Institutions, Social Capital, and Productivity Growth in Philippine Agriculture

This study brought together the issues of institutions, social capital, and productivity in Philippine agriculture. A framework was developed to help understand how institutions and social capital are formed, and how their impact transmits to agricultural productivity. A typology of property rights and a measure of social capital were introduced. Empirical results showed that radical changes in formal institutions cause uncertainty, and subsequently affect real decisions concerning production and technology choice. Social capital encourages individuals to shift to the new technology. However, this choice is informed by the relative profitability of the new technology. In designing programs to improve agricultural productivity, policy makers should examine the institutions affecting property rights, labor arrangements, and other constraints faced by the farmer; and the extent to which other policies affect the perceived risks and social capital.