Public Choice in Action: Logrolling in the Philippine Mining-Tourism Policy

Well it seems that President Aquino will be delivering a compromise over the controversial (I would add nonsensical) mining-tourism squabble.

From the Inquirer,

A new mining policy expected to be issued Friday by President Benigno Aquino hopes to generate more revenues for the government in the face of a high demand for metallic resources while excluding about 78 more areas from mining activities.

Aquino said here on Wednesday that he hoped to come out soon with the much-awaited executive order (EO) spelling out the government’s revised mining policy in the midst of intense debate between industry leaders and environmentalists through the years.

Without going into details, the President said small-scale mining would be further regulated throughout the country under the new EO, which, he added, was undergoing “fine-tuning” in certain provisions for being “superfluous.”…

Asked how the new EO will be able to balance out concerns on environment protection and economic gains, Mr. Aquino said that one of its provisions would designate “roughly” 78 areas to be reserved for tourism “and mining cannot happen there.”

Extractive activities would be disallowed in agricultural and ecotourism areas, according to the source. At present, mining is barred only in areas under protected status.

The President noted that the provision in the draft EO that “mining cannot happen in prime agricultural lands” had also been stated in the law extending the implementation of the Comprehensive Agrarian Reform Program which, in turn, prohibited the conversion of irrigated lands.

There are lots of things to discuss here, particularly side effects of these policies, nevertheless, this represents another wonderful example of the public choice theory in action: a political compromise between two vested interest groups.

Here’s Professor Don Boudreaux and Dwight Lee on “logrolling” (bold emphasis mine)

democratic politics falls short of achieving optimal compromise not only because of immoderate ideological restraints imposed on representatives by voters, but also because it displaces voluntary market arrangements which achieve a far greater and more inclusive amount of compromise. In fact, politics stymies more beneficial compromise than it promotes. Politics should more appropriately be called the art of confining compromise--political compromises are confined to the relatively few parties with ample political power to participate in political bargaining.

The lesson here is that political mandates or edicts or regulations work in the favor of the interests of politically organized and politically connected groups than over the unorganized-invisible groups (yes, this means you, me and the rest of the Juans, Marias, and Pedros).

I call this political inequality.

[disclosure: I have equity exposures in the mining industry, but I favor free markets rather than 'compromises' or logrolling or the use of fiat to secure economic advantage over the rest]