Regions, institutions and development in a global economy. Divergent regional business systems in the Philippines

Abstract

Despite claims that processes of globalisation have created a ‘borderless world’ there are vast and persistent geographical disparities in economic development. A growing body of literature in the field of development studies has identified the role of institutions as an important factor to explain these diverging trends in development. In recent years, various insightful approaches have been introduced that allow to analyse how the institutional arrangements of a country shape its economic functioning and performance. While these approaches have been designed for analysing national economies in the developed world, they offer exciting opportunities for comparative analyses of regional economies in developing countries as well. This study has applied key elements of the Comparative Business Systems approach and the Varieties of Capitalism approach to investigate to what extent and how regional institutional arrangements shape varied regional economic systems that yield divergent patterns of regional economic development. The comparative case study in the Central Visayas, the Philippines, reveals that the distinct institutional complementarities of the neighbouring island economies of Bohol, Cebu and Negros Oriental leave these regional economies with divergent development outcomes in terms of private sector development and the distribution of wealth.