republic. Mixture of Buddhist, Confucian and Taoist (93%), Christian (4.5%) Taiwanese (including Hakka) Ethnic Groups * 84%, Mainland Chinese 14%, aborigine 2% New Taiwan Dollar Philippine Peso Currency 36,188km2 (13,972 sq. mi) 300,000 km2 (115,739 sq mi) Area 1 National Statistics, Republic of China (http://eng.stat.gov.tw/point.asp?index=9) 2 Commission on Population, Republic of the Philippines (http://rpo3.popcom.gov.ph/) Religion. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. At a glance, differences and similarities can already be observed. Both countries are unitary presidential constitutional republics and geographically located near each other which can more or less determine similar environmental factors and are composed of several ethnic groups. However, in terms of population and land area, the Philippines is more than five times as big as Taiwan.. 20.

(32) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. Beyond this initial comparison, it is important to look deeper in each of the country’s history in order to formulate a more substantial analysis. Chapter 4 will further discuss on both Taiwan and the Philippines’ history and economic journey.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. 21. i n U. v.

(33) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. CHAPTER III RESEARCH METHOD This chapter highlights the approach used in conducting the study. It begins with an overview of the framework which presents a general picture on how the flow of the study will be conducted. It then continues on by presenting the research approach and procedure. RESEARCH FRAMEWORK The proposed research will look into how Taiwan has achieved its status as one of the four Tiger Economies (along with South Korea, Hong Kong and Singapore). While the Philippines is. 政治大 and Indonesia, it still has a long way to go before it can reach Taiwan’s growth. 立. tagged as one of the emerging economies in the Asia-Pacific region along with Malaysia, Thailand. ‧ 國. 學. The study will focus on Taiwan’s initiatives specifically the way it has utilized foreign aid in order to develop the country as well how it has evolved from an aid recipient country to a donor. ‧. country within 30 years. It is interesting to note that both the Philippines and Taiwan have been. Nat. n. al. Ch. er. io. technical assistance to name a few (USAID, 2016).. sit. y. aid recipients since 1946, with USAID providing infrastructure, agricultural and training and. i n U. v. Following the UNDP approach to capacity building, Figure 3.1 below illustrate the process. engchi. of capacity building for countries and institutions. First and foremost, it is essential that stakeholders are informed and engaged in the objectives set. This is to ensure that there is a uniform understanding by all the stakeholders of the problems faced as well as the tasks and goals that need to be undertaken. Once all parties involved have the same general understanding of the task at hand, an objective assessment of the capacity needs and assets should be done. This should take into consideration all the strengths and weaknesses possessed as well as the gaps that need to be addressed. Based on this assessment, the next step would be the formulation of a capacity building program specifically focused on the needs identified. This should consider existing and needed 22.

(34) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. resources, knowledge and skills to tackle the programs. After which, a careful implementation follows. This should be done in a systematic way to ensure that all areas are covered. Finally, as any good project doesn’t stop with implementation, evaluation of results as well as appropriate adjustments need to be done in order to ensure that the program meets the objectives specified.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. (Source: UNDP, 2016). Ch. engchi. i n U. v. Figure 3.1 Capacity Building Process For the purpose of this study, we look at two variables, capacity building as the independent variable and economic growth as the dependent variable. To further clarify the use of these variables, the researcher will operationalize these variables as follows: Capacity Building: enhancement and strengthening of human resource, institutions and systems that contribute to the achievement of economic goals. This includes specific 23.

(35) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. programs such as trainings, infusion of new knowledge, building of facilities and equipment geared towards enabling human resources, institutions and systems to acquire new and strengthen existing skills in order to perform their tasks better and contribute to the attainment of the overall objective. Economic growth: increase in the country’s economy measured by an increase in GDP per capita. Such operationalization is done in order to easily determine what values the study is. 政治大. looking at in order to answer the research objectives and research questions stated in Chapter 1.. 立. Using the UNDP’s (2016) core issues on capacity building: institutional arrangements,. ‧ 國. 學. leadership, knowledge and accountability, the conceptual framework on Figure 3.2 has been. ‧. formulated. In this framework, institutional arrangements is re-labeled as institutions. This refers to the policies, institutions (offices or agencies) and systems in effect in the country. Knowledge. y. Nat. io. sit. is renamed as human resource development. This pertains to the approaches used to ensure that. n. al. er. individuals within the institution or country are given the proper knowledge, skills and capabilities. Ch. i n U. v. that will promote the achievement of the goals. Finally, leadership and accountability is merged as. engchi. good governance. This is to illustrate the leaders’ accountability in making sure that the implementation of capacity building initiatives are properly done, monitored and evaluated. Together, these three form the concept of capacity building discussed in this study. In relation to economic growth, the study would like to determine if the presence of well-developed human resources, strong institutions with efficient and effective systems and good governance can lead to economic growth.. 24.

