technologies that could increase the seamlessness of cross-border flows, but thesewere not found. There are also the events that have occurred since the book wentto press. The rapid increase in the price of petroleum-based fuels during 2008 wasleading to major concerns about the spatial extent of existing supply chains, andat least some firms were considering decreasing the length of these. However, eventhis notable event has been eclipsed by the economic collapse brought on by thesub-prime mortgage fiasco. The latter events will undoubtedly have severe nega-tive impacts on trade flows over the next 2 or 3 years, but the global economy willrecover and once again we will find the subject matter of this volume of primaryimportance.

William R. BlackIndiana University

Email: black@indiana.edu

© 2009 Wiley Periodicals, Inc.

THE DYNAMICS OF REGIONAL DEVELOPMENT: THE PHILIPPINES IN EAST ASIA

Edited by Arsenio Balisacan and Hal Hill, Cheltenham: Edward Elgar. 2007.xxxi + 482 pp. £85 (hardcover). ISBN 1-84542-838-2.

Decentralisation was embraced enthusiastically by many governments invarious parts of the world over the 1990s as a means of improving service delivery,especially to poorer regions and populations, and accelerating economic growthwith equity. International agencies such as the World Bank were often in thevanguard of promoting decentralisation programmes. Within Southeast Asia,the Philippines began a process of decentralisation in the post-Marcos era with thepassage of the Organic Act for Muslim Mindanao in 1989 followed by the LocalGovernment Code of 1991. Other countries in the region followed suit in the latterpart of the 1990s; Indonesia introduced new legislation in 1999, 1 year after thedeparture of Soeharto from office, which in turn led to considerable devolution ofresponsibilities to sub-provincial levels after 2001. Thailand has also introducedsome measures to devolve more responsibilities to the provinces (changwat),although implementation so far has been slow.

This volume is mainly about the Philippine experience, although one chapterdiscusses Indonesia and another China. Perhaps regrettably, there is no chapter onThailand or on Vietnam, both countries with populations similar in size to the

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Philippines that have achieved rapid economic growth under centralised systems;neither is there any discussion of Malaysia, which, in spite of being much smaller,is the only de jure federal system in the region. The chapter on Indonesia byResosudarmo and Vidyattama gives a balanced overview of both the costs andbenefits of the “big bang” decentralisation process launched in 2001. They con-clude that the increase in accountability should in the longer term lead to improve-ment in performance, although problems have surfaced in the short term that arehaving a negative effect on the investment climate in a number of regions. Song’schapter on China argues that regional inequalities have been rising since the early1990s and that regional disparities in fiscal spending are very large by interna-tional standards. In addition, the taxation system redistributes revenue in favour ofrich localities, and many local governments are highly dependent on extra-budgetary revenues.

But what has been achieved in the Philippines? The chapter by Manasan arguesthat over the 1990s the decentralisation programme appears to have had littleimpact on interregional equity; in fact, the dispersion of provincial per capitaincomes increased until 1997 and declined thereafter. Local government expen-ditures have risen relative to GDP, but as in so many countries there is a mismatchbetween the revenue resources of local governments and their expenditure needs,which in turn reduce incentives for local governments to raise local tax collec-tions. Several authors point to poor infrastructure as a major barrier to decentrali-sation of non-agricultural activities to smaller towns and rural areas, although thechapter by Estudillo, Sonobe, and Otsuka on rural non-farm activities does findsome evidence of industrial decentralisation, especially in the garment and metalcraft sectors. This is confirmed by Tecson; she argues that the measures to libera-lise manufacturing in the 1990s did lead to some dispersion of activities awayfrom Metro Manila, although much went to neighbouring provinces in Luzon orto Cebu.

In the introductory chapter, Balisacan, Hill, and Piza argue that in the past twodecades (since the fall of Marcos) global integration has proceeded more rapidlythan domestic integration, partly because liberalisation measures have inevitablyfavoured some sectors and geographic locations and partly because infrastructurelinks are still very poorly developed in many parts of the Philippines. This is alsotrue in many other parts of Asia, and indeed their comparative data indicate thatregional disparities are lower in the Philippines than in either Indonesia or China.So does the Philippines really have a problem or should economic planners justaccept that economic development is bound to create regional inequalities thatcan only be modified over time by better provision of infrastructure and more

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migration from poor to rich areas? Surely the real challenge for the Philippines isto continue to reduce the incidence of poverty. The concluding chapter by Bali-sacan indicates that there was a decline in the headcount measure of povertybetween 1988 and 1997, although how much of this was because of decentrali-sation is not really clear. Balisacan argues that the elasticity of poverty declinewith respect to GDP growth is rather low by Asian standards and that bettertargeting of anti-poverty programmes is essential. Will further decentralisation ofexpenditures on health, education, irrigation, and agricultural developmentimprove the condition of the poor, or will such expenditures be more skewed to thenon-poor if controlled by local governments? It will be some time before a clearanswer emerges either in the Philippines or in other parts of Asia.

Anne BoothSchool of Oriental and African Studies

University of LondonEmail: ab10@soas.ac.uk

© 2009 Wiley Periodicals, Inc.

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