The Nobel Prize-winning work of Daron Acemoglu, Simon Johnson, and James Robinson in “Why Nations Fail” has profoundly shaped the discourse on why some countries prosper while others languish in poverty. Their central thesis—that the development trajectory of a nation is determined by whether its institutions are inclusive or extractive—holds significant lessons for the Philippines, which, 12 years after the book’s publication, remains mired in familiar patterns of elite dominance and institutional stagnation.
In the aftermath of the Covid-19 pandemic, the Philippine economy has struggled to regain momentum. Despite efforts to revitalize various sectors, structural challenges persist, particularly those related to governance and inequality. Institutions remain largely extractive, reinforcing the power of a small political and economic elite at the expense of broad-based participation. The recent filing of certificates of candidacy for the 2025 midterm elections reveals a continuing pattern of political exclusivity, with the same family dynasties and entrenched interests poised to dominate.
The concentration of power and wealth in the hands of a few, tends to limit opportunities for innovation, productivity, and growth for the broader population. In such systems, policy decisions that promote inclusive development are the exception, rather than the rule.
To break this gridlock, a more enlightened and active citizenry is crucial. One of the key takeaways from Acemoglu’s work is that the transformation from extractive to inclusive institutions does not happen overnight. It requires sustained pressure from below, from citizens who demand accountability, transparency, and fairness. This means empowering the electorate to challenge the dominance of political dynasties and support leaders who advocate for genuine reform.
Since the enactment of the Constitution in 1987, among all the provisions requiring Congress to pass implementing legislation, it is only Section 26, Article II of the Constitution prohibiting political dynasties has not yet been fully acted upon. Only In the Sangguniang Kabataan elections is it required that elected members must not “be related within the second civil degree of consanguinity or affinity to any incumbent elected national official, or to any incumbent elected regional, provincial, city, municipal, or barangay official, in the locality where she/he seeks to be elected.”
Citizen engagement must go beyond the electoral process. Pathways toward more inclusive institutions require structural reforms that tackle the very roots of political and economic inequality. For one, reforming the party system to foster stronger, issue-based political parties could dilute the influence of dynastic clans and allow for a more competitive political environment. Moreover, electoral reforms, such as stricter rules on campaign financing and greater transparency, could level the playing field for new, reform-minded candidates.
Beyond politics, the creation of inclusive economic institutions is vital. Strengthening property rights, ensuring fair competition, and promoting entrepreneurship can help break the monopolistic control of a few. Encouraging more foreign direct investment, especially in sectors where competition is limited, can also foster innovation and create jobs. Additionally, investing in human capital—through education, health, and social protection—will enable more Filipinos to participate meaningfully in the economy.
The key to these reforms lies in collective action. The example of other nations that have successfully transitioned from extractive to inclusive institutions shows that change is possible, but it requires coordination among various sectors of society. Civil society organizations, the private sector, academia, and the media all have a role to play in pushing for reforms.