(36) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. Making use of the ideas from the theories of NPM and NIE, a conceptual framework can be formulated as illustrated in Figure 3.2. In order to create capacity building initiatives, the proper institutions must be in place. This includes different agencies that tackle specific services and outputs in order to ensure effective delivery; strong, educated and well-equipped manpower to complement and implement the programs of the agencies and finally, leadership and governance that provides direction that can lead the manpower and institutions in order to make achieve the development goals of the country as a whole.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. Figure 3.2 Conceptual Framework. RESEARCH PROCEDURE This section presents the process on how the study was formulated. The researcher followed the process flow as shown on Figure 3.3. The starting point for the study is the emergence of the so-called Tiger Cub economies and the existence of the Tiger economies. Since the Tiger 25.

(37) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. Cub economies are following the same track as the Tiger economies, a look into how a transformation from a cub to a full-grown economy is warranted. Multiple journal articles, books, institutions focusing on capacity building and economic growth was perused to accumulate competing theories and arguments about the subject-matter. Thereafter, research objectives and research questions were identified to determine how the possible outcome would be significant in the existing literature. Based on this, a research framework was likewise formulated. Theories supporting the hypothesis were selected to support the study being undertaken. Based on these. 治政大further understand the initiatives experts and policy-makers. Interviews will be conducted to 立. documents, a set of questions were formulated to serve as interview questions for subject-matter. undertaken by the country in focus in order to clarify previously published articles as well as obtain. ‧ 國. 學. details on future initiatives. This will also be part of the data collection.. ‧. After conducting the interviews, transcription, analysis and comparison to existing body of. sit. y. Nat. knowledge will be done. In the end, it is the hope of the researcher to formulate policy. io. n. al. er. recommendations based on the interviews and historical events and strategies used.. Ch. engchi. 26. i n U. v.

(38) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. Reviewing related literature and determining the topic to be studied. Identifying the research objectives and significance of the study. Formulating the research questions. 政治大. 立Formulating the research. ‧ y. io. sit. Nat. Developing Interview Questions. n. al. er. ‧ 國. 學. framework. Ch. i n U. Data Collection and Interviews. engchi. v. Data Analysis. Conclusion and Recommendation. Figure 3.3 Research Procedure 27.

(39) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. RESEARCH DATA ANALYSIS The conduct of the study will be qualitative in nature, gathering and analyzing findings of previous researches from journals, books, news articles, official public documents and other relevant sources. Interviews of subject matter experts (SME) will also be conducted in order to support the findings from previous researches. For the purpose of the study, the researcher will draft interview questions meant to be addressed by subject matter experts as well as personnel directly involved in the conduct of the. 政治大. subject matter. The interview questions formulated were patterned after previous interviews. 立. 學. ‧ 國. conducted.. Criteria for Selection of Interviewees. The interviewees were selected based on the following criteria:. ‧. 1. They must have been in service for at least 5-10 years.. y. Nat. n. al. er. io. development plan.. sit. 2. They must have a direct participation in the formulation and/or implementation of a. Ch. i n U. v. 3. They belong to an institution with direct participation in the formulation and/or. engchi. implementation of a development plan such as: a. Philippines i. Development Academy of the Philippines (DAP; ii. National Economic and Development Authority (NEDA); iii. Department of Labor and Employment (DOLE); iv. Technical Education and Skills Development Authority (TESDA) b. Taiwan i. Agricultural Technology Research Institute (ATRI); 28.

(40) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. ii. Council of Agriculture; iii. Former Joint Commission on Rural Reconstruction ministers. The study will base its analysis using the UNDP Model, NPM and NIE concepts. It will be used to see how the different capacity building elements work together to achieve economic growth experienced by Taiwan and how it can be used by the Philippines. As pointed out earlier, capacity building differs in each country depending on the inherent capacity of the country in question. The theories can help analyze how previous experience of Taiwan can be used a model by the Philippines.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. 29. i n U. v.

