Are lawyers to blame?

Seeing graphs on social media showing the Philippines near the bottom in a list of ASEAN countries can be depressing.

Is it a problem of leadership? Post-EDSA, we had as our presidents a housewife, a general/engineer, an actor, an economist, a son of a former president, a local politician who is a lawyer and another son of a former president. Among them, it seems it is the general/engineer who did best.

A paper published in the Journal of Economic Development asked: Do lawyers inhibit economic growth? Here are some points that were made:

On the positive side, lawyers supposedly protect the rule of law, defend constitutional and human rights and ensure the bedrock contractual and property rights that promote a civilized society and stimulate economic activity. But Duterte, a lawyer, mercilessly killed thousands of potentially innocent victims without due process.

Critics argue that lawyers and the clients they represent collectively often turn out to be rent-seekers who abuse government powers and contribute little that is positive in an economic sense.

Others complain that there are too many lawyers and that they cost too much; and their work is characteristically bureaucratic. Their shortcomings generate a variety of ill effects, which might well lower the rate of economic growth.

We are often told that China managed its fantastic economic transformation, successfully building high-speed rail, renewable energy and sprawling urban projects at breakneck speeds because it was managed by engineers rather than lawyers and politicians.

That may be partly true but China is also a ruthless dictatorship. The country was just lucky that their leaders, starting with Deng Xiaoping, had a vision for its development in the shortest possible time.

In our case, our oversupply of lawyers seems to have successfully hindered the country’s economic growth. But it isn’t just us.

Studies published by the National Bureau of Economic Research, suggest that a higher concentration of lawyers in a population correlates with slower economic growth due to increased “rent-seeking” behavior and litigation. Conversely, a higher concentration of engineers is linked to faster growth through direct innovation and problem-solving skills.

Lawyers, like those in our government, focus on crafting rules but are very poor at program execution. With the lawyers in our government happily inventing new rules as their sole reason for being, our system freezes, unable to deliver the progress our neighbors attained.

We have a “vetocracy” where necessary infrastructure projects are gridlocked for decades. For example, proponents of MRT-7 first sought government approval from multiple agencies 20 years ago. Imagine that… 20 years… that’s how long it took Vietnam to overtake our economy.

For our struggling economy, the instinct of the lawyers in our government is to draft a new complex regulation, reform the tax code, but neglecting the physical execution of projects. That’s our story over the last 80 years.

On the other hand, when a country is poor and needs to rapidly build basic infrastructure (roads, grids, factories), the engineering approach of forced optimization and no-nonsense execution produces explosive economic growth (e.g., mid-century Japan, South Korea, modern China).

There are other examples cited in studies.

Italy has an extraordinarily high concentration of lawyers per capita compared to Germany. Economists sometimes point to Italy’s decades of stagnant GDP growth as an example of a “lawyer-heavy” institutional framework bogged down by bureaucracy, versus Germany’s traditionally manufacturing-oriented (engineer-friendly) economy.

But then there is Japan. Japan’s spectacular post-WWII “Economic Miracle” was led by legally trained bureaucrats who thought and planned like central systems engineers. These bureaucrats were almost entirely graduates of the elite Tokyo Imperial University (now University of Tokyo) Faculty of Law.

While legally trained, they did not act like Western lawyers focused on litigation or bureaucratic rules. Instead, they acted like industrial architects. They viewed the nation’s economy as a single corporate enterprise that needed optimization, resource allocation and structural design.

Bureaucrats at the Ministry of International Trade and Industry (MITI) selected the winning sectors. They forced the country to shift from cheap textiles into heavy industries like steel, shipbuilding, automobiles and electronics.

Japan’s post-war surge proved that you do not need formal engineers in the prime minister’s office. Japan’s lawyer-bureaucrats transformed its war-torn economy into the world’s second-largest rather quickly.

Then there is Lee Kuan Yew, a lawyer who successfully transformed Singapore into a First World country within his generation. He worked with a powerhouse team of economic technocrats, planners and foreign advisors. He provided the political will, iron discipline and legal frameworks, while his technical teams engineered the actual implementation of Singapore’s economic miracle.

So, lawyers aren’t all bad. Unfortunately for us, our lawyers are more like the American lawyers focused on litigious processes that build stumbling blocks to economic growth.

Our lawyers have also defined and powered our crippling political system that has prevented us from keeping up with our tiger economy neighbors. Example: The Cayetano theatrics at the Senate, powered by lawyers, damaged institutional credibility and increased political risk from an investor’s perspective.

Ironically too, despite our abundance of lawyers, our justice system is so corrupt that it can’t be trusted by investors, a big reason why our FDI is low compared to our ASEAN peers.

Lawyers can contribute to economic growth, as Japanese lawyers at MITI and Lee Kuan Yew proved.

Locally, former Senate president Frank Drilon, a lawyer, is behind the spectacular development of Iloilo City. Leni Robredo, a lawyer, is also making Naga City an example in good governance and development.

In the end, what the engineers in China and the lawyer-bureaucrats in Japan’s MITI had, other than competence, was true love of country.

Sorry to say but the leaders we elect work for their self-interest and do not have a sense of national unity and purpose, of working for the common good. That’s why we are in this sh#thole. And it’s our fault.

Boo Chanco’s email address is [email protected]. Follow him on X @boochanco