Linkages in development : a Philippine case study

The aim of this study is to provide an analysis of the interactions between the sectors, integrating macro and micro approaches to these interactions with special emphasis on the spatial dimension of development„ Most of the empirical work in the study concerns the Philippines, but the conclusions are of much wider application, being relevant to many other countries in the early and intermediate stages of development. This study - which focuses primarily on the Philippines but also draws on evidence from other Asian countries - brings together the diverse elements in rural linkages, categorizes different types of linkage, and draws on relevant micro-studies of linkages and their effects, so as to improve our understanding of how linkages affect patterns of development, and to identify some policy implications that follow. The paper is organized as follows. Section II presents an analytic categorization of linkages, with a discussion of the nature and direction of causality between linkages and sectoral and aggregate growth. Sections III - VII present some empirical evidence: Section III focuses on the magnitude of non-agricultural income and employment in a number of Asian countries; Section IV presents some evidence on the significance of linkages based on micro-studies outside the Philippines, focusing separately on two different directions of causality - first, on the ways in which agricultural growth affects industry; and secondly, on the ways in which industrial growth affects agricultural development. Section V presents some aggregate evidence for the Philippines on the growth of the agricultural and non-agricultural sectors, development strategies and spatial developments. Section VI reviews and analyzes existing micro evidence on linkages in the Philippines. Here too we categorize evidence into the two directions of causality noted above. Section VII presents same evidence of our own on linkages from industry to agriculture in the JBicol region of the Philippines. Section VIII contains our analytical and policy conclusions on the significance of linkages.