(41) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. CHAPTER IV RESULTS AND DISCUSSIONS In this chapter, findings and discussions will be presented in order to determine whether the research questions have been satisfied. The results are based on the literature and document review, responses from interviewees and assessments based on the UNDP model. TAIWAN’S ECONOMIC JOURNEY Taiwan has been widely admired as the leading member of the family of East Asian “miracles” (Ranis, 2011). However, Ranis (2011) argues that Taiwan’s situation is no “miracle”. 政治大 colonial history under Japanese rule made an important contribution to the island’s subsequent 立 and is in fact a combination of initial conditions and policy choices made over time. Taiwan’s. ‧ 國. 學. economic growth. Japan exhausted substantial resources on Taiwan’s rural sector through infrastructure development such as creation of roads, drainage, irrigation and power construction. ‧. projects. Further, it improved rural institutional infrastructure through the propagation of. sit. y. Nat. agricultural research, experimental stations and the establishment of farmers’ associations. All. io. er. these capital and institutional investments helped the country’s agricultural revolution. Aside from. al. agricultural investments, Japan likewise boosted Taiwan’s primary education. By then, an. n. iv n C estimated 27% of the population was literate h e nduegtocfree h i andUcompulsory primary education and 79% of the primary-school aged population were attending classes (Galenson, 1979).. Another factor that helped propel Taiwan’s growth after the World War II is the United States intervention through aid assistance from the late 1940s to 1970s. Part of the help given by the US is the creation of the Joint Commission on Rural Reconstruction (JCRR) and farmers’ associations which provided the framework of decentralized decision-making through the promotion of economic democracy. During the time of the JCRR, a three-step land reform was sought to complement the agricultural infrastructure development. Prior to the creation and 30.

(42) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. implementation of the JCRR, the Japanese has heavily invested in Taiwan’s infrastructure. Although most of the efforts are primarily to benefit Japan’s own interest, Taiwanese people are still able to enjoy these. Further, Ranis (2011) cited the overall scarcity of natural resources of Taiwan as a reason why it focused on initiatives enhancing human capital and overall human development. This supports Collier (2007) argument of a natural resource trap wherein resourcerich countries tend to be poor as they are not utilized well. In the case of Taiwan, their lack thereof propelled them to focus on their other resources which is their people. Taiwan’s strong institutions. 政治大 Due to the early mobilization of the agriculture sector, required domestic savings were met 立. likewise strengthened their initiatives towards economic growth.. ‧ 國. 學. and the move from import-substitution to export-driven activities was done. Instead of focusing on traditional crops such as sugar and rice, focus was given to the production of mushrooms and. ‧. asparagus (T2, Interview). Government-supported research and technology-diffusion activities. sit. y. Nat. further boosted agricultural production. Aside from the rural infrastructure inherited from its. io. er. colonization experience, the government itself made continuous efforts in investing in other. al. iv n C the momentum was sustained. Its export-oriented coupled with rural industrialization in h e n ginitiatives chi U n. infrastructures such as communications, transportation and power. Its government made sure that. the form of construction of several export-processing and factory zones accelerated its learning and development specifically in the private sector. Further government support can also be observed especially in its policy towards education which initially stressed compulsory primary education but later on pushed for compulsory education. This boosted the country’s human resource. Additionally, part of the educational policy offered vocational training complementing the need for cheap yet efficient and literate labor force which is able to flexibly meet the rapidly changing need for the workforce to support its export31.

(43) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. oriented development drive. Another important feature of the education sector is the examination system which emphasized meritocracy instead of influence, family connections or ability to pay. The government likewise imposed and adjusted entry quotas based on the need of the economy by providing financial incentives for new departments. Formal research and development (R&D) programs were also favorably financed ranging from informal blue-collar industries to high-tech manpower and investments. Overall, government had played a huge role in driving the country’s development.. 政治大 reach its economic goals as well as the specific capacity building initiatives pursued to achieve 立 In the succeeding pages, the study explores the conditions wherein Taiwan was able to. ‧ 國. 學. these goals.. Joint Commission on Rural Reconstruction 1948-1978. ‧. Through the 1948 ECA China Aid Act Section 407 of Public Law 472 of the United States. Nat. sit. y. Congress, the Government of the United States and the Government of China entered into an. n. al. er. io. agreement via the Sino-American Joint Commission on Rural Reconstruction (JCRR). The. i n U. v. Commission was mandated to formulate and carry out a coordinated reconstruction project for the. Ch. engchi. rural areas of China. As a temporary agency, it was empowered to assist in the rural reconstruction of China thru technological and institutional innovation. It also advised on and monitored several government policies on land reform, budgetary and technical influence which spread its impact on the upliftment of rural life (Howe, 2001). Under the agreement, ten percent (10%) of the economic aid given to China will be directed to rural reconstruction (JCRR, 1968). Although initially set-up in Nanjing, China, it was transferred to Taiwan in 1949 following the take-over of communists in China (T1, Interview). Its main objective was to rebuild Taiwan after the World War II due to. 32.

(44) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. massive devastation brought about by the war. At that time, the country had no industries to speak of. On official capacity, JCRR had the following objectives and principles: 1. There must be a felt need for JRCC services and activities on the part of the rural people. 2. There must be fair distribution of accrued benefits 3. There must be a sponsoring agency qualified to utilize effectively the JRCC assistance 4. There should be a demonstration of feasibility of any particular project or activity. 政治大. before undertaking its broad expansion (USAID, 2016. JCRR, 1978).. 立. In the case of the initiatives pursued by JCRR, the capacity building process was clearly. ‧ 國. 學. followed. First, it engaged stakeholders to be able to ensure that proper support and needed manpower is available to pursue these goals. This includes JCRR ministers, the government and. ‧. other ministries and private sector that are involved in the initiatives. After which, the Commission. Nat. sit. y. assessed the capacity assets and needs of the country. Since most of the population are farmers,. n. al. er. io. initial focus on the agriculture sector was sought. Farmers’ associations were revitalized since it. i n U. v. was recognized that these associations can help in the mobilization of farmers. Once stakeholders,. Ch. engchi. assets and needs are identified, these became bases for formulating the capacity building program. For JCRR, they outlined specific projects to address the existing needs of the country and to be able to rehabilitate it as a whole. Implementation was overseen by the JCRR in partnership with t the government and the FAs. Finally, to ensure that the projects pursued are able to address changing needs overtime, these were evaluated regularly and changes were effected as needed. In undertaking agricultural planning, JCRR created drafts on the preliminary programs based on guidelines set by the Council for Economic Planning and Development (CEPD). The Commission officially existed from its conception in 1948 until 1979, when the United States 33.

(45) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. withdrew its official diplomatic ties with Taiwan in order to pursue diplomatic relations with China. It then evolved into the Council of Agricultural Development until 1984. After 1984, it became what is still called today as the Council of Agriculture (T2, Interview). However, throughout its existence, the commission evolved from its initial focus and sought to do the following: 1. Post-War Rehabilitation; 2. Land Reform program; 3. Reorganization of Farmers’ Associations;. 政治大 Human Resource Development; and 立. 4. Rural Health and Sanitation; 5.. ‧ 國. 學. 6. Technological Innovation (JCRR, 1978).. Based on the conceptual framework used in this study, the initiatives will be categorized. ‧. based on the concepts mentioned: good governance, institutions and human resource development.. n. er. io. sit. y. Nat. al. Ch. engchi. 34. i n U. v.

(46) Comparative Study on the Role of Capacity-Building in Economic Growth from Foreign Aid between Taiwan and the Philippines Riofrio, Angelica Sarah C.. 學. (Source: JCRR, 1978). io. sit. y. Nat. Good Governance. Figure 4.1 JCRR Organizational Chart. ‧. ‧ 國. 立. 政治大. n. al. er. The Taiwanese government continued Japan’s program of extensive rural electrification. Ch. i n U. v. while constructing rural industries that enabled farm families to supplement their incomes by. engchi. working in decentralized factories (CEPD, Taiwan Statistical Data Bank, (1989). The government had a strong vision to elevate Taiwan’s economic standing from a traditional to a modern and progressive one. This is evident in the numerous efforts it has undertaken in order to complement the JCRR’s initiatives such as the three-step land reform policy, the nine-year public education policy as well as its thrust in offering universal literacy coupled with vocational and science-based learning.. 